Campaign Cash Do-Over OK In Some Cases
But now, the multi-million dollar question in the allegations of embezzlement against Durkee: which donations were actually deposited... and thus are now final... and which were not?
With the criminal investigation into Durkee's activities still ongoing, the many Democratic candidates and groups that used her accounting services are wondering how to make up the dollars that are now missing from their political bank accounts.
This afternoon, the state Fair Political Practices Commission released an analysis from its staff attorney that says some donors may, in fact, be able to write another check -- even if they assumed they had maxed out under campaign contribution limits.
Those limits do "not apply where a contribution for an upcoming election was delivered to Durkee, but the contribution was never deposited," writes FPPC attorney Zackery Morazzini in his 11 page report (PDF) in advance of the commission's November meeting.
This is exactly the point several Democrats made at the commission's most recent two meetings to assess the potential impact from the Durkee scandal. Law enforcement records indicate that the long-time professional treasurer had access or control to some 400 campaign accounts, ranging from local Democratic clubs to the campaign cash for high-profile Dems like U.S. Senator Dianne Feinstein.
The wide spread pattern and practice of fraud alleged to have been employed by Durkee indicates that, in instances where she never deposited the contributions into her clients' accounts, she was committing fraud at the outset and thus did not "receive" these contributions as an agent for the candidate or committee... Absent acceptance or receipt by the candidate, committee, or proper agent, the transaction has not been completed and there has been no contribution that would be subject to the contribution limit."
Now, the hard part: which dollars from which donors were actually depsoited?
The answer to that question is likely going to take some time. For starters, the criminal investigation into Durkee's business practices has yet to wrap up; and until it does, there's likely not going to be a very clear picture of which dollars were put where.
There's also the complication of the dollars that actually are left in the campaign accounts. The bank used often by Durkee, First California Bank, has turned over all of those funds to the courts -- thus freezing a total of some $2.5 million pending additional legal action. That may even further vex any candidates who are trying to assess whether John Smith's $2000 contribution was actually deposited into his or her account.
As the FPPC memo makes clear, any contribution that was actually deposited -- even if never used in a way authorized by the candidate or organization -- counts under contribution limits. And the commission has no power to make an exception to those limits.
"Any such exception," says the memo, "would have to be enacted through legislation and further the purposes of the [Political Reform] Act."
The commission also appears poised to allow candidates to create legal defense funds to pay for the costs of trying to get some, or all, of the money back when it comes to the funds frozen by First California Bank. But the FPPC memo suggests those accounts cannot be used for independent civil actions -- say, to sue Durkee to recover funds -- though it suggests the commission may want to ask the Legislature to act on that issue.