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Big time swindling isn’t just for big shot Wall Street con artists, such as Bernie Madoff. It seems that California lawmakers’ campaign accounts also make good marks.

U.S. Sen. Dianne Feinstein is the latest Democrat claiming to have been hornswoggled out of election cash by campaign treasurer Kinde Durkee, a Democratic treasurer who’s been likened to ponzi-scheme pilferer Bernie Madoff.

Feinstein’s campaign, which had a cash balance of $5 million on June 30, believes it suffered losses but does not know how extensive they were, according to campaign advisor Bill Carrick. The campaign puts the blame squarely on Durkee, who managed the senator’s finances for years along with the accounts of several other top California politicians.

Feinstein said the campaign is presently unable to determine exactly how much money was “appropriated” for the campaign treasurer’s alleged “self-imposed stimulus” plan. Feinstein added she and her campaign staff have been unable to access all their bank records at this point because Durkee alone controlled access to the account, which has made it difficult for them to assess how much money is gone.

Durkee was arrested and hit with fraud charges earlier this month. U.S. Rep. Susan Davis (D-San Diego) told her contributors in a letter released Monday that her campaign was robbed of about $250,000. Davis told supporters that reports to the FEC “accurately reflected her contributions and spending, but Durkee falsely reported account balances to the campaign.”

Durkee is also alleged to have so far victimized U.S. Reps. Loretta Sanchez (D-Garden Grove) and Susan Davis (D-San Diego), state Sen. Lou Correa (D-Anaheim) and Assemblyman Jose Solorio (D-Santa Ana).

Sanchez declared her $379,000 campaign war chest was “nearly wiped out” by Durkee. The Los Angeles County Democratic Party reported that it is also missing at least $200,000. Solorio currently leads the pack with $677,000 in disappeared campaign cash.

Durkee had authority over more than 400 bank accounts, including political campaigns, according to the federal complaint filed earlier this month. Dozens of other campaign committees have yet to declare whether they suffered losses as well. The federal mail fraud complaint accuses her of moving campaign money from Solorio’s account to the accounts of Davis, Sanchez and Beth Krom, the Democratic Irvine city councilwoman whose losing campaign to unseat Rep. John Campbell (R-Newport Beach) in November 2010 was mired in debt.

Over the last decade Durkee had racked up $185,860 in fines from the Fair Political Practices Commission in eight different cases, a sum that FPPC Chairwoman Ann Ravel said points to “quite serious” issues.

The Durkee and Associates founder, who began her campaign treasurer career in the early 1970s, reportedly had admitted to the FBI that she has for years misappropriated her clients’ money and filed false reports to cover up the thefts. She then spent the booty on her Burbank company’s payroll, her credit card bills, her mother’s assisted living facility and other personal expenses.

The longtime Democratic campaign treasurer had a lengthy history of fines and investigations in California, but she had a relatively clean record on a federal level. There have been a few unsuccessful complaints lodged against her, but no fines reported on Federal Elections Commission’s website. A Los Angeles Times story from last Sunday suggests clients might have known better than to do business with Durkee, based on her 10-year history of fines by the state.

But according to Atlantic Wire writer Adam Martin, a search of the Security and Exchange Commission’s records yielded much different results. Her name shows up only in Matters Under Review, that is, cases where a complaint has been lodged from outside but wrongdoing not confirmed. She’s only accused of violating the 1971 Federal Election Campaign Act in three instances. In only one (as Sanchez’s treasurer) did the commission find any reason to think she had violated the act, and in that case it took no further action.

Aside from the matters under review, Durkee’s name appears in the FEC’s records in 2009 when she suggested ways for the commission to become more transparent on the web. Records show she made five suggestions on how the commission could make more of its data available to lay people online and improve its web-based services.

Durkee’s entire client list isn’t available, but she represented more state and local politicians than she did federal ones, which could be a reason for her low federal profile, leading authorities to think she might have played by the rules federally.

As of press time, Durkee was free on a $200,000 bond.

–Sources: Atlantic Wire/LA Times, OC Weekly, FOX, Federal Law Enforcement Information reports

California has a budget as of Friday morning, and it only took 100 days to get it! After a record length of time without a spending plan, the state legislature recorded the final vote on the $87.5 billion budget at 8:25 a.m., after an “all-nighter” power session that saw intense work on the 20 interrelated bills that make up the document.

Passed with bipartisan support, the budget nonetheless didn’t please everyone, and only squeaked by with just enough support to win two-thirds majorities in the Assembly and Senate.

Governor Arnold Schwarzenegger, who helped broker the deal that led to the vote, said he would sign the budget “quickly,” probably sometime during the day Friday. The governor called for a $1.2 billion reserve in his May proposal, but lawmakers approved only $200 million. Schwarzenegger said he’ll likely use his line-item veto power, which could mean further spending cuts, to increase the amount approved by the legislature.

Meanwhile, the government may have closed the original $42 billion budget gap, and saved the state from insolvency, but the budget is far from the cure for California’s financial ills. Waiting down the road for residents is a mix of tax increases and spending cuts, contrary to what was hoped for by the governor’s office. Under the new budget, residents will be asked to pay as much as $13 billion in “new” taxes. State spending, meanwhile, will be cut by $15 billion in the next 17 months, including $8.6 billion from public education.

K-12 public education and community colleges will share in $52.5 billion, but nearly $2 billion of that will not be paid until the next fiscal year. Schools also would get a $300 million payment on funds they are owed from previous years, but the budget also suspends Prop. 98, the formula used to calculate education spending. State university fees also head north in the new budget, though by how much is not yet clear.

Everyone will feel the budget sting, including the lower- and middle-class. For households earning $150,000, state tax increases will essentially cancel out the $800-per-couple tax credit in the stimulus package signed by President Barack Obama earlier this week, according to California’s Legislative Analyst’s Office.

The budget calls for raising the sales tax by one percentage point and adding 0.25% to state income taxes. Vehicle license fees are expected be adjusted up to 1.15% from 0.65%, a remarkable capitulation for Schwarzenegger, who resisted any such increase for the longest time. The governor won election in 2003 after campaigning to cut taxes and impact fees on vehicles registered from out of state, which he did after taking office.

Hoping to save $1.4 billion in payroll expenses, lawmakers plan to eliminate two state holidays, change overtime rules and furlough workers at least one day a month.

Even with the proposed tax increases and spending cuts, California will need to borrow money and use some of its share of federal stimulus money to make up the budget deficit.

In the midst of all the glum news, there are some budget winners: California’s prison system and some corporations. The new budget won’t cut prison funding a nickel. The budget also includes $700 million in tax breaks for large corporations, as the government tries to make a cushier berth to lure more business back to California and keep existing companies from leaving the state.

Interestingly, the budget forces Californians, and to a certain extent lawmakers, to tighten their belts. In addition to the national economic recession, California was hit harder than most states by the housing crash. Some homes lost as much as half their value over the past three years. December unemployment nearly doubled to 9.3% from 5.9% a year earlier.

California’s economy is large and diverse, and many economists still maintain that the state will recover, but perhaps a little slower because of the budget deal. A cut in state spending will result in even fewer jobs, some money experts think, while an increase in taxes may only further discourage already tightened consumer spending.

As expected, much wheeling and dealing ensued to get GOP lawmakers on board. For example: State Sen. Abel Maldonado (R-Santa Maria) cast the final Republican vote needed, after senate leaders met his demand to kill a gas-tax increase and add an election-reform proposal to a state ballot.

As of Aug. 31, California State Treasurer Bill Lockyer’s web page said the state owes $43,564,471,252 in total debt. That amount, however, reflects a 15.7% decrease from the same time in 2009.

Research for this story came from stories in the San Francisco Gate and Wall Street Journal. -AG