Alleged embezzlement hits Calif. Dem races

WASHINGTON, Nov. 3 (UPI) -- An alleged embezzling scheme siphoned more than $5.2 million from several California Democrats' congressional campaign accounts, officials said.

The hardest hit include U.S. Sen. Dianne Feinstein, whose re-election campaign reported a cash-on-hand adjustment of more than $4.5 million because of misappropriated funds, U.S. Rep. Susan Davis, whose campaign re-figured its cash-on-hand by $160,015 to account for allegedly embezzled funds, and Reps. Linda Sanchez and her sister Loretta Sanchez, whose campaigns reported about $322,123 and $125,000, respectively, were missing, Roll Call reported Wednesday.

The losses likely will grow as campaigns work to identify suspicious transactions that allegedly allowed bookkeeper Kinde S. Durkee to misappropriate millions of dollars from nearly 400 client accounts, aides said.

Besides the missing funds, campaign aides told Roll Call the bank where the Durkee-associated accounts had frozen money in the accounts and asked a judge to determine where the funds should be.

Durkee, 58, was arrested in September on suspicion she used her bookkeeping firm Durkee & Associates to draw off about $677,000 from the election campaign of California Assemblyman Jose Solorio to pay for personal expenses. Since then, the investigation of the Burbank, Calif., firm has broadened to include accounts maintained by lawmakers' re-election campaigns, non-profits and county-based political party organizations.

Attorneys told Roll Call campaigns likely would file civil lawsuits against Durkee while the U.S. Justice Department conducts its investigation.

"There's a race-to-courthouse element to this. If you want priority, you want to file your claim as soon as you can," said Joseph Birkenstock of the law firm Caplin & Drysdale, which has offices in Washington and New York.