Ex-Democratic Campaign Treasurer Gets 97 Month Sentence

Kinde Durkee, a former campaign treasurer to California Democrats including U.S. Senator Dianne Feinstein, was sentenced to eight years and one month for embezzling millions of dollars from political committees and using some of the money to pay her bills.

Durkee, 59, who pleaded guilty in March to five counts of mail fraud, was also ordered today by U.S. District Judge Kimberly Mueller in Sacramento, California, to pay restitution of $10.5 million.

“I don’t think the violation of public trust and the offense can be understated here,” Mueller told Durkee.

Durkee ran Durkee & Associates, which provided accounting and campaign reporting services to political campaigns and nonprofits. For 10 years starting in 2000, Durkee took money from some clients’ accounts and deposited it into accounts of other clients to cover unauthorized withdrawals, prosecutors said. There are at least 80 victims of the embezzlement, according to court filings.

Durkee took $156,000 in 2010 from Feinstein’s campaign committee bank account and used it to cover mortgage payments on her home in Long Beach, California, and pay American Express and Sprint bills, prosecutors said. Other politicians who hired her lost hundreds of thousands of dollars. She had signature authority for about 400 bank accounts over the years, relying on her customers’ trust to continue the scheme, prosecutors said.

Trust, Betrayal

In court, Durkee apologized “to those who trusted me and I betrayed.”

“I take full and complete responsibility for the harm that I have caused,” she said.

Durkee was ordered to report to prison by Jan. 2. Mueller recommended to the U.S. Bureau of Prisons that Durkee serve her sentence in a facility that can accommodate her mental health counseling needs.

The government sought an eight-year prison term for Durkee. Her lawyers said that a “great deal” of the money she took kept her business afloat and paid her employees until “it spiraled out of control” and she lost track of the shortfall. While her admission of guilt and cooperation could support a more lenient sentence, eight years is “just and appropriate,” Daniel Nixon, Durkee’s attorney, said in a court filing.

McGovern Campaign

A native of Oakland, California, Durkee volunteered as bookkeeper for George McGovern’s 1972 presidential campaign while in college and from there began working for a campaign finance company, eventually taking it over. The company’s financial condition started going downhill as clients didn’t pay their bills or employees made mistakes, Nixon said in court filings.

Durkee started borrowing from one account to cover shortfalls in others, and also started using client funds to cover mortgage payments, food, credit card bills and payments to her parents’ assisted living care, according to the filings.

Client losses total more than $7 million, which Durkee is unlikely to be able to repay, her lawyer said.

“The scheme perpetrated by Kinde Durkee was broad in scope and had a profound impact,” U.S. Attorney Benjamin Wagner in Sacramento said in an e-mailed statement. “She will now spend eight years in prison for exploiting her position of trust and using complex maneuvers to fool her clients into thinking all was well.”

The case is U.S. v. Durkee, 12-00123, U.S. District Court, Eastern District of California (Sacramento).

To contact the reporter on this story: Karen Gullo in San Francisco at kgullo@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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