My friend, whom I have no problem with has asked ...?

My friend, whom I have no problem with has asked if my 2yr. old daughter would be in her wedding. My only regret is that her family has spread rumors about me being a drug user, and I don't want my children to ociate with her family if they are going to talk rudely about me. I don't think it will be fair to my friend to not let my daughter be in her wedding. How would you address this delema?