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Feinstein Estimates Embezzlement Loss At $4.7M

WASHINGTON (AP) -- Sen. Dianne Feinstein's re-election campaign estimated on Friday that she is missing nearly $4.7 million because of unauthorized disbursements by her former campaign treasurer, Kinde Durkee.

The campaign filed its first report with the Federal Election Commission since Durkee's arrest last month, providing the first official glimpse of the potential financial toll on candidates who employed the longtime Democratic campaign treasurer.

Feinstein's campaign reported that it has nearly $6 million in the bank, but that's mostly due to a $5 million loan Feinstein injected into the account after the embezzlement case broke. The campaign believed it had nearly $5.2 million in an account with First California Bank going into July, but that account is now showing only $662,100.

Durkee was arrested on Sept. 2. She has not yet entered a plea and is due to appear in court Oct. 19. Her attorney, Daniel Nixon, did not return a call seeking comment.

Feinstein's campaign estimated its losses toward the end of the 184-page report. It noted $4.6 million in "unknown disbursements." It also noted a $100,000 unauthorized disbursement on Aug. 31, just a couple of days before Durkee's arrest.

The campaign said it didn't know where the $100,000 came from or where it went.

The campaign stressed that it's possible and even likely that it will have to make amendments to the fundraising report over the coming months as law enforcement officials investigate Durkee's work and as a civil lawsuit makes its way through the court.

"We have gone to great lengths to locate records and provide as accurate and complete a report as possible under extraordinary circumstances," Feinstein's new treasurer, William Wardlaw, said in a cover letter that the campaign sent to the FEC along with its financial report.

Feinstein is a heavy favorite to win a fourth term next year and is wealthy enough to self-fund a campaign, unlike other members of Congress or candidates for state office in California who used Durkee's services and may have lost money.

Reports for some of the other federal officeholders who employed Durkee, including Democratic Reps. Loretta Sanchez and Laura Richardson, were not available Friday evening.

Federal prosecutors originally accused Durkee of siphoning nearly $700,000 from a California candidate and charged her with mail fraud. The case took on greater significance after she admitted to authorities she had been misappropriating money from her many Democratic clients for years.

(Copyright 2011 by The Associated Press. All Rights Reserved.)

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