Treasurer Allegedly Embezzled From Calif. Democrats

California is a solidly Democratic state, but the campaign coffers of many Democratic officials are hovering near empty. The reason: They were allegedly ripped off by a campaign treasurer who handled hundreds of accounts. One congresswoman called her the "Bernie Madoff of campaign treasurers."

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California is a solidly Democratic state, but the campaign coffers of many Democratic officials are hovering near empty. The reason, as NPR's Ina Jaffe reports, they were allegedly ripped off by a campaign treasurer who handled hundreds of accounts.

INA JAFFE: Congresswoman Loretta Sanchez, who represents part of Orange County south of L.A., used to have about $400,000 in her campaign account.

NORRIS: So pretty much, we went down to close to zero, and now, we are revamping.

JAFFE: Sanchez's campaign treasurer for the past 17 years was Kinde Durkee. She's always seemed to be doing a good job, says Sanchez, and the position of campaign treasurer is a technical one. There are different rules for city, state and federal campaigns. You need a specialist.

SANCHEZ: To get all this reporting done and to account for all contributions and that you have all the names of everybody and the contact information, you need an accounting firm to do that. Otherwise, you can pay high fines, and you can get into a lot of problems.

JAFFE: Sanchez isn't named as a victim in the federal complaint. Right now, that unfortunate role belongs to State Assembly Member Jose Solorio, who's out more than $700,000. Prosecutors also say that Durkee moved money in and out of her clients' accounts to cover for the money she allegedly looted. Bill Carrick, the longtime campaign manager for U.S. Senator Dianne Feinstein, says that's one of the reasons it's so hard to figure out exactly how much money is missing from the senator's $5.2 million war chest.

BILL CARRICK: The idea that candidate A had his money taken out, and then in order to cover that, candidate B's money was transferred into candidate A's account. Now, you take that across 400 accounts and you see what a horribly complicated mess this will be to unravel.

JAFFE: According to the FBI, Durkee used the money that she allegedly took from her clients to make payroll for her accounting firm, to pay her mortgage, to buy cosmetics and to pay for her mother's assisted-living facility among many other things. And she acknowledged to the FBI that she'd been misappropriating money for years. Congresswoman Susan Davis sent a letter to her supporters calling Durkee the Bernie Madoff of campaign finance treasurers. And it's going to be hard for candidates to replace the money, says Eric Bowman, chairman of the Los Angeles County Democratic Party.

ERIC BAUMAN: If you're running for an office that has contribution limits, it doesn't matter that your contribution got stolen. Once you've made the contribution that's been recorded, it means having to find new and different sources of revenue.

JAFFE: California regulators have ordered Kinde Durkee's firm to stop providing accounting services after discovering that the firm isn't licensed and that none of the accountants are certified. Durkee is currently free on $200,000 bond. A spokeswoman for the U.S. Attorney's Office in Sacramento said more charges against Durkee are likely. Ina Jaffe, NPR News.

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