Thursday, Sept. 15, 2011 | Beyond draining the campaign coffers of nearly every top-tier Democrat in Orange County, the massive embezzlement allegedly carried out by Burbank-based campaign treasurer Kinde Durkee has had a stark impact on the local Democratic Party’s organization.

Since Durkee’s arrest, one after another high office holders have reported losses ranging from several hundred thousand dollars to millions.

Durkee was arrested over the Labor Day weekend by the FBI. Included among the victims so far are Assemblyman Jose Solorio, state Sen. Lou Correa, Rep. Loretta Sanchez and U.S. Sen. Dianne Feinstein.

Less publicized, however, is the effect Durkee’s federal indictment has had on the accounts of the Democratic Party and scores of Democratic clubs. The accounts have been frozen, and leaders are scrambling to figure out the status of their balances.

“For the clubs, it’s really devastating,” said Nick Anas, president of the Orange County Young Democrats. “It’s already really tough to raise money.”

The news comes at a particularly difficult time for the party as it deals with the abrupt resignation of Executive Director Gerrie Schipske during preparations for the Truman Dinner, the party’s most important annual fundraising event in October, which will feature Gov. Jerry Brown.

Anas broke the news to members at a mixer last week. He said that club officials have used Durkee for years and now cannot even get account balances because Durkee had all the signing authority. Anas said he has no idea of the club’s balance and is nervous because they just held their annual fundraiser.

The clubs, Anas said, “make up the volunteer base and are the soul of the party locally,” especially since they are key for fundraising and outreach in city council and other local races.

“Long term, it could be horrible,” Anas said, noting that last year Democrats financed a get-out-the-vote effort. “They [Durkee & Associates] have done more to hurt us than the Republicans could ever have,” Anas said.

Local Democratic Party Chairman Frank Barbaro is stuck making final preparations for the Truman Dinner without knowledge of the party’s finances.

“We don’t know how much money we have left,” said Barbaro, who added that he had already opened another fundraising bank account for for the dinner.

“It’s not going to kill us,” Barbaro said. “I’m in the process of raising money for the Truman Dinner, and I’m being extremely successful in the phone calls I’m making.”

Barbaro confirmed rumors that Durkee’s case prevented the party from issuing a final paycheck to Schipske, who left to take a job at Cal State Long Beach. But he said the issue would quickly be corrected.

“Gerrie did a fabulous job,” Barbaro said, insisting that she was not pressured to resign.

Barbaro said the greatest impact on party operations was the loss of campaign cash for top-tier Democrats and the possibility that those who have already donated will be unable to donate more.

“It’s certainly not good when Loretta [Sanchez], Lou [Correa] and Jose [Solorio] all lose the great majority of their campaign funds. And with this ruling that we can’t re-max out to campaigns, there’s a lot of tension on that front. But as far as the Democratic Party is concerned, the ship of state moves forward.”

Barbaro acknowledged, however, that there are rumblings about disruptions in the party, noting that the last Democratic Central Committee ended abruptly with the party treasurer leaving the meeting amidst calls for greater transparency.

He’s even heard rumors that some labor officials were considering trying to decertify the party over concerns that the party organization for volunteers and fundraising is decaying. Both Barbaro and labor leaders deny the rumors.

Barbaro said the Durkee affair has complicated matters even further, but he says he remains confident.

“I am going to be making strong efforts to stimulate the existing Democratic Party in terms of contributing money and doing volunteer work on behalf of the party,” he said.

Meanwhile, Orange County Republican Chairman Scott Baugh is downplaying any edge the Republicans might have gained from the Durkee affair.

“There’s two things you can count on,” said Baugh. “The Republicans will field candidates in every one of those races [Sanchez, Correa and Solorio]. And No. 2, the Democrats will scramble and eventually raise enough money to be competitive. I don’t think the dynamics will have changed at all.”

Disclosure: In 2010, Durkee’s firm filed an IRS 990 tax form on behalf of Voice of OC.

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