REICH, ADELL & CVITAN 

A PROFESSIONAL LAW CORPORATION 

3550 WILSHIRE BOULEVARD, SUITE 2000 

LOS ANGELES, CALIFORNIA 90010 

TEL: (213) 386-3860 • FAX: (213) 386-5583 

www.rac-law.com 

HIRSCH ADELL 

ALEXANDER B. CVITAN 

MARIANNE REINHOLD 

LAURENCE S. ZAKSON 

CARLOS R. PEREZ 

NEELAM CHANDNA 

OF COUNSEL 

GEORGE A. PAPPY 

J. DAVID SACKMAN 

MARSHA M.HAMASAKI 

PETERA. HUTCHINSON 

WILLIAM Y.SHEH 

NATALIA BAUTISTA 

KENTMORIZAWA 

AARON G. LAWRENCE 

ANGELA SERRANZANA 

ALLAN D. SHULDINER 

JULIUS MEL REICH 

(1933 - 2000) 

May 17,2011 

Via Email and Ovemight Mail 

jstoltz@fec.gov 

Federal Election Commission 

Audit Division 

Attn: Joseph F. Stoltz, Assistant Staff Director 

999 E Street, NW 

Washington, DC 20463 

Re: Response to Interim Audit Report of the Audit Division on the 

Los Angeles Countv Democratic Central Conunittee 

Dear Mr. Stoltz: 

As you know, I am General Counsel to the Los Angeles County Democratic Central 

Conimittee (Committee). 

By this letter, the Committee responds to the inquiries contained in the Interim Audit 

Report (Report) prepared by the Audit Division of the Federal Election Commission (FEC) 

conceming whether a $7,700 transaction from the Committee's accounting firm and credit card 

processor, Durkee & Associates, LLC\ to the Committee was "an advance or an extension of 

credit outside the ordinary course of business" and, as such, a "contribution and either an 

excessive contribution of $2,700 ($7,700 less the allowable contribution limit of $5,000) or a 

prohibited contribution of $7,700, depending upon whether Durkee & Associates, as a limited 

liability company, elected to be treated as a partnership or a corporation for tax purposes." The 

Audit Division has specifically requested the following information: 

1. The specific terms that Durkee & Associates apply to such extension of credit; 

2. 'Whether similar terms are offered to nonpolitical customers of similar size and risk of 

obligation: 

3. Rationale for why Durkee & Associates chose the time it did to negotiate LACDCC's 

checks representing repayment; 

4. Information about Durkee & Associates' tax status; and 

5. Any other information LACDCC believes might clarify the transactions. 

' Durkee & Associates, LLC is operated by the Committee's treasurer, Kinde Durkee. 
Joseph F. Stoltz, Assistant Staff Director 

May 17,2011 

Page 2 

1. Specific Terms Durkee & Associates Applv To Such Extensions Of Credit 

Durkee & Associates had a clerk whose responsibility it was to review credit card 

contribution transactions and, if the credit card contribution transactions were approved by the 

contributor's credit card company, but payment had not been received within a reasonable period 

of time (which varied based on experience with that particular credit card company), Durkee & 

Associates would transfer the fimds to the client and repay itself once the payment was received 

from the credit card company. 

Durkee & Associates charged its clients a fee of about 3% per credit card transaction for 

processing credit card contributions, which fee was in addition to tiie fee charged by the credit 

card company. Durkee & Associates considered the above-described advance to its clients as 

one of the client benefits encompassed by its 3% credit card transaction fee. According to 

Durkee & Associates, since these delays by the credit card company in forwarding fimds were 

unusual, and payments were normally received in a relatively short period of time (on average 

about two weeks or less, depending on the particular credit card company), the cost of this 

benefit was minimal in comparison to the fee received. 

2. Whether Similar Terms Are Offered To Nonpolitical Customers 

Yes, similar terms are offered to nonpolitical customers of similar size and risk of 

obligations; and a list of these nonpolitical customers and amounts advanced, for a representative 

period of March 27,2001 to April 13,2011, is attached. 

3. Rationale For Why Durkee & Associates Chose The Time It Did To Negotiate 

LACDCC's Checks 

The repayments totaling $7,700 occurred on February 17,2009, because Durkee & 

Associates was waiting for the credit card company or companies to credit the remaining credit 

card proceeds in question to the Committee, llie last batch of the credit card proceeds in 

question were deposited from February 2 through February 9,2009. Attached is a copy of the 

Committee's bank account statement for February 2009, and the credit card deposits in question 

have an asterisk (*) next to each transaction. 

Durkee & Associates repaid itself on Febmary 17,2009 shortly after these deposits were 

received from the credit card company or companies. 

4. Information About Durkee & Associates' Tax Status 

Durkee & Associates is a single-principal limited liability company, the sole owner of 

which is Kinde Durkee. The income of Durkee & Associates is reported on a Schedule C to the 

individual tax retum of Kinde Durkee and her husband. 
Joseph F. Stoltz, Assistant Staff Director 

May 17,2011 

Page 3 

5. Anv Other Information LACDCC Believes Might Clarify The Transactions 

Attached is a Declaration of Kinde Durkee further detailing these transactions, which the 

Committee incorporates herein by reference. 

The Committee further notes that the Committee's management became aware of tiiiese 

transactions solely as a result of the FEC audit. 

In addition to the foregoing response, the Committee is concurrently filing amended 

reports with the FEC to correct the misstatements identified in the Report. 

Laurence S. Zakson 

of REICH, ADELL & CVITAN 

LSZ/ws 

Enclosures 

cc: Eric Bauman, Chair 

Adam Seiden, Executive Director 

Kinde Durkee, Treasurer 

Bill Antosz, FEC Audit Division (bantosz@fec.gov) 

Tom Hintermister, FEC Audit Division (thinteimister@fec.gov) 

189364.1 
DURKEE & ASSOCIATES CLIENT ADVANCES 

3/27 m #1244 Martinez & Associates $2,500.00 

2/26/02 •#2115 Targeted Communications $3,600.00 

4/3/02 #10039 Foodworks $3,000.00 

4/16/02 #11006 Martinez & Associates $3,350.00 

6/1/02 #2460 Buchert Development $1,600.00 

6/20/02 #10062 SCOPE, Inc $ 850.00 

1/6/03 #10164 Frances Kidd & Co $5,000.00 

2/6/03 #10211 Buchert Development $ 300.00 

2/18/03 #10273 Buchert Development $ 300.00 

3/10/03 #10345 Hadler Public Relations $ 240.00 

4/25/03 #10553 Buchert Development $ 700.00 

5/6/03 #10591 Targeted Communications $1,400.00 

8/22/03 #11063 Targeted Communications $1,000.00 

6/15/04 #12474 Renee Hatchwell Company $ 500.00 

7/2/04 #12513 No Limits Theatre $ 500.00 

3/14/05 #13714 Center for Civic Participation $8,000.00 

10/01/04 #12980 Plaza De Cultura $5,372.06 

6/24/05 #13990 Center for Civic Participation $2,100.00 

4/7/06 #15400 Integrity Partners $2,800.00 

5/30/06 #15676 Native American Caucus 

Outreach 

$ 20.00 

9/29/06 #16351 Center for Civic Participation $9,900.00 
10/9/07 #18090 Lantern Hill $ 100.00 

11/16/07 #18274 Americans for Democracy $ 277.00 

11/17/07 #18280 Labor Day LA Foundation $ 600.00 

4/9/08 #18887 National Popular Vote $ 400.00 

10/16/08 #19777 Targeted Communications $15,000.00 

12/11/08 #20062 Modeonemedia $1,209.75 

2/5/09 #50289 Targeted Communications $1,600.00 

2/9/09 #50314 Targeted Communications $1,000.00 

2/10/09 #50326 Targeted Communications $ 100.00 

4/21/09 #50824 National Popular Vote $7,000.00 

6/3/09 #51131 Buchert Development $1,000.00 

7/6/09 #51362 Lantern Hill $1,300.00 

7/16/09 #51418 Targeted Communications $5,400.00 

8/10/09 #51573 Lantern Hill $1,000.00 

11/05/09 #52053 Shallman Communications $1,100.00 

12/23/09 #52346 Native Campaigns Outreach $ 250.00 

12/29/09 #52366 Native Campaigns Outreach $ 200.00 

12/30/09 #52384 Native Campaigns Outreach $ 250.00 

12/31/09 #52398 Native Campaigns Outreach $ 250.00 

5/10/10 #53096 QF7 Media $ 300.00 

12/20/10 #55070 EMA $ 780.00 

2/10/11 #55363 Lantern Hill $ 700.00 

2/14/11 #55385 Lantern Hill $ 300.00 
4/13/11 #55666 Lantern Hill $1,600.00 
FIRST 

CALIFORNIA 

BANK 

P.O. BOX 5112 

WESTLAKE VILLAGE, CA 91359-S11S 

1-000-856-7eDS 

LOS ANGELES COUNTY DEMOCRATIC 

CENTRAL COMMITTEE (FEDERAL ACCOUNT) 

1212 S VICTORY BLVD 

BURBANK CA 91502-2551 

PAGE 

PLATINUM INTEREST CHEOaNG 

61 

PREVIOUS BALANCE 

31 DEPOSITS/CREDITS 

56 CHEOCS/WITHDRAWALS 

ENDING BALANCE 

TOTAL SRV CK6 TODAY 

ACCOUNT NO 

STATEMENT DATE 

LAST STATEMENT DATE 

STATEMENT PERIOD 

# OF DAYS-STMT PERIOD 

AVERAGE BALANCE 

YTD INTEREST 

101.50-

42,838.81 

33'040.65 

9 696.66 

0.00 

INTEREST PERIOD 

AVERAGE BALANCE ' 

INT EARNED THIS STWr 

ANNUAL PERCENTAGE YIELD EARNED 

4,182.99 

0.68 „ 

0,21 % 

DEPOSITS 

DATE 

02/02/09 

02/02/09 

02/02/09 

02/02/09 

02/02/09 

02/02/09 

02/02/09 

02/02/09 

02/04/09 

02/04/09 

02/05/09 

02/09/09 

02/09/09 

02/11/09 

02/13/09 

02/13/09 

02/18/09 

02/18/09 

02/18/09 

02/18/09 

02/18/09 

02/23/09 

02/23/09 

02/23/09 

02/23/09 

02/23/09 

02/25/09 

02/25/09 

FPiC 

DESCRIPTION 

DEPOSIT 

DEPOSIT 

DEPOSIT 

DEPOSIT 

DEPOSIT 

DEPOSIT 

DEPOSIT 

DEPOSIT 

DEPOSIT 

DEPOSIT 

DEPOSIT 

DEPOSIT 

DEPOSIT 

DEPOSIT 

DEPOSIT 

DEPOSIT 

DEPOSIT 

DEPOSIT 

DEPOSIT 

DEPOSIT 

DEPOSIT 

DEPOSIT 

DEPOSIT 

DEPOSIT 

DEPOSIT 

DEPOSIT . 

DEPOSIT 

DEPOSIT 

1523414 

02/27/2009 

01/30/2009 

28 

4,182.99 

2.13 

AMOUNT 

87.3( 

174.7L 

262.OOJ 

87.3U 

47.40 ^ 

. 42.6S>f 

68.20 

33.02 

3,805.00 

874.0Q9f 

i,ooo.og , 

212.9S;^ 

118.4SH 

2,000.00 

5 OOO.OD 

10,821.91 

108.00 

8,939.03 

100.OQ 

50.00 

1,000.00 

36.00 

36.00 

46.00 

100.00 

100.00 

75.00 

72.00 

SEE REVERSE FOR IMPORTANT INFORMATION 
1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

I896S2.I 

DECLARATION OF KINDE DURKEE 

I, Kinde Durkee, declare as follows: 

1. ridentification1 I am the treasurer for the Los Angeles 

County Democratic Central Committee (Committee). I operate a 

booklceeping and professional treasurer firm, Durkee & Associates, 

LLCr which handles the Committee's accounting, recordkeeping, and 

reporting. Durkee & Associates, LLC also acts as the Committee's 

credit card processor. 

2. rDurkee & Associates. LLCI Durkee & Associates, LLC is a 

single-principal limited liabilit y company, of which I am the sole 

owner. Each year since the limited liabilit y company was formed, 

the income of Durkee & Associates, LLC has been reported on a 

Schedule C to the individual tax return file d by my husband and I. 

3. rcredit Card Deposits and Advancesi Durkee & Associates, 

LLC had a clerk whose responsibility i t was to review credit card 

contribution transactions (for both political and nonpolitical 

clients) and, i f the credit card contribution transactions were 

approved by the contributor's credit card company, but payment had 

not been received within a reasonable period of time (which varied 

based on experience with that particular credit card company), 

Durkee & Associates, LLC would transfer the funds to the client and 

repay itself once the payment was received from the credit card 

company. 

Durkee & Associates, LLC charged its clients a fee of about 

3% per credit card transaction for processing credit card 

contributions, which fee was in addition to the fee charged by the 

credit card company, Durkee & Associates, LLC considered the 
2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

I896n.i 

above-described advance to its clients as one of the client 

benefits encompassed by its 3% credit card transaction fee. Since 

these delays by the credit card company in forwarding funds were 

unusual, and payments were normally received in a relatively short 

period of time (on average about two weeks or less, depending on 

the particular credit card company), the cost of this benefit was 

minimal in comparison to the fee received. 

The above-described transaction is for al l clients of Durkee 

& Associates, LLC, regardless of whether they are political or 

nonpolitical clients, so long as they have paid the 3% credit card 

transaction fee. Attached is a lis t of my nonpolitical clients for 

which I process credit card transactions and which have availed 

themselves of the credit card advance benefit described herein. 

4. FReauest for Checks from Bank! On May 10, 2011, I 

requested from my bank a copy of al l the checks relating to the 

transactions identified in the attached lis t of nonpolitical 

customers for which Durkee & Associates has advanced funds for 

credit card transactions which were unreasonably delayed by the 

credit card companies. I will provide to the Federal Election 

Commission a copy of these checks as soon as I receive them from 

the bank. 

Executed this / 7 day of May, 2011, at Burbank, California. 

I declare under penalty of perjury under the laws of the United 

States of America that the foregoing is true and correct. 

^ jeinde Durker 
REICH , ADEL L 8c CVITAN 

A PROFESSIONAL LAW CORPORATION 

3550 WILSHIRE BOULEVARD, SUITE 2000 

LOS ANGELES, CALIFORNIA 90010 

TEL: (213) 386-3860 • FAX: (213) 386-5583 

www.rac-law.com 

HIRSCH AOELL 

ALEXANDER B. CVITAN 

MARIANNE REINHOLD 

LAURENCE S.ZAI«ON 

CARLOS R. PEREZ 

NEELAM CHANDNA 

OF COUNSEL 

GEORGE A. PAPPY 

J. DAVID SACKMAN 

MARSHA M.HAMASAKI 

PETER A. HUTCHINSON 

WiaiAM Y.SHEH 

NATALIA BAUTISTA 

KENTMORIZAWA 

AARON 6. LAWRENCE 

ANGELA SERRANZANA 

ALLAN D. SHULDINER 

JULIUS MEL REICH 

(1833-2000) 

May 19,2011 

Via Email 

jstoltz@fec.gov 

Federal Election Commission 

Audit Division 

Attn: Joseph F. Stoltz, Assistant Staff Director 

999 E Street, NW 

Washington, DC 20463 

Re; Response to Interim Audit Report of the Audit Division on the 

Los Angeles Countv Democratic Central Committee 

Dear Mr. Stoltz: 

This letter supplements my letter to you dated May 17,2011, which responded to the 

questions posed by the Audit Division in the Interim Audit Report (Interim Report). 

The puipose of this letter is to make sure that it is clear that the extraordinary step of 

withdrawing $60,000 fiom the Committee's federal and Levin accounts ($15,000 fiom the 

federal account and $45,000 fiom the Levin account) was undertaken by the Committee's 

treasurer because of her own internal operational needs—specifically, her apparent need to 

undertake a manual review of credit card transfers from a multi-client credit card merchant 

account she operated on a for-profit basis—^and was undertaken without authorization from, or 

the knowledge of, the Committee's other officers. It is also to make clear that the $60,000 

backed out of the account in December 2008 consisted not just of funds recentiy deposited, but 

of fiinds deposited over the course of the entirety of 2008. In this regard, the reconciliation 

report of Durkee and Associates for the Committee's credit card contributions at issue is 

attached. The reconciliation report identifies credit card contributions totaling $61,428.85 which 

were collected and transmitted to the Committee on various dates between January 9,2008 and 

December 16,2008. 

As the foregoing demonstrates, the Interim Report should contain no implication that 

somehow the Committee had a shortfall in its federal account which necessitated a transfer of 

fimds from the Committee's nonfederal account. Consequentiy, there should be a qualification 

of the Interim Report's notations that "between December 5 and December 22,2008, LACDCC 

did not have $45,000 in its federal bank account" and without a separate deposit of $15,000 on 

December 31,2008 to the Committee's federal account fiom its nonfederal account, 
Joseph F. Stoltz, Assistant Staff Director 

May 19,2011 

Page 2 

"LACDCC's federal bank account would have had a negative balance of $7,044 on December 

31,2008" to eliminate any such implication. 

ST Laurence^S. Zakson 

of REICH, ADELL & CVITAN 

LSZ/ws:caw 

Enclosure 

cc: Eric Bauman, Chair 

Adam Seiden, Executive Director 

Kinde Durkee, Treasurer 

Bill Antosz, FEC Audit Division (bantosz@fec.gov) 

Tom Hintermister, FEC Audit Division (thintermister@fec.gov) 

188824.1 
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