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Theft Hits Races in California

Bill Clark/CQ Roll Call File Photo
Sen. Dianne Feinstein was among the California Democrats whose campaigns were the target of alleged embezzlement.

More than $5.2 million is missing from the campaign coffers of California Democrats on the Hill, and hundreds of thousands more are unavailable for withdrawal in the wake of an alleged embezzlement scandal that has rocked the Democratic Party in the Golden State and all but wiped out hundreds of bank accounts associated with state, House and Senate campaigns.

Those hardest-hit by what is now the largest campaign-embezzlement scandal to date are Sen. Dianne Feinstein (D-Calif.), whose re-election campaign reported a cash-on-hand adjustment of more than $4.5 million due to misappropriated funds; Rep. Susan Davis (D-Calif.), whose campaign adjusted its cash-on-hand figure by $160,015 to account for allegedly embezzled funds; and Reps. Linda Sánchez (D-Calif.) and her sister Loretta Sanchez (D-Calif.), whose campaigns reported missing about $322,123 and $125,000, respectively.

The losses — which typically are appearing as adjustments to cash-on-hand figures during the most recent batch of campaign finance filings submitted to the Federal Election Commission — are likely to grow as campaigns continue to identify suspicious transactions that allegedly allowed a trusted bookkeeper to misappropriate millions of dollars from nearly 400 client accounts.

Kinde S. Durkee, 58, was arrested in early September on suspicion that she used her bookkeeping firm 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. Since that time, the scope of the probe into the funds misused by the Burbank, Calif.-based firm has widened, implicating hundreds of accounts maintained by lawmakers’ re-election campaigns, nonprofits and county-based political party organizations.

Accounts maintained by Feinstein’s re-election committee were wiped clean in the scam. Although the Feinstein for Senate campaign reported having roughly $5 million in the bank at the end of June, it discovered that more than $4.5 million was missing after Durkee’s arrest. An additional unauthorized disbursement thought to be made by Durkee on Aug. 31 brings the campaign’s total exposure to $4,658,413.

Longtime Feinstein campaign spokesman Bill Carrick said the $662,100 that remained in the campaign’s war chest was unavailable for withdrawal because First California Bank, where Durkee maintained 398 accounts, has frozen the assets that remain in Durkee-associated accounts and asked a Los Angeles judge to figure out whom the remaining funds belong to. The bank has also refused to turn over banking records unless clients sign a waiver that absolves it of responsibility, which the Feinstein for Senate campaign has declined to do, Carrick said.

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