AO 2012-07: Feinstein may recoup only some contributions

Senator Dianne Feinstein’s re-election committee (the Committee) may receive replacement contributions for some – but not all – of its funds that its former treasurer Kinde Durkee recently pled guilty to embezzling.

The Committee may accept replacements only from persons whose original attempted contributions were never cashed or deposited into any account. Such attempted contributions would not count against the contributor’s per-election limits to the Committee. Contributions that were deposited in one of the Committee’s accounts, cashed, or otherwise used by the Committee count against the per-election limits and must be aggregated with other contributions from the same contributor.

Background

The Committee alleges that it lost millions of dollars in an embezzlement scheme carried out by Ms. Durkee, who  was treasurer for the Committee until her arrest in September 2011. Federal documents state that Ms. Durkee commingled the funds of various political committees and organizations and made repeated unauthorized transfers between accounts on which she had signing authority.

The Committee states Ms. Durkee developed a practice of receiving funds into the Committee’s accounts before transferring them to her own accounts. The Committee also states that some of its funds may have been deposited into non-Committee accounts and some may never have been deposited into any account.

The Committee asked the Commission whether it can accept replacement contributions from contributors whose funds were embezzled or mishandled by Ms. Durkee without the contributions counting against contribution limits set forth in the Federal Election Campaign Act (the Act).

Analysis

Under the Act and Commission regulations, a person may contribute up to $2,500 per election to a federal candidate running in the 2012 election cycle. 2 USC §§ 441a(a)(1)(a), 441a(c). The campaign’s treasurer must ensure the legality of all contributions and deposit them within 10 days of receipt. 11 CFR 103.3(a) and (b).

To the extent that Ms. Durkee failed to cash or deposit a contribution into any account, the Committee may accept a replacement contribution from the contributor. Since the initial funds were never received by the Committee, they would not count against the Act’s contribution limits. This approach is consistent with Commission precedents involving lost contribution checks. See AO 1999-23 (Arkansas Bankers PAC) (committee never received contribution check mailed to it); AO 1992-42 (Lewis) (committee received ten contribution checks, which it attempted to deposit by mailing to its bank, the deposit never arrived at the bank, and the checks were never negotiated).  

The Committee may not seek to replace contributions that the Committee, through its treasurer Ms. Durkee, received and deposited in one of the Committee’s accounts, cashed, or otherwise used. Both the original contribution and any additional contributions would count against the contributor’s per-election limit to the Committee.

The Commission has never applied the same reasoning to contributions that were actually deposited in the intended recipient committee’s account as it has to circumstances where a committee lost a contribution check. See AO 1992-42 (Lewis) (distinguishing contributions that have been deposited into a bank account and subsequently embezzled from those that have not yet been deposited); AO 1993-05 (Fields) (same). To do so would be beyond the Commission’s statutory and regulatory authority. See 2 USC § 441a(f); 11 CFR 102.8(a). Accordingly, any additional contribution that the Committee accepts from a donor whose contribution was deposited in one of the Committee’s accounts and accepted by the Committee must be aggregated with the contributor’s earlier contribution.

The Commission could not approve a response by the required four affirmative votes as to whether the Committee could accept replacement contributions for funds deposited into an account other than one of the Committee’s accounts. 

Date issued: May 15, 2012; Length: 7 pages.

Resources:

• Advisory opinion 2012-07 [PDF; 7 pages]
• Commission discussion of AOR 2012-07