Feinstein says her campaign fund may have been 'wiped out'

September 13, 2011
Feinstein says her campaign fund may have been 'wiped out'
By Molly Hennessy-Fiske | McClatchy-Tribune News Service

LOS ANGELES — Sen. Dianne Feinstein said her campaign is among those that may have been "wiped out" by a Burbank-based Democratic campaign treasurer 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-Calif.; Rep. Susan Davis, D-Calif., and state Assemblyman Jose Solorio, D-Santa Ana. The Los Angeles County Democratic Party reported that more than $200,000 had been taken from its fund.

Durkee, head of Durkee & Associates, was arrested by the FBI on Sept. 2. A federal affidavit said she admitted misappropriating client funds for years and filing false federal campaign forms.

Durkee, who has not entered a plea on federal mail fraud charges, was released Friday on $200,000 bond.

Feinstein, D-Calif., said Monday that Durkee had struck her campaign in addition to Sanchez's. According to her staff, Feinstein said that she "was wiped out, too, but we don't know how much."

Durkee managed Feinstein's campaign finances in 1992, 1994, 2000 and 2006, and during her failed 1990 gubernatorial campaign.

Feinstein and other lawmakers have said Durkee's alleged actions came as a surprise, but investigators had been reviewing her work for years. When the FBI launched its probe in January, the Los Angeles County district attorney's office and the state Fair Political Practices Commission were already investigating Durkee. During the past decade, she had amassed $185,860 in fines from the Fair Political Practices Commission in eight separate cases.

But a Feinstein campaign spokesman said Monday that Durkee's work never drew suspicion. Durkee was the protege of another longtime Democratic campaign treasurer, Jules Glazer. Glazer - accountant to Gov. Gray Davis and to Gov. Jerry Brown's early campaigns, among other prominent politicians - had managed Feinstein's campaign accounts with Durkee. When he retired, Durkee took over, said Bill Carrick, Feinstein's chief campaign consultant.

"In those past campaigns, we never had anything we thought was inappropriate," said Carrick, who is based in Los Angeles.

Feinstein's campaign has been unable to access the accounts Durkee controlled, Carrick said, including about $5.2 million Feinstein had raised to date.

It was unclear Monday how much money might be missing, he said.

"We'll have to examine all that to make sure going forward we have safeguards in place," Carrick said. "Right now we're just trying to make sure where our money is."

On Monday, Davis sent an email to contributors calling Durkee "the Bernie Madoff of campaign treasurers."

According to the email, Durkee allegedly stole more than $250,000 from the Davis campaign. But the congresswoman reassured contributors that her campaign had a reserve account that Durkee could not access.

"This leaves us with funds to fight back and renew our campaign," she said in the email.

Durkee is next scheduled to appear in U.S. District Court in Sacramento for a preliminary hearing Oct 19.

Molly Hennessy-Fiske writes for the Los Angeles Times.

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