Democrats accused

Feinstein: 'Wiped out' by scandal By: John Bresnahan and Jonathan Allen September 12, 2011 06:50 PM EDT

Sen. Dianne Feinstein (D-Calif.) said she was “wiped out” by Kinde Durkee, a well-connected California Democratic political operative who served as treasurer for hundreds of state, local and federal campaign committees. Durkee was arrested by the FBI on Sept. 2 on allegations of fraud surrounding the diversion of more than $670,000 from the reelection committee for a California state assemblyman, and a growing list of California Democrats, including Feinstein and Reps. Susan Davis and Loretta Sanchez, now appear to victims as well. “I was wiped out too, we don’t know how much,” said Feinstein, indicating the losses in campaign funds could run into hundreds of thousands, or even millions, of dollars. Feinstein, who is up for reelection next year, reported just over $5 million in the bank as of June 30, according to disclosure reports filed with the Federal Election Commission. “She did my ‘92 campaign, my ‘94 campaign, my 2000 [campaign], my 2006 [campaign] … my gubernatorial campaign,” Feinstein told POLITICO on Monday, describing her long relationship with Durkee. “I trusted her implicitly.” Feinstein said she and her campaign staff have been unable to access all their bank records at this point because Durkee alone controlled access to the account, which has made it difficult for them to assess how much money is gone. “It’s very painful,” Feinstein added. Davis is missing more than $250,000 from her reelection committee. Loretta Sanchez has already declared her $379,000 campaign war chest was “nearly wiped out” by Kindee. The Los Angeles County Democratic Party reported that it lost at least $200,000, while California Assemblyman Jose Solorio (D) may be out as much as $677,000. And dozens of other campaign committees have yet to declare whether they suffered losses as well. Durkee has not been formally accused of any wrondoing in connection with missing funds from the campaign accounts of Feinstein, Davis or Sanchez at this time, but Justice Department officials allege that Durkee moved money from one of Solorio’s accounts into an account she controlled and then wrote a check for $125,000 to Sanchez’s campaign shortly before last November’s congressional elections. In a letter sent by Davis on Sunday - first reported by the San Diego Union Tribune - the six-term House member told supporters that “we have been robbed!” “Upwards of $250,000 in campaign funds have been stolen from us. Our treasurer was arrested and is accused of funneling hundreds of thousands of dollars (maybe millions) to herself from our campaign, and the campaigns of many, many others,” Davis stated. “The records we vigilantly kept and reported to the Federal Election Commission accurately reflect contributions that we received and monies we knowingly spent. However, the reports [Durkee] submitted to us about our account balances were false. As this scandal emerges, she may well become known as the Bernie Madoff of campaign finance treasurers.” Durkee was one of the most widely sought after treasurers in California Democratic politics with dozens of state, local and federal clients. An FBI special agent told a federal judge in California that Durkee had access to “more than 400 bank accounts” at the time of her arrest, and the scale of alleged diversions of funds is only now starting to become clear. Durkee reportedly used the money she is accused of diverted from Solorio to cover business and personal expenses, including payments for her mother’s nursing home. Durkee has been released on a $200,000 bond on Friday under strict conditions that she not leave the region or involve herself in the affairs of her company, Durkee & Associates, or its clients.