Politics

Calif. treasurer accused of campaign fund theft

LOS ANGELES (AP) — A longtime Democratic campaign accountant whose clients included U.S. Sen. Dianne Feinstein siphoned off nearly $700,000 from a California candidate to pay her credit cards, a mortgage and business bills, federal prosecutors said Tuesday.

Kinde Durkee, who heads Durkee & Associates in Burbank, Calif., was arrested Friday on suspicion of mail fraud by the FBI. Durkee has served as a bookkeeper for scores of candidates — her company website says five presidential campaigns. Democrats were scouring records to determine if they might have been victimized.

“I have five employees I need to make payroll for every two weeks — you bet I’m nervous,” said Los Angeles County Democratic Chairman Eric Bauman, who relied on Durkee for years to handle the committee’s books.

A federal complaint released Tuesday outlines an elaborate shell game in which Durkee furtively shifted money out of state Assemblyman Jose Solorio’s 2010 campaign to pay for an array of debts, from a Disneyland restaurant to shopping at Costco to her mother’s care at an assisted-living facility.

Durkee’s scheme used Solorio and his campaign to “obtain money from them by means of materially false and fraudulent pretenses,” it said.

She made a brief appearance in court Tuesday, handcuffed and with shackles around her waist. Durkee said a single word, “Yes,” when asked by Magistrate Judge Jay C. Gandhi if she understood the charges against her. She is scheduled to return to court Friday.

Durkee remains in custody. Her lawyer, Daniel V. Nixon, declined comment.

The complaint said investigators found “substantial sums” have routinely been moved out of campaign committees under her control, then placed into her company accounts or channeled to other campaigns, apparently when suspicions were raised about missing money.

Lauren Horwood, a spokeswoman for the U.S. attorney’s office in Sacramento, Calif., said the investigation is expected to result in additional charges. Durkee had authority over more than 400 bank accounts, including political campaigns.

The complaint said she acknowledged misusing clients’ money for years and filing bogus records, and that Durkee told investigators that she was dealing with “personal and business tax problems.” She wrote a $50,000 check to the federal government — an apparent tax payment — after money was shifted out of Solorio’s campaign account, the complaint said.

Other bills apparently covered by funds from Solorio’s campaign included payments to online retailer Amazon.com, air travel and cosmetics.

In October, Durkee filed a report with state regulators affirming Solorio’s campaign had $729,135 in the bank, when bank records revealed the balance was $33,175. The report, signed by Durkee, did not disclose two checks written off the account, for $300,000 and $377,181.

Investigators found funds from those checks were used for other purposes, including paying employees at her company and shifting money to at least three congressional campaigns.

Bill Carrick, a longtime Feinstein media consultant, said the arrest came as a surprise. Durkee “had a good reputation for somebody who could do the basic filing and accounting functions for a campaign,” he said.

Durkee’s Burbank office did not immediately respond to a phone message left Tuesday.

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Associated Press Special Correspondent Linda Deutsch contributed to this report.