Campaign attorneys and representatives from various political organizations today urged the state campaign watchdog agency to take immediate action to aid candidates and committees affected by alleged fraud committed by prominent Democratic campaign treasurer Kinde Durkee.
"People have been scrambling over the last three weeks to try and get their paperwork changed, change their treasurer obviously, and get new bank accounts open so they can start receiving some money to start to rebuild their campaign accounts," attorney Stephen Kafuman said at a Fair Political Practices Commission meeting to collect public comment on the impact of the alleged fraud.
Attendees asked FPPC officials to consider waiving campaign contribution limits in certain cases and broadening the requirements for legal defense funds to help candidates and committees recoup funds they say were stolen by Durkee, who was arrested earlier this month on federal mail fraud charges.
They also also asked the panel to extend disclosure filing deadlines for affected accounts and offer immunity from violations caused by reports falsified by Durkee.
"Contributions weren't contributions. Expenditures weren't expenditures. It was all just bank transactions conducted by Kinde Durkee," said attorney Karen Getman, who estimated $700,000 is missing from the the bank account of one client, Democratic Assemblyman Jose Solorio.
Getman, a former chairwoman of the commission, said Solorio has been "double victimized," not only by Durkee, but by the bank where many of the accounts Durkee managed were held. She said the account has been frozen and First California Bank has refused to release full bank statements or restore funds lost, instead asking a judge to sort out the money Durkee allegedly transferred between accounts without permission. Seeking restitution through that process will cost politicians such as Solorio even more, she said, arguing to expand the scope of legal defense funds.
"Every penny is frozen. Every single penny that we could use for defense, for filing fees, everything is frozen at this point," she said.
The requested changes were questioned by one good-government group.
"Ultimately, candidates are responsible for the funds they raise and the maintenance of those funds. (Lost) funds, regardless of fault, are not a convincing reason to allow for increased corruption by moneyed interest," Phillip Ung, policy advocate for California Common Cause, wrote in a letter to the commission.
FPPC Chair Ann Ravel said the agency will use input gathered to craft a "thoughtful and narrowly tailored response" to what she described as the "most extensive campaign treasurer fraud in the history of California."
Ravel said she expects the commission and Legislature to address in coming months the "underlying problem of treasurer malfeasance to prevent it from happening again," including posting campaign law violations committed by treasurers on the agency's website and instituting new campaign treasurer training requirements.
"Mandating training would not only assist with compliance of the Political Reform Act, but it would also serve as a tool to eliminate fraud by making treasurers aware of our recognition of fraudulent practices and the tools that we have available... if fraud is suspected," she said, noting that an FPPC audit sparked a broader investigation into Durkee's business practices.
The discussion is expected to continue at the commission's October meeting, as commissioners consider whether to craft emergency regulations or seek action by the Legislature.
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