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Talk about adding insult to injury. The campaigns for several Democratic lawmakers reeling from the arrest of their campaign treasurer face the prospect of financial penalties themselves.

Federal prosecutors earlier this month accused Kinde Durkee of siphoning nearly $700,000 from a California assemblyman. She told authorities she had been misappropriating money from her many Democratic clients for years.

Her client list has several hundred names on it, including the California campaigns of Sen. Dianne Feinstein and U.S. Reps. Susan Davis, Loretta Sanchez, and Laura Richardson.

The candidates believe they are victims of embezzlement and fear that their campaigns could be out a substantial sum of money.

But the thefts also could mean they violated federal law by failing to accurately disclose disbursements and cash-on-hand balances.

The Federal Election Commission's regulations essentially require more than one person to run the finances for political campaigns. For example, two people should sign checks for $1,000 or more. Also, someone other than the person who signs the campaign committee's checks should review bank statements each month for unauthorized transactions. If the campaigns allowed Durkee too much free rein, they could face sanctions.

"The underlying issue is: Were there systems in place to prevent this from happening or was this essentially an accident waiting to happen?" said Kenneth Gross, a Washington-based attorney who advises candidates on campaign law compliance. "No one assumes they hire a crook, but it's a good idea to have procedures in case someone is tempted by having just one person with their hands on the control."

It happened before. In June 2010, the FEC fined the National Republican Congressional Committee $10,000 after the committee's treasurer had transferred hundreds of thousands of dollars from the NRCC to other accounts for his personal use. The treasurer, Christopher J. Ward, later pleaded guilty to embezzling nearly $850,000 from the NRCC and was sentenced to three years in prison.

The NRCC was a victim in every respect, but it also failed to accurately disclose activity to the FEC.

The FEC's regulations would be standard protocol in the corporate world, Gross said. The FEC designed the regulations to protect donors by encouraging good accounting practices. If the campaign committees follow those procedures, then they would not be subject to a fine for filing incorrect reports.

It's not clear exactly who has lost money or how much in the Durkee case. The bank maintaining the candidates' campaign accounts won't release detailed information unless the campaigns sign releases freeing the bank from legal liability.

Feinstein's campaign estimates that she lost millions of dollars, according to a lawsuit filed Friday against First California Bank.

Bill Carrick, a longtime adviser to Feinstein, said the potential for FEC sanctions was among the least of his concerns right now.

"What we're focused on is that we have a bank that won't tell us how much money we've got in the bank and won't allow us access to our bank accounts." Carrick said.

Carrick said Feinstein's campaigns had used Durkee's accounting services since 1992 and there had never been an indication that the firm needed to beef-up its accounting processes.

"She had a big shop. She had 14 people there. We had relationships during each of the campaigns with account executives who responded to almost daily inquiries about our accounting and fundraising processes," Carrick said.

In the end, Carrick said it may turn out that the only similarities between the Durkee case and what happened with the Republican congressional committee was the issue of embezzlement. He believes that the Durkee case is far more complicated and that the FEC would take that into consideration when reviewing the inaccuracies in the various campaign disclosure reports.

"I don't think anybody has any idea about what the magnitude of this scheme was," Carrick said. "I think they're going to look at it and say this is unique."

The FEC would look into the case if it received a complaint of wrongdoing or if it received a referral from within the agency or from another government agency. The FEC also gives campaign committees an incentive to report violations by offering fines that are between 25 percent and 75 percent lower than they could otherwise expect.

The FEC has three Republican and three Democratic commissioners, frequently leading to deadlocked votes on enforcement actions recommended by the staff.

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