Every client of prominent California campaign treasurer Kinde Durkee, arrested earlier this month on a federal charge of mail fraud, has been cut off from their funds, effective Friday.
Durkee & Associates served as the treasurer for hundreds of Democratic organizations, candidates and nonprofit organizations, and the California political world is still reeling from her arrest and suspicions that she embezzled hundreds of thousands of dollars from election funds.
Local groups frantically checked their books after the news but found no discrepancies. Even so, they are now cut off from their money.
First California Bank, used for all of Durkee & Associates, decided to shut down all client accounts and hand over the investigation to Los Angeles Superior Court to determine how much money is owed to each account holder, according to a news release.
It added that Durkee apparently commingled funds and made transfers between them, so it’s likely the balances don’t “accurately represent the funds” that actually belong to Durkee & Associates clients.
Santa Barbara Democratic Central Committee chairman Daraka Larimore-Hall sent out a newsletter Tuesday outlining the organization’s predicament: The process of distributing funds back to clients could take months or years, so the group is in the middle of a City Council campaign without access to its money.
“The bank freaked out about the liability of giving people their accurate amounts of money and bank statements,” Larimore-Hall told Noozhawk. “I don’t think we’re going to have access soon, but there’s no reason to believe that it’s gone.”
While it’s standard procedure for bookkeeping and treasurer services to have a relationship with one bank, it’s unfortunate for clients, especially nonprofits and political clubs that organize events year-round, he said.
The bank was asking clients for signed letters, then state reporting forms, then waivers holding the bank harmless, and many clients refused to sign anything until they saw the contents of their bank accounts, Larimore-Hall said. On Friday, the bank decided to turn the investigation over to the court system.
The group had about $13,000 in the bank and also handled the money for local clubs, including the UCSB branch of Campus Democrats, who are in the same boat.
The Democratic Central Committee created a new account — with a new treasurer — that so far holds money from the Labor Day event fundraiser. It’s focused on raising money before the November City Council election.
“That’s where county party organizations are the most inconvenienced by this, because there are lots of off-cycle municipal elections,” Larimore-Hall said.
The Democratic Women of Santa Barbara County and the Santa Barbara Women’s Political Committee were also clients of Durkee’s and haven’t discovered any discrepancies, they told Noozhawk.
— Noozhawk staff writer Giana Magnoli can be reached at gmagnoli@noozhawk.com. Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.