PR Firm Billing Inquiry Expands

A week after the city of Los Angeles sued public relations giant Fleishman-Hillard for overcharging the Department of Water and Power, city officials began investigating the firm’s work for the city’s port and airports.

City Atty. Rocky Delgadillo and City Controller Laura Chick on Thursday wrote a joint letter to officials at the airport and port agencies asking them to retain billing and other records of the firm’s work, according to city government sources.

Delgadillo and Chick, who are assisting Dist. Atty. Steve Cooley in a criminal investigation into Fleishman’s billing at the DWP, also asked that employees at the agencies be made available to speak with investigators.

Fleishman has come under heightened scrutiny since The Times reported last week that employees of the firm were encouraged to inflate the hours they worked for the DWP.

Until this year, Fleishman had a $3-million-a-year contract with the utility to improve its image in the community.

The company also had smaller contracts to do public relations work for Los Angeles World Airports and the Port of Los Angeles.

Among other projects, it helped develop media campaigns for new flights at Ontario International Airport.

Fleishman also has done extensive pro bono work for Mayor James K. Hahn’s office.

Fleishman dropped its port and airport contracts after federal prosecutors subpoenaed documents from the company’s St. Louis headquarters in April as part of an ongoing federal probe into city contracting.

Richard Kline, a senior partner at Fleishman who now runs the company’s Los Angeles office, could not be reached for comment Thursday but has said the company would cooperate with investigations and is conducting its own probe into the allegations of false billing.

Last week, the company placed Doug Dowie, who used to head the Los Angeles office and oversaw all the public sector contracts, on indefinite paid leave.

Neither Delgadillo nor Chick would comment on their inquiries.

Cooley did not specifically ask Delgadillo and Chick for information about Fleishman’s work for the airport and port.

But Cooley spokeswoman Sandi Gibbons said the office “would be interested in any evidence of criminal wrongdoing.”

Meanwhile, in Sacramento on Thursday, a state lawmaker said that he did not have confidence in the ability of local officials to investigate the DWP’s handling of the Fleishman contract and wanted the state auditor to get involved.

“I don’t really have any faith that at the local level they are going to be able to provide an independent look at this,” said Sen. Dean Florez, a Bakersfield-area Democrat and member of the Joint Legislative Audit Committee.

Florez also said he wanted to look into the city’s practice of using ratepayer funds from the DWP to help balance the city budget. Hahn’s 2004-05 budget transfers nearly $240 million from the DWP to the city’s general fund.

Florez also said the state had a responsibility to review how the utility was spending its money.

“We have Mayor Hahn up here saying, ‘We need our local money,’ ” Florez said, referring to efforts by Hahn and other mayors to regain authority over local property taxes, which now rests with state lawmakers. “If they want our funds, we should be able to look at their finances.”

Hahn spokesman Yusef Robb said the mayor did not believe a state audit was needed.

The state auditor has authority to review state and local government agencies and in recent years has audited the Metropolitan Transportation Authority, the Metropolitan Water District of Southern California and the Los Angeles County Department of Health Services.

The audit committee, which is authorized to order state audits, is likely to consider Florez’s request Aug. 3.

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Times staff writer Jennifer Oldham contributed to this report.