'Bernie Madoff of campaign finance' charged with stealing from Democrats


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The Independent US

She is being described as "the Bernie Madoff of campaign finance". No one yet knows how long her apparent scam had been running, or how much money may be missing. But some alleged victims say they have been "nearly wiped out".

Kinde Durkee, a political consultant who organised financial affairs for dozens of California's top Democrats, has been arrested and charged with stealing millions of dollars from their campaign war chests, in the run-up to the 2012 election season.

The money, including large donations from leading figures in the Hollywood community, is believed to have funded Ms Durkee's comfortable lifestyle. Some was supposedly used to pay off credit card bills; other tranches of cash covered mortgage payments and nursing home fees for her elderly mother.

Fresh victims are emerging daily. They include Dianne Feinstein, a prominent US senator whose office say they "don't know right now" what has become of $5.2m (£3.3m), and Susan A Davis, a San Diego congresswoman who wrote a letter to supporters yesterday saying "we have been robbed!"

Ms Davis believes that at least $250,000 is missing from her campaign's bank accounts. "As this scandal emerges, she [Durkee] may well become known as the Bernie Madoff of campaign finance treasurers," Ms Davis wrote in her letter.

Prosecutors say Ms Durkee, who boasted impeccable connections, was considered the "go-to" accountant for California Democrats because of her apparent knowledge of federal and state finance laws. She would often work for vastly reduced fees for politicians with whom she was friendly.

Her company, which had been established for more than 15 years, served a swathe of California's Democratic establishment. At the time of her arrest earlier this month, she is believed to have boasted of access to more than 400 bank accounts holding tens of millions of dollars in campaign funds.

In a criminal complaint filed in Sacramento this week, prosecutors said that Ms Durkee, who is 58, "admitted that she had been misappropriating clients' money for years." She apparently covered her tracks by repeatedly transferring money between different accounts to give individual clients the impression that their finances remained sound.

In fact, they allege, she was siphoning off cash for her own use. Most was used to cover big-ticket expenses such as her mortgage and care-home fees. Smaller funds were used to settle bills at Amazon, and the ice-cream store Baskin & Robbins, where the rotund Ms Durkee appears to be a regular client.

Auditors say it could take years of forensic accounting to discover how much has been lost, and who is entitled to cash that remains. Many Democrats, who are in the state's majority party, are scrambling to fill empty war chests. It remains to be seen how the affair impacts on next year's elections.

The FBI raided Ms Durkee's offices in Burbank, just north of Los Angeles, after being alerted to irregularities in the bank accounts of Jose Solorio, a state assemblyman who lost around $600,000. They subsequently noticed that she had been fined $190,000 for 11 minor breaches of financial reporting laws in the past decade.

Other victims include the Los Angeles County Democratic Party, which is missing around $200,000. Major donors whose money is presumed lost in the scam range from film studios, Sony, Universal, Warner Brothers and Disney, to Rupert Murdoch's News Corporation. Robert Iger, the head of Disney, and Ron Meyer, of Universal, were also named as the sources of private donations which may have been embezzled, according to the Reuters news agency.

Ms Feinstein's celebrity supporters include Hollywood liberals Tom Hanks, Jane Fonda and George Clooney.

Ms Durkee has been freed on $200,000 bail, and is next due in court in October. She has not commented on the allegations, and there was no reply at the offices of her company, when The Independent called there yesterday.

Price of political success

The scandal around Kinde Durkee in California over campaign finance has highlighted the huge sums raised and spent on political battles in the United States. House and Senate campaigns raised nearly $600m in 2009, according to the Federal Election Commission.

But that figure was dwarfed by Barack Obama alone who raised $760m to win the White House vote in 2008. He is expected to at least match that total this time round.

The US elections in 2012 are likely to be the most expensive ever with some $6bn spent as Republicans and Democrats vie for the presidency as well as control of Congress and state governments.