Ex-political treasurer took family's money, campaign advisor says
Former campaign treasurer Kinde Durkee, who pleaded guilty Friday to federal charges stemming from an investigation of millions of dollars taken from candidates’ political accounts, also siphoned money from personal accounts of a high-profile Los Angeles political consultant, the consultant's attorney said.
The consultant, John Shallman, was one of Durkee's closest colleagues and is currently advising candidates for Los Angeles mayor, city attorney and district attorney.
Politicians relied on Durkee to manage the political contributions raised from supporters and special interests. Shallman said he entrusted Durkee with something more dear: much of his family’s finances and investments.
In a statement, Shallman's attorney, Scott Brown, said that Durkee handled Shallman’s "taxes, personal and business bookkeeping for years. After her arrest, a forensic accountant determined that Ms. Durkee stole at least $1 million from Mr. Shallman and misfiled his tax returns.”
Shallman declined to be interviewed but provided correspondence from federal prosecutors identifying him as a victim. He also issued a statement discussing his experiences with Durkee, who worked with him on several campaigns.
“With four kids and the demands of running a small business full time, it seemed like such a relief to have someone we thought we could trust handling all of our business affairs. Instead it turned into a nightmare,” he said.
In 2010, a default notice was entered on Shallman’s Encino home, stating that he owed more than $333,000 on the property, records show. A notice of a trustee’s sale was rescinded last year. By January, state and federal officials had filed liens stating that Shallman had $1.5 million in unpaid taxes.
Shallman's attorney, Scott Brown, said Friday that his client has begun to put his house in order, by making “substantial payments” to the IRS and making his taxes current in 2010 and 2011.
Shallman has been handling Assemblyman Mike Feuer’s run for Los Angeles city attorney, City Controller Wendy Greuel’s bid for mayor and City Atty. Carmen Trutanich’s run for district attorney, among others. Unlike politicians who were previously identified as victims of Durkee, Shallman will not be able to turn to campaign contributors to replenish his funds.
The financial troubles could put him in an awkward spot. In 2002, 2003, and 2009, his clients used tax liens as a cudgel to attack their opponents. The most recent example was Greuel’s successful 2009 race for city controller, which portrayed opponent Nick Patsaouras as a tax scofflaw.
In a 30-second television spot released in the final weeks of the campaign, the cartoonlike ad showed tax bills flying out of a mailbox and past Patsaouras’ face and into a trash can. “Nick Patsaouras for city controller? Try out of control,” the voiceover said.
Durkee's attorney, Daniel Nixon, could not be reached for comment.
--David Zahniser at Los Angeles City Hall