I'm intrigued by news that a campaign treasurer and fund-raiser for many Democratic Party politicians in California has been arrested on charges of fraud. The Los Angeles Times reports:
Many big-name Democratic politicians used the services of a top campaign treasurer even though she had a history of fines and investigation into how she used the funds of elected officials.
Kinde Durkee was arrested on federal fraud charges this month, accused of taking thousands of dollars from the campaigns of various elected officials. Rep. Loretta Sanchez (D-Garden Grove), a Durkee client, said her campaign fund was nearly cleaned out, and the Los Angeles County Democratic Party reported that more than $200,000 had been taken from its fund.
Although many Democratic insiders said they were shocked by Durkee's arrest, it was far from the first sign of trouble. When the FBI launched its investigation into Durkee in January, the Los Angeles County district attorney's office and the state Fair Political Practices Commission were already probing Durkee's use of campaign funds.
Over the last decade Durkee had racked up $185,860 in fines from the Fair Political Practices Commission in eight different cases, a sum that FPPC Chairwoman Ann Ravel said points to "quite serious" issues.
There are only a few other campaign treasurers in California who, like Durkee, deal with a large number of clients. None have such an extensive history of violations, Ravel said.
"This is an anomaly — I don't believe that we have seen a case of this magnitude," she said.
One longtime client, state Sen. Christine Kehoe (D-San Diego), fired Durkee in 2009 and notified the district attorney's office after an audit of her campaign fund by the state Franchise Tax Board turned up "irregular activities." Kehoe's office declined to elaborate to The Times about her concerns.
Federal agents arrested Durkee on Sept. 2 at the Burbank office of her firm, Durkee & Associates, on suspicion of federal mail fraud.
. . .
According to an affidavit filed with the complaint, Durkee "admitted that she had been misappropriating her clients' money for years." It was unclear how many are potential victims.
Elections records showed she has worked for hundreds of campaign committees, and the criminal complaint said she had signing authority over more than 400 bank accounts.
There's more at the link. Politico reports that a large number of politicians, including such leading lights as Senator Dianne Feinstein, may have lost millions of dollars.
I don't understand how so many politicians could have continued to use the services of someone who'd been cited for irregularities so many times. I mean . . . did they never think to check on such things? Was there no due diligence at all? If not, how the hell can we trust those same politicians to look after public funds when they can't be bothered to look after their own?
The same thought appears to have struck other observers as well - and more than that. As the NBC blog PropZero notes:
The most telling thing about the FBI's arrest of a longtime campaign treasurer on suspicion of fraud is that none of the politicians who appear to be the fraud's victims are expressing shock, at least publicly.
One reason for the lack of shocking: anyone who knows anything about campaigns knows that they are relatively easy to rob.
. . .
... if campaigns were businesses, they would be the type of businesses that would be easy to rob.
Think about it.
Campaigns are short-term businesses -- they set up for several months, then they often shut down once a race is over.
The people responsible for them -- the candidates -- don't have the time to supervise the spending of every penny; the candidates are too busy campaigning.
Cash comes in and goes out fairly rapidly during campaigns. And campaigns don't have shareholders expecting profits to provide pressure for accurate accounting.
To the contrary, campaigns are generally expected not to make money -- they are expected to win. In fact, it's common for campaigns to lose money. If the person holding the money takes a little extra, who is going to notice?
Again, more at the link.
Richard Fernandez, blogging at Belmont Club, responds to PropZero's comments:
What a cruel suggestion. One would think that political campaigns were operated by criminal syndicates, instead of by fine, upstanding public servants, who when robbed would never call the police lest the investigation should lead to questions about how the money was acquired in the first place. In that case the lack of integrity would be an absolute prerequisite for handling shady funds, and would be like saying “it takes a thief to handle dirty money”.
Then why the beef? Why is Durkee after so many years of apparently satisfactory service now facing charges? Perhaps some line was crossed, some understanding betrayed; at any rate the campaign money of a lot of Democratic campaign money has now gone missing. A cynic might think that the Durkee case would be a great way to account for the loss of a lot of funds. There the trail ends in that black hole and of that money nothing more was ever known.
As Alice said: "Curiouser and curiouser!"