How Bad is the Durkee Mess?

Former campaign treasurer may have stolen millions of dollars from SoCal Democratic campaigns

by Brian Leubitz

The Kinde Durkee debacle is widening in scope and depth.  If you are on many Democratic email lists, you may have noticed a slew of emails in your inbox either telling you that their bank account was wiped out or asking for money.  Yesterday, we learned that Sen. Feinstein, who is looking at reelection for next year, might have lost millions of dollars:

Sen. Dianne Feinstein (D-Calif.) said her campaign is among those that may have been “wiped out” by a Burbank-based Democratic campaign treasurer who was arrested on federal fraud charges earlier this month.

Kinde Durkee is accused of taking thousands of dollars from the campaigns of several elected officials, including Rep. Loretta Sanchez (D-Garden Grove), Rep. Susan A. Davis (D-San Diego) and Assemblyman Jose Solorio (D-Santa Ana). The Los Angeles County Democratic Party reported that more than $200,000 had been taken from its fund. (LA Times)

First, to clarify, Sen. Feinstein doesn’t know if she was really “wiped out,” but some money was stolen.  Part of the problem is that the bank that Durkee used is being rather unhelpful.  She kept millions of dollars at the bank, and they are concerned for their own liability.  I have heard that they are now attempting to get campaigns to sign a waiver of legal liability to access their accounts.

I’m not giving the bank, or any of the campaigns, any legal advice, but let me explain a legal concept right quick: promises given in exchange for no consideration are called “illusory” and are thus unenforceable.  The campaigns should legally have the right to access their accounts.  The money in those accounts belongs to them.  Giving them the access they are legally empowered to have is not consideration. Heck, even giving them the money to transfer out of the account is not consideration.  It is their money, and they should be able to access it.

That being said, the scope of the mess is growing ever wider.  It appears that Durkee played fast and loose with campaign funds for years.  Much of that time after a San Francisco Chronicle report about a “Californians for Obama” scam that Durkee was a part of.

Of, course, there is one more issue here: California campaigns have given far too much power to external campaign treasurers.  They are given sole access to bank accounts, sole authority to write checks, and typically get very little oversight from the campaigns.  If we are to learn anything from this mess, we should be sure that campaigns are better managed, we have better oversight systems, and campaigns don’t allow individuals too much access.  Campaign treasurers are 99.99 honest, but at the same time we need to ensure that campaigns see actual bank statements once in a while, know how much money is in their account, and can handle their business in case of emergency.

30 thoughts on “How Bad is the Durkee Mess?”

  1. to dem pols who used durkee’s services? especially combined with the new districts, it could open up the field  significantly, if the incumbant money advantage is dented. i would love to see a challenger to feinstein.

  2. My bookkeeper was here yesterday and I was wondering the same things. Before she cuts checks, she send me a list of everything she’ll run so I can check it. I sign everything before it goes out. She uploads a copy of my QuickBooks file to my computer twice a month in case I want to check it. Both of us can see bank balances online, but only I can make withdrawals. All of which made me wonder why none of these campaigns seemed to have any checks and balances. Nobody who was checking her work or looking at the bank balances. Nobody who reads the Chronicle.

    I know my company finances are far smaller than a statewide campaign. But they’re important to me. So I watch them. I know campaign finance laws are more confusing than those for my small business. That’s why campaigns hire outside experts. But the principle remains the same. You watch your own money because it means more to you than to anybody else.

    And the last question, why nobody paid attention to several articles in the SF Chron that go back at least a few years, goes back to something I posted a while back. When a political consultant is in, they’re in. People don’t look, don’t ask questions, don’t demand results. If all the important people use you, that’s good enough. It’s a closed circle that is great for entrenched consultants. But I question the value for campaigns. Even more now.

    Why nobody prosecuted Durkee after the Chron expose is another question altogether. Maybe former AG Brown would like to answer that one.

  3. I read a story in a London paper this morning that said Durkee has used the money she stole to fund her “lavish lifestyle.” This is not a shock, though it does disappoint any campaigns that hoped to get the money back.

    More surprising was the claim that Durkee moved money between accounts to delay discovery. It seems the “unhelpful” bank would have noticed this as there’s absolutely no reason why those accounts should have mixed. So they may have some explanations due as well. Which might explain why they’re being so unhelpful.

    Most surprising is that, not only did the SF Chron report on this 4 years ago. Not only did the Obama campaign expose her false fundraising 3 years ago. But The Independent reports she’s received fines over a period of 10 years for violations of campaign finance reporting regulations. After all this, it beggars the imagination that nobody noticed there was something wrong. What she did was criminal. The fact that nobody did anything to stop her after all that is criminal negligence. A lot more people than Kindee Durkee should be in trouble.

  4. While I have heard a whole lot of asking for money, I have heard very few apologies for the mess.  Why not start there.

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