Candidate John Peschong’s firm received money from Phillips 66

John Peschong, left, talking here with supporter Bronco Rudnick at Peschong’s primary election night party in Paso Robles, says he will recuse himself from voting on the Phillips 66 oil-by-rail project in Nipomo because of work his firm has done for the oil company.
John Peschong, left, talking here with supporter Bronco Rudnick at Peschong’s primary election night party in Paso Robles, says he will recuse himself from voting on the Phillips 66 oil-by-rail project in Nipomo because of work his firm has done for the oil company. jjohnston@thetribunenews.com

Before John Peschong was a candidate for San Luis Obispo County supervisor representing the Paso Robles area, his political consulting and public affairs firm received $262,313 from Phillips 66, an oil company with a controversial oil-by-rail plan that’s expected to be appealed to the Board of Supervisors.

Environmental advocates have recently charged that the money is proof that Peschong would not be able to be impartial on the project. But Peschong — who has said he supports the Phillips 66 proposal — said Monday that if elected, he would not vote on the project.

“I would recuse myself because that’s the right thing to do,” he said in a phone interview.

Peschong, who founded Meridian Pacific Inc. in 2003 with two other partners, is running to replace outgoing District 1 Supervisor Frank Mecham, who has often provided a crucial swing vote between the more liberal and conservative supervisors.

Peschong faces Paso Robles Mayor Steve Martin in the Nov. 8 election. Both have said they would support Phillips 66’s proposal to modify its Nipomo Mesa refinery to receive crude oil by rail if safety requirements are met, but Martin has expressed concerns about environmental issues and requested the proposal come back to the Paso Robles City Council for an update and review at an October meeting.

“I think it’s worth looking into and taking a second look at,” Martin said Monday. “We have had more incidents on the rails than we had a year ago.”

The Phillips 66 plan is set to return to the San Luis Obispo County Planning Commission on Oct. 5 for its eighth hearing. Last Thursday, commissioners started to debate various conditions to approve the project but did not reach a decision.

Their decision is likely to be appealed to the Board of Supervisors, which concerns some environmental advocates who worry that should the commission approve the project, the decision would stand if the supervisors reach a 2-2 deadlock.

But assistant county counsel Tim McNulty said that’s not the case. Even if the Planning Commission approves the project and it is appealed, he said, the supervisors would still need three votes to certify the environmental documents and move the project forward.

Two speakers last Thursday either alluded to Peschong or mentioned him by name.

“I want to stress how important your decision is today,” Valerie Love of the Center for Biological Diversity told the commission, adding that one of the supervisor candidates might have to recuse himself. “Please make the right decision now and deny the project.”

Peschong said he made a decision on his own not to vote on the project.

He said he’s been forthright about the fact that his firm has done work for energy and oil-related entities, and he has listed Phillips 66 as one of Meridian Pacific’s customers on his Form 700, a statement of economic interests he filed as a supervisor candidate in March.

Peschong said Meridian Pacific had a contract for consulting services with Phillips 66 in 2015, which ended in the earlier part of 2016. The firm has worked for the oil company in the state and San Luis Obispo County, including the rail spur project. Peschong did not know how much his firm had received from Phillips 66 for work done in 2016.

Phillips 66 listed the payment to Meridian Pacific on a document called “2015 Other Political Giving.” It was the largest such contribution given to a company or an organization on the list by more than $160,000.

Phillips 66 officials did not explain why the payment for consulting services was listed in connection with politically related requests. In an email, company spokesman Dennis Nuss said that Phillips 66 contracted with Meridian Pacific until Aug. 1.

“Meridian provided public affairs consulting initially through partner John Peschong, and beginning January 2016, with other members of the firm,” Nuss wrote.

To date, Peschong has not received any campaign contributions from Phillips 66, a review of his campaign finance statements show. He did receive $180 from Jim Anderson, maintenance manager at the Nipomo Mesa refinery, earlier this year.

However, Peschong’s income from Phillips 66 might not prevent him from voting on the project, as long as that money was not received in the previous 12 months.

“Income from 12 months prior is not relevant,” said Jay Wierenga, communications director of the Fair Political Practices Commission, who was speaking in general about the Political Reform Act.

In addition, California courts have not been consistent in ruling on whether a candidate for public office should recuse himself if he or she has taken a position on a project or issue while campaigning, McNulty said.

“When we bring on a new supervisor, we advise them about this part of the case law and advise them that one of their roles is to sit as a quasi-judicial decider of fact and that there’s a need to be fair and impartial in doing that,” McNulty said.

Still, opponents of the rail project wonder if Peschong would hold to his word.

“The choice of a public official to recuse himself from voting on a project is largely a voluntary matter, meaning that if the theoretical moment arrives when the Phillips 66 project comes before the board and Mr. Peschong is on it, he would be free to change his mind and decide there is no appearance of a conflict of interest,” Andrew Christie, director of the Santa Lucia Chapter of the Sierra Club, wrote in an email.

“A narrow reading of the statutes on conflict of interest and recusal could support the claim that if the money paid to his firm was not received from Phillips in anticipation of his running for office, there’s no conflict,” he added.

Peschong said that if he’s elected in November, he would retain his ownership in Meridian Pacific but not do any work in San Luis Obispo County.

Cynthia Lambert: 805-781-7929, @ClambertSLO