Hollywood Donors Hit in Campaign Embezzlement Scandal

Sen. Dianne Feinstein’s campaign war chest was wiped out in the scandal that has forced the Democratic Party to hit up donors for more money

Last Updated: September 14, 2011 @ 6:46 AM

Hollywood donors are high on the list of political donors whose money is presumed lost in an alleged embezzlement scheme that led to the arrest last week of a longtime Democratic operative.

Sony, Disney, News Corp., labor group IATSE and the Motion Picture Assn. of America are among the top donors whose funds have been lost, along with several million dollars in the campaign war chest of California Democratic Senator Dianne Feinstein (left), according to Opensecrets.org.

Feinstein says her campaign treasury has been “wiped out” by Kinde Durkee, a treasurer and political operative who apparently also misused funds from an unknown number of other politicians’ accounts in the state.

Congresswoman Susan Davis, a Democrat from San Diego area, suggested that Durkee might be “the Bernie Madoff of campaign finance treasurers.”

Also read: Obama's Got a Friend at Sony: Studio Leaders Big Donors in Past

As the full extent of the damages emerges, the Democratic Party is faced with the unenviable task of going back to donors for more money. L.A. County Democratic Party chair Eric Bauman, who’s also vice chair of the state Democratic Party, told TheWrap that process is already underway.

“I can’t say for sure [who will contribute], but we’ve started to reach out to our friends at Warner Bros., Universal and Sony, and donors like that,” he said.

TheWrap's investigation of federal election records determined that the major studios, showbiz law firms, guilds like the International Alliance of Theatrical Stage Employees all contributed to Feinstein’s war chest.

Feinstein’s top donors from 2007-12 include IATSE at $30,000, Manatt Phelps and Phillips law firm at $18,750, Sony Corp. at $17,200, Walt Disney Corp. at $16,600, News Corp. at $15,625 and the Motion Picture Assn. of America at $14,700, according to OpenSecrets.org. (Sitting atop the roster was the utility PG&E at $69,100.)

Among the individual Hollywood donors who may feel their lost dollars like a missing limb are Sony’s Michael Lynton, who gave Feinstein $2,050 this year and Universal’s Ron Meyer, who contributed $2,500 to Loretta Sanchez in May.  Meyer didn’t repeat his 2009 gift to Feinstein (Disney’s Robert Iger  and Warner Bros.’ Alan Horn gave then as well, but not since), but Meyer’s  colleague,  chairman Adam Fogelson, gave the senator $625 in February.

 

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Much of the money the L.A. County Democratic Party raises from wealthy Hollywood patron goes to support their monthly operations. Bauman admitted that he’s not looking forward to “having to raise that money all over again.”

A significant part of LACDP funding, doled out to select candidates and causes, came from last October’s Hollywood fundraiser, which featured Robin Williams, Eddie Izzard and Sarah Silverman. Bauman said the event, which was kept slightly under the radar but quickly sold out with tickets going for as much as $500, might see another iteration if he can organize it.

He was hopeful. “We have the largest district of Democrats in the country with 2.3 million in L.A. County,” he said.

Other elected officials in the state lost donations in the alleged scam.

The office of Congresswoman Loretta Sanchez, Democratic Representative from the 47th District in Orange County, declined comment on a reported loss of $379,000 in funds. But Davis was more upfront, emailing supporters, saying, “We’ve been robbed!” and invoking Madoff.

Also read: Elections '10: Who's $upporting Whom in Hollywood

A federal affidavit filed in connection with Durkee’s Sept. 2 arrest by the FBI claimed she admitted misappropriating clients' funds for years and filing false federal campaign forms.

The document filed by a Special Agent of the Public Corruption Squad in the Sacramento Field Division concentrated on a particular scheme by which Durkee shifted funds from Assembly candidate Jose Solorio’s account to another campaign. The disgraced treasurer is also accused of using the diverted funds for her own credit card bill and her mother’s nursing home payments.

Durkee was released on bail of $200,000 with the provisions that she not leave the region, nor be in contact with her Burbank-based firm.

Feinstein consultant Bill Carrick told the Los Angeles Times that Feinstein has not been able to access information on the $5.2 million raised by her campaign, funds that Durkee had been handling.

Feinstein told Politico that Durkee had managed her campaign finances in 1992, 1994, 2000 and 2006, and during her failed 1990 gubernatorial campaign.

Feinstein and other legislators were taken by surprise by the arrest, but she has been under investigation for years. At the time the FBI kicked off its probe in January, the Los Angeles County district attorney's office and the state Fair Political Practices Commission were already Durkee.  She’s been hit with $185,860 in fines from the Fair Political Practices Commission in eight separate cases over the past ten years.

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