Firm Billed DWP for Work Tied to Hahn
Public relations firm Fleishman-Hillard -- which has been accused of overcharging the Los Angeles Department of Water and Power by $4.2 million -- was in regular contact with Mayor James K. Hahn’s office as it was allegedly bilking the department.
City Controller Laura Chick, who issued an audit critical of Fleishman, released billing records Wednesday showing that the firm’s employees held lengthy meetings with the mayor’s deputies while the DWP was charged thousands of dollars for those consultations.
Fleishman also worked with the mayor’s office to plan news conferences that featured Hahn, the records showed.
And the firm wrote speeches and news releases for the mayor about DWP announcements and other media events, including Hahn’s much-publicized 2002 trip to Asia.
“Were they doing work for DWP and getting paid by DWP? Or were they doing work for the mayor and getting paid by DWP?” Chick asked Wednesday.
The mayor firmly rejected the suggestion that Fleishman was working for him rather than for the DWP.
“Any time you want higher visibility on an issue in the city of Los Angeles, you want to have the mayor of Los Angeles there,” he said Wednesday, defending his appearances at DWP events arranged by Fleishman.
The firm is being sued by the city attorney for alleged overbillings, and it is being investigated by local and federal prosecutors. Chick has turned her findings over to prosecutors.
Her audit examined the $24 million that Fleishman had billed the DWP since 1998.
The inquiry found $1.2 million in billings that did not comply with the contract, $1.1 million in labor costs that were not documented and $314,000 in questionable markups by subcontractors, among a number of other alleged overcharges.
The release of the audit followed a July 15 Times article in which seven former Fleishman employees said they were encouraged or directed to pad bills to the city’s utility. Some of them said the inflated billings at times totaled $30,000 a month.
On the same day the audit was released, Hahn wrote a stern letter to City Atty. Rocky Delgadillo, saying Fleishman should “face the strongest penalties possible if the allegations proved true.”
The firm has acknowledged that it cannot find documents to support $652,457 in charges over five years.
Richard Kline, who heads Fleishman’s Los Angeles office, said he was unaware of any orders from the mayor’s office to do public relations for Hahn rather than the DWP.
Billing records indicate, however, that the mayor’s office worked closely with Fleishman on multiple announcements about initiatives such as a new park in the San Fernando Valley.
And the firm billed the DWP tens of thousands of dollars for work on the mayor’s November 2002 trip to East Asia, even though most of the mayor’s public activities had no connection to the utility.
Hahn said he believed that both the city and DWP benefited from his trip, citing his efforts to persuade Asian shipping companies to use electricity rather than diesel power when their ships were docked in L.A.