SACRAMENTO — Attorneys for Democratic candidates and committees trying to recover from an alleged embezzlement scheme appealed Friday to California’s political watchdog agency to relax financial reporting rules temporarily and waive some contribution limits.

The attorneys appeared before a meeting of the Fair Political Practices Commission in Sacramento as it considered options for candidates whose campaign accounts evaporated in the scandal involving longtime Democratic treasurer Kinde Durkee. Her alleged victims include Santa Monica City Councilman Terry O’Day.

Durkee is charged with mail fraud and accused by federal prosecutors of siphoning $700,000 from the account of state Assemblyman Jose Solorio and targeting others, including U.S. Sen. Dianne Feinstein, who estimates she may be missing as much as $5 million.

Investigators are trying to sort out who lost how much after entrusting their funds to Durkee & Associates.

Solorio’s attorney, Karen Getman, said the bank Durkee used, First California Bank, will not provide statements so candidates can determine whether they have any money left. She said it could be months before candidates even know where there money went, and it would be unfair to penalize them for an extraordinary situation.

“Contributions weren’t contributions, expenditures weren’t expenditures. It was all just bank transactions conducted by Kinde Durkee,” said Getman, a former chairwoman of the FPPC.

She said candidates are also being victimized by the bank, which has refused to help the alleged victims obtain any documents.

The bank’s chief marketing officer, Diane Dickerson, did not immediately respond to phone messages left Friday.

Durkee controlled as many as 400 accounts, including some for nonprofits. A criminal complaint says she acknowledged misappropriating her clients’ money for years, using the funds to pay her credit cards, a mortgage, business bills and her mother’s care at an assisted-living facility.

She then shifted money from other candidates’ accounts to cover up the wrongdoing, federal prosecutors allege.

Durkee has not yet entered a plea and is due to appear in court Oct. 19. Her attorney, Daniel Nixon, did not return calls seeking comment.

The embezzlement case came as many candidates head into difficult, potentially expensive campaigns in an unpredictable election year.

Candidates for state and congressional offices face newly redrawn political maps that could lead to tougher contests for many incumbents and possibly more competitive seats.

Stephen Kaufman, an attorney representing the Los Angeles County Democratic Party and several other Durkee clients, urged the FPPC to devise a clear process for candidates and committees who may not be able to recreate missing financial statements as the case winds through court — which could take years. He said contribution limits should also be waived if candidates can show they didn’t ever receive the funds.

“There are obvious examples where money was received and a deposit was never put into their bank accounts,” Kaufman said. “Where it went, I frankly don’t know.”

Commission Chairwoman Ann Ravel said the agency would not take enforcement action, or issue penalties, for any legitimate victims who are unable to file complete reports due to the case. The next statewide filing deadline is Jan. 31, although federal candidates whose campaigns are regulated by the Federal Election Commission must file quarterly reports in about two weeks.

In California, Ravel said the FPPC is researching myriad legal issues, including guidance for candidates on opening duplicate bank accounts, whether they can use legal defense funds to pay expenses in the case and whether contribution limits can be raised temporarily to make up for missing funds.

She said the commission has discretion to interpret state law on many of those issues, but could also determine that legislative action is necessary. The state Legislature is not scheduled to reconvene until January.

The commission will hold another meeting in Los Angeles next month and could offer guidance after that, Ravel said.

Feinstein is one of several members of Congress whose campaign accounts are in limbo. Reps. Susan Davis and Loretta Sanchez also said they believe hundreds of thousands of dollars are missing.

In an audit released this week, the FEC found repeated problems with deposits Durkee’s Burbank firm, Durkee & Associates, made on behalf of the Democratic Party of Orange County’s federal political action committee from 2007 through 2008.

It found that the group failed to deposit 58 percent of the contributions received in the 2008 election cycle within 10 days of receipt, as required by law. The money was deposited, on average, 41 days late, the audit said.

Durkee’s firm blamed the delays on bank errors and a new check-scanning system that led to “many discrepancies and processing malfunctions which we were not prepared to handle,” according to the audit. The FEC did not issue a fine or penalty.

Many candidates and committees do not even know how much money they have remaining and cannot spend any of it, since all of their accounts have been frozen.

The state commission spotted the alleged fraud during a 2009 audit and notified the FBI, said Gary Winuk, chief of the FPPC’s enforcement division.

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