Hahn’s Image Problem

At least ratepayers now know how the Los Angeles Department of Water and Power -- a public monopoly that doesn’t need to market itself -- came to spend $3 million a year on an outside public relations firm. It turns out that PR giant Fleishman-Hillard only billed the DWP. Much of the work it did was for Mayor James K. Hahn.

A Times review of thousands of pages of invoices and e-mails revealed that Fleishman charged the DWP $400,000 in 2002 and 2003 for boosting Hahn’s image via news conferences, speeches and press releases.

Some of these events only tangentially involved the utility, and all were designed to showcase the mayor. Fleishman charged the DWP $160,000 for organizing the mayor’s highly publicized 2002 trip to Asia, for instance. It organized a news conference, at a cost of $55,000, for Hahn to promote wind turbines and win kudos from environmentalists. Employees of the firm’s Los Angeles office met with the mayor’s deputies and drew up a three-page memo outlining “media opportunities” for Hahn. The cost to DWP for the two-hour meeting: $2,300.

It gets worse. In addition to the well-documented work done on Hahn’s behalf, Fleishman overcharged the DWP by $4.2 million over the last five years, according to an audit released last week by City Controller Laura Chick. That’s consistent with a Times story in July in which former Fleishman employees claimed to have padded time sheets or “made stuff up” under pressure from executives in the international firm’s Los Angeles office. (In its own bizarre defense, the firm disputes Chick’s numbers, saying it has been unable to find supporting documentation for a mere $652,457 in billings.)

Federal and county grand juries subpoenaed Fleishman records last spring as part of an ongoing investigation into contracting practices at City Hall. Los Angeles residents don’t have to wait for a criminal investigation to reach a conclusion about the appropriateness of billing the DWP for work done on behalf of the mayor’s office, which, like the public utility, has its own in-house PR staff.

Fleishman-Hillard and its employees have donated generously to Hahn’s political campaigns, including $15,000 to the mayor’s 2002 anti-Valley-secession drive. In addition to what it billed the DWP, the firm provided “free” public relations advice to Hahn’s office worth tens of thousands of dollars, according to city records. That’s a bargain compared with all the business the city gave the public relations firm.

This is far from the first time that Hahn’s biggest political donors have ended up with lucrative city contracts. Aside from whether the multiple investigations underway turn up evidence of a criminal quid pro quo, the pattern revealed by audits and public records simply looks bad. And not even the best PR firm can make it look better.