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Durkee's lifestyle didn't square with the allegations against her

The politicians and consultants who trusted the Long Beach resident with millions of dollars saw little to hint that she might become vilified as the 'Bernie Madoff of campaign finance treasurers.'

October 02, 2011|By John Hoeffel, Patrick McGreevy and Jean Merl, Los Angeles Times
  • The 1950-vintage house Kinde Durkee owns with her husband on a tidy street in Long Beach's Bixby Knolls is distinguished by its neglect.
The 1950-vintage house Kinde Durkee owns with her husband on a tidy street… (Luis Sinco, Los Angeles…)

She is described by people who hired her as modest, generous, pleasant and so ordinary they struggle to recall anything about her. Her lifestyle showed no sign of extravagance. Quite the opposite.

The politicians and consultants who trusted Kinde Durkee with millions of dollars saw little to hint that she might become vilified as "the Bernie Madoff of campaign finance treasurers."

The 1950-vintage house she owns with her husband on a tidy street in Long Beach's Bixby Knolls is distinguished by its neglect. The lawn is sparse and browning, the house is a weathered yellow, the paint on the door is alligatored, the lock is rusty, and the doorbell button is missing. The squat brick office they bought for Durkee & Associates in an industrial area of Burbank has an unfinished particleboard back wall and sits between a body shop and a used-boat emporium.

Before being arrested last month for allegedly filing false reports to cloak an embezzlement scheme, Durkee drove an 11-year-old Dodge pickup to work. Recently, the heavyset, tousle-haired 58-year-old clambered into a 13-year-old Chevy Blazer to escape from a television crew — but was trapped on camera while the engine strained to catch. The other car in her driveway that day was a 16-year-old Audi.

As the treasurer considered the "platinum standard" in California, Durkee oversaw at least 360 bank accounts for almost 100 candidates, six dozen political action committees, about 60 Democratic clubs and committees and a handful of nonprofits. The ongoing federal investigation has triggered turmoil in state Democratic circles, with politicians, including members of the Los Angeles City Council and Congress, locked out of their accounts and worried that millions of dollars may be lost. U.S. Sen. Dianne Feinstein had $5.2 million, according to Durkee's last report, but the bank can find just $662,101.

"I never saw her driving a Ferrari. She lived a very non-pretentious life," said state Sen. Louis Correa (D-Santa Ana), who met her when he first ran for office 17 years ago. "You see a persona and then you see this, and the picture doesn't fit."

The image that emerges from Durkee's political world is of an intentionally low-profile player who rarely discussed her personal life. She had a sweet voice and a pedigree that inspired trust. She was the protege of a Los Angeles accountant who had a national reputation for his ethical standards and the daughter of a beloved Lutheran minister memorialized as "gracious, warm, caring and ever-present."

But records show that Durkee appears to have had trouble managing her own money. Chase Manhattan Bank filed two lawsuits to recover $26,414 that she charged on four credit cards. She settled in 2003. Four liens were filed against her between 2003 and 2008 for $22,604 in taxes, but they have been lifted.

Durkee — who is not a licensed accountant — ran Durkee & Associates in a highly unorthodox manner, according to bank officials, state and federal audits and the affidavit that lays out the case against her.

She commingled cash between clients' accounts and her firm's without authorization, transferred enormous sums to Durkee & Associates accounts to pay for business and personal expenses, and accepted credit-card donations intended for different candidates into a single account, sometimes failing to distribute the money to campaigns for hundreds of days.

Feinstein's campaign, which sued Durkee and First California Bank, alleges she used the Century City branch where she was well-known to shift money in and out of the Democratic senator's accounts, as much as $100,000 in a day, "with only one apparent — and illegal — reason: to cover overdrafts."

Federal officials are probing whether this was a variation on a Ponzi scheme to steal millions of dollars. Records, however, show Durkee may have been losing money. Durkee made loans to campaigns that were sometimes never repaid and has been accused of covering up for a former employee who embezzled. If magnified over a decade, that could have left Durkee in a deep hole.

The state Fair Political Practices Commission has repeatedly investigated Durkee and has issued $171,362 in fines for campaign finance violations in which it concluded she had some responsibility. Durkee paid some of that amount, adding to her woes. Compared with those of other treasurers, her record was described by the commission's chairwoman as "an anomaly."

"The woman had a record that would tell you she was being sloppy," said state Democratic Party Chairman John Burton, who refused to work with her. "I think what she was doing was taking the money from Peter and covering up what she did to Paul."

Durkee has not spoken publicly about her case. She did not respond to calls or notes left at her home. Last week, her home phone was disconnected. Her lawyer, Daniel V. Nixon, did not respond to calls or emails. Employees, friends, neighbors and relatives did not reply to messages or tersely declined to talk.

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