Money & Politics | Daily Report

Henry Vandermeir/California Democratic CouncilKinde Durkee controlled hundreds of Democratic bank accounts and has been accused of misappropriating campaign funds.

Democrats in the state Legislature face a tantalizing opportunity: They could waive campaign contribution limits to help fellow Democrats hit by the Kinde Durkee fraud scandal.

The catch is that they would need Republican support to meet a two-thirds vote requirement.

Durkee, who controlled hundreds of bank accounts for Democratic candidates and committees, has been accused of misappropriating campaign funds, and the accounts are now frozen. Advocates for politicians affected by the scandal have asked the Fair Political Practices Commission to temporarily waive contribution limits, allowing candidates to go back to maxed-out donors in order to make up for lost cash.

Contributions deposited into a candidate's account and later frozen or stolen still would count toward donation limits, Zackery Morazzini, the commission's general counsel, wrote in an opinion [PDF] this week. Only the Legislature could change that, Morazzini wrote.

That scenario could turn the fraud scandal into a partisan issue for state legislators.

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"Since it mainly affects Democrats and the Democrats are in the majority, it’s clearly in their self-interest to allow themselves to raise more money, and they’d like to do that," said Bob Stern, former president of the now-closed Center for Governmental Studies.

Some Republicans might go along with it out of ideological opposition to campaign finance regulations, said Stern, who opposes waiving the limits.

On the other hand, Republicans would have good reason to block such an effort, especially ahead of the 2012 elections.

Even state Sen. Lou Correa, D-Santa Ana – who had to dip into personal funds after his Durkee-managed campaign account was frozen – isn't sure he'd support waiving the contribution limits.

"I think it’s going to be an uphill battle," Correa said. "Generally, legislators tend to look really carefully at things like that."

Correa said his more immediate concern is finding out what happened to his campaign money. The bank won't give him access to his account because he won't agree to waive the bank's liability, he said.

"My headache is I have no idea what transpired in my account," Correa said. "I'm just kind of flying blind, and this is a very uncomfortable position."

Correa said some donations to his campaign may never have been deposited into his account. Such donations wouldn't count toward contribution limits, according to the FPPC staff opinion. The commission will consider the staff report at a Nov. 10 meeting.

In the meantime, it would be premature to weigh in, said Mark Hedlund, spokesman to Senate President Pro Tem Darrell Steinberg, D-Sacramento.

"It's certainly unfair that candidates who may have been victims of such a theft (if the allegations prove to be true) are put at such a disadvantage in their campaigns through no fault of their own," Hedlund added by e-mail.

Waiving the limits would entail amending the Political Reform Act of 1974, which was enacted by ballot initiative. The Legislature has amended the law many times, to strengthen disclosure requirements and close loopholes, said Darren Chesin, chief consultant to the Senate Elections and Constitutional Amendments Committee. Any change, he said, would have to further the purposes of the act and would be heavily scrutinized.

Dan Schnur, former chairman of the Fair Political Practices Commission, said the Legislature should not void limits passed by voters.

"These campaign contribution limits exist for a reason, and eliminating them to allow a donor to buy twice as much access as is currently allowed under state law is not a good idea," said Schnur, a former Republican political strategist.

"The temptation for many legislators to avoid campaign contribution limits has got to be pretty strong," he added. "But if someone steals my wallet on the way home from work, I can’t go to my boss and ask for more money."

Stephen Kaufman, an attorney representing many former Durkee clients, said waiving the limits would not give donors improper access to politicians.

"We think that where people can establish that they never got use of their money, they should be entitled to raise additional funds from contributors who may have given to them," Kaufman said. "We recognize that any solution has to be narrowly tailored to fit this situation."