A Burbank-based political treasurer who has worked for some of the state's most prominent Democrats was charged Tuesday with federal mail fraud over allegations she misused nearly $700,000 from a client's account to cover her own business and personal expenses.
Kinde Durkee has been accused of using the funds from Assemblyman Jose Solorio's 2010 campaign account to pay expenses that included mortgage payments, her mother's assisted-living care, American Express charges at Baskin Robbins, Disneyland and Ulta cosmetics, and her firm's own payroll.
Durkee, in business since 1972, has worked on campaigns for Sen. Dianne Feinstein, state Sen. Alex Padilla, City Councilman Dennis Zine and dozens of Los Angeles-area politicians.
Stunned by the news, some local Democrats say they are now going back and reviewing the work she did for them.
"We have been in a state of shock since this came out and are using all due diligence to look at our accounts," said Eric Bauman, chairman of the Los Angeles County Democratic Party.
"We had a problem last year where the FPPC fined us $18,000 because of a mistake she made," Bauman added. "But she stepped up and took responsibility and paid it."
Durkee was arrested over the weekend, capping an investigation that started with the state Fair Political Practices Commission and other agencies around the state looking into Durkee's business dealings.
The FBI office in Sacramento conducted the inquiry, looking into the misuse of checks for $300,000 and $377,000 from the election account of Solorio, D-Anaheim.
Durkee admitted to FBI agents that she "had been misappropriating money for years and that forms she filed with the state were false," Special Agent Reginald Coleman said in an affidavit filed with the court.
Coleman said she also told FBI agents that she had a number of personal and business tax problems, and that she used the money for personal and business expenses including food, clothing, entertainment and housing.
The office of Durkee & Associates did not return phone calls seeking comment Tuesday. Durkee appeared briefly in court Tuesday and a bond hearing was set for Friday.
Solorio issued a statement to his supporters about the incident over the weekend headlined: "I've been robbed. The FBI has arrested my treasurer."
"I wanted to reach out to you directly with the facts regarding the recent arrest of Kinde Durkee, the person I trusted as my campaign treasurer," Solorio wrote. "I hired her because she was regarded as a highly respected professional, and for decades, the treasurer for the campaigns of many prominent elected officials in the state.
"I received a call Friday afternoon by the FBI to be alerted that I and others are victims of a crime. In the coming days, you may read more about this developing story, but please know that with the help of my family, friends and supporters, we will eventually be able to recoup our losses and put this unfortunate incident behind us."
Investigations into Durkee date back at least three years when the Los Angeles District Attorney's Office announced an inquiry - later dropped - into whether a political committee created by Durkee had made illegal contributions involving state Sen. Alex Padilla, D-Van Nuys, and Councilman Tony Cardenas.
Also, last year, an investigation in San Diego looked at Durkee's role as treasurer of a slate-mailer organization called Voters Education Group in Encinitas.
Durkee also has been fined $104,000 by the FPPC for mistakes in the reports for former state Controller Steve Westly's gubernatorial campaign.
Councilman Dennis Zine said he used Durkee in all of his campaigns up to his current race for city controller on the 2013 ballot.
"I only had one problem with her over $1,000 that shouldn't have been spent," Zine said. "I called her and she immediately fixed it."
And while there were no other indications of problems, Zine said he plans to review all his other accounts with her.
Councilman Richard Alarcón also had used Durkee as his treasurer for some races, but recently switched.
"I never had a problem, but we will probably go back to check other accounts," Alarcón said. "Between the FPPC and the city Ethics Commission, we are watched pretty closely."
Attorney Stephen Coleman, who also handles political matters, said he had a number of clients who used Durkee and he would be working to determine if there were financial problems.
In the affidavit, Coleman said one of the checks being reviewed was from Oct. 1, 2010, when a cashiers check for $300,000 was deposited into the Durkee business account. Coleman said it appeared to have been from a money market account for the Solorio campaign.
On Oct. 10, 2010, the affidavit said another $377,000 was deposited into the Durkee business account again from Solorio. Coleman said that money was apparently used to make payments to a number of campaigns that were her clients.
The complaint centers on the Solorio funds, but appears to indicate the potential for problems with other clients as well.
The FBI complaint said Durkee "appears to have signature authority over more than 400 bank accounts, including those for political campaigns, and that substantial sums of money have been routinely moved out of client campaign committees into D&A accounts or into other client campaign committee accounts."
The complaint added that many of those transactions were not reported as required in disclosure forms to the state.