PR Firm Gets Final Notice on Bills

Nearly 10 months after freezing payment on $533,000 in bills from Fleishman-Hillard, Los Angeles’ city controller warned the public relations firm Tuesday that she would ask the City Council to reject the invoices unless the company justified the costs within 10 days.

Controller Laura Chick notified the company in March that she would withhold payment on bills for October, November and December 2003 until she received more documentation.

“To date, I have not received a response from your firm,” Chick wrote, threatening to recommend nonpayment unless she got “an appropriate response” from Fleishman-Hillard by Jan. 28.

Chick said she wanted to resolve the outstanding bills for work done for the Department of Water and Power. “If they don’t respond, to me it’s a validation that they can’t explain what they billed us for,” she said.

It appeared unlikely Tuesday that Fleishman-Hillard would comply with Chick’s request by the deadline.

A spokesman for the firm said the dispute moved to the courts after the city filed a lawsuit seeking repayment for bills that it had questioned. “Fleishman-Hillard provided communication services in support of the Department of Water and Power for which we were not and have not been reimbursed,” said Richard Kline, regional president and senior partner of the firm.

Kline said the firm is focused on responding to the city lawsuit.

“We met with the controller and her staff last summer and made it clear we would pursue compensation for those unpaid services in connection with the pending litigation, which was filed by the city,” he said. “It’s now a matter for the legal system. We remain interested in reaching a fair and timely financial settlement with the city, but we are prepared to resolve the matter in trial.”

Attorneys for the city and Fleishman are scheduled to appear in Los Angeles Superior Court this morning to discuss a motion by the company to change the venue of the lawsuit to Ventura County.

Council members, including Dennis Zine, said Tuesday that they were prepared to reject payment without further documentation, especially because the $533,000 was part of $4.2 million in billings over five years that Chick identified as questionable in a November audit.

The controller conducted the audit after refusing to pay the three months of billings, arguing that the invoices did not sufficiently spell out what services were authorized under the contract and that they included billings for $50 to $100 for quarter-hour periods in which Fleishman-Hillard employees said they had left phone messages or sent e-mails.

“If Fleishman feels they are justified, they need to explain them,” said council President Alex Padilla. “If they don’t, they are not going to be seen in a favorable light by the council.”

Mayor James K. Hahn is also taking a hard line, said Deputy Mayor Doane Liu. “No invoice should be paid unless it can be proved that the work was appropriate and was completed,” he said.

In response to Chick’s audit, Kline said in November that the company’s own internal probe found $652,457 in unsubstantiated billings over five years.

Zine said Tuesday that Fleishman-Hillard executives had been making the rounds of council offices to “mend fences,” and that he had told them they should immediately pay the $652,457 to show good faith.

“I said what they need to do is pay the dollars not in dispute,” the councilman said. “Then, if there are dollars in dispute, let’s resolve that issue through negotiations. They were going to consider it.”

In the meantime, Zine said, “I think it’s appropriate that we withhold all payments.”