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.

cross-posted from Daily Kos.

I started to write that pretty much the worst thing that I could imagine in Orange County Democratic politics, short of someone’s death, has happened today.  That isn’t quite true, though.  What has been reported today is worse than anything I have imagined about our party — and I have imagined plenty.

One’s first tendency may be to hide it.  I think that one instead faces it.

I hate to give the conservative-libertarian Orange County Register any hits, but they are the ones with the story, so click away:

A prominent Democratic campaign treasurer who works for federal, state and O.C. lawmakers including U.S. Sen. Dianne Feinstein. Rep. Loretta Sanchez and state Assemblymen Lou Correa and Jose Solorio has been arrested by the FBI on suspicion of mail fraud, The Orange County Register has learned.

U.S. Attorney’s Office spokesman Thom Mrozek confirmed Saturday afternoon that Kinde Durkee of Burbank-based Durkee and Associates, was arrested by the FBI on a criminal complaint filed by the U.S. Attorney’s Office in Sacramento. Special Agent Steve Dupre of the bureau’s Sacramento office said she was arrested in connection with her position as a campaign treasurer.

“Innocent until proven guilty,” absolutely; I make no conclusions from this arrest.  But this story is huge.  Kinde Durkee was the one person always represented to me, since entering Orange County politics a little less than five years ago, as trustworthy and incorruptible.  We will be reeling from this arrest alone, let alone the details, for a long time.

Federal Election Commission records show that Durkee is the treasurer for Feinstein and Sanchez, who could not be reached Saturday. California Secretary of State records show she currently serves as the treasurer for at least 115 state-level committees. Those committees include campaign accounts for Solorio, D-Santa Ana; Assemblymen Gilbert Cedillo, D-Los Angeles, and Roger Hernandez, D-Baldwin Park; State Sens. Ted Lieu, D-Torrance and Curren Price, D-Los Angeles; Los Angeles City Councilman Paul Krekorian; and former Orange County lawmaker Tom Umberg.

Durkee also oversaw the political-action committees of the Democratic Party of Orange County and the Democratic Foundation of Orange County, among others

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Another day, I’ll talk about what one expects from a committee Treasurer — who is not the person you elect or appoint as Treasurer for your campaign or PAC but the professional with whom your Treasurer does business.

Today, the earthquake is still going on.  We crouch, with the ground shaking, hoping that we survive with the least possible damage.  “Terrible” barely begins to describe it.  As a Democrat active in, among other things, the DPOC, I feel like I have been kicked in the teeth.  I can only imagine how the officeholders listed above feel.