Executive Describes Padding PR Bills

A former Fleishman-Hillard vice president testified Tuesday that she padded the public relations firm’s bills to the Los Angeles Department of Water and Power by as much as $50,000 a month.

Monique Moret, who is testifying under a promise of immunity from prosecution, told jurors that she acted at the direction of her boss, John Stodder, who told her that the orders came from Douglas Dowie, the Los Angeles office’s general manager.

Why? Assistant U.S. Atty. Adam Kamenstein asked Moret.

“We hadn’t met our projections,” she said. “We needed to bump up our hours.”

Stodder and Dowie are on trial in downtown Los Angeles on federal conspiracy and wire fraud charges. They are accused of bilking more than $325,000 from the DWP and other clients between 2000 and 2004. Dowie, in a separate civil filing, has asserted that he is a scapegoat for campaign money-laundering by Fleishman-Hillard.

Moret managed the $3-million DWP account, she told jurors. For more than four hours, she walked jurors through draft billing statements and e-mails, detailing how she worked her way up to the overbilling.

She said she began by billing the agency two hours for one-hour meetings, and doubling the amount of time spent on such projects as preparing briefing books or planning media events. Later, she said, she would add thousands of dollars to an employee’s billing and then concoct an explanation for it.

Dowie’s attorney, Thomas Holliday, last week blamed “rogue” employees like Moret for the overbilling. Stodder’s attorney, Jan Handzlik, said Stodder “believed in good faith ... that the hours were worked.”

In October 2003, Fred Muir, a senior vice president and former Times reporter, quit in protest of the fraudulent billing scheme, and Moret testified that she “freaked out,” fearing a criminal investigation.

Dowie, she said, called a meeting and sarcastically asked her, Stodder and another manager about Muir’s allegations. Stodder, she said, told Dowie, yes, they had been overbilling the DWP. Yet he never ordered them to stop.

Instead, he asked if Muir “had any evidence of this,” Moret testified. They answered no.

Dowie also wanted to know who else was involved. When he learned that Moret’s secretary helped change the bills, Dowie said that was like having an assistant plan “your night out with your mistress in a hotel,” she testified.

The Times and a local television station began investigating Fleishman-Hillard’s DWP contract and the firm’s ties to then-Mayor James K. Hahn, she said. There also was a government audit and an internal investigation.

Stodder, she said, assured her that she “would not take the fall.”

About the same time, she said, Dowie told her that a separate state and federal “pay to play” investigation into accusations that local politicians traded city contracts for campaign contributions would end quietly without any indictments. But, he said, the overbilling charges could result in criminal prosecution and jail time for those responsible.

Dowie, she said, told her that he had nothing to do with the billing records and knew nothing about it.

“I felt like he was trying to distance himself and wipe his hands clean of it,” Moret testified.

She quit in June 2004 and began cooperating with government prosecutors.

“I really wanted to tell the truth,” she said.