Aug. 29, 2014 SIGN IN | REGISTER

Campaigns Face Costs of Scandal

Bill Clark/CQ Roll Call File Photo
Sen. Dianne Feinstein and other California lawmakers have reported funds missing from their campaign accounts, and dozens of other campaigns and political committees may be victims of embezzlement.

Dozens of California Democratic campaigns and political committees may be facing huge legal bills, fines and other costs as they begin to unpack the alleged embezzlement by the prominent campaign treasurer who handled the finances for about 400 client accounts.

As two different regulators one federal, one state attempt to sort out which campaigns are affected, even those that have emerged seemingly unscathed could be forced to hire forensic accounting specialists, file corrected campaign finance reports, pay fines, grapple with frozen bank accounts and face lawsuits from other victims, experts told Roll Call.

"I think it's going to get really ugly; the legal morass has multiple layers of complexity," said Joseph M. Birkenstock of the law firm Caplin & Drysdale.

Kinde S. Durkee, 58, was arrested on Sept. 2 on suspicion that she used her role at Durkee & Associates to siphon about $677,000 from the election campaign of California Assemblyman Jose Solorio to pay for an array of personal expenses that included clothing, cosmetics, her cable bill and an assisted-living facility for her mother. She was released Sept. 9 on a $200,000 bond and is scheduled to appear in court in mid-October.

Though the criminal complaint focuses on Solorio's campaign, it says Durkee admitted during an interview "that she had been misappropriating her clients' money for years, and that forms she filed with the state were false." It detailed transactions between Solorio's account and those of the campaigns of California Democratic Reps. Loretta Sanchez and Susan Davis. Transfers between any of her 400 client accounts could create a "Bernie Madoff-like" web of legal liability, experts said.

First will be the campaigns that discover funds are missing. The campaigns Durkee managed that reported having the most cash on hand were Sen. Dianne Feinstein (D-Calif.), which should have more than $5 million; Davis, which should have $457,000 in cash reserves; Sanchez, which should have about $379,000; and her sister, Rep. Linda Sánchez (D-Calif.), who should have nearly $277,000, according to their most recent campaign finance reports.

Davis sent a letter to her supporters this week confirming that funds were missing from her re-election campaign.

"We've been robbed!! Upwards of $250,000 in campaign funds have been stolen from us. Our treasurer was arrested and accused of funneling hundreds of thousands of dollars (maybe millions) to herself from our campaign, and the campaigns of many, many others," an email from Susan Davis for Congress said.

A spokeswoman for Rep. Loretta Sanchez confirmed the Congresswoman's account had been nearly wiped out. Feinstein told the Los Angeles Times that her account also had funds missing, though it was not clear to what extent.

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