L.A. Expands Lawsuit Against PR Company

Los Angeles City Atty. Rocky Delgadillo on Monday expanded a civil lawsuit against Fleishman-Hillard, alleging that the international public relations firm and the former head of its Los Angeles office systematically defrauded three city departments by padding monthly bills.

Los Angeles originally filed a lawsuit against the company and unnamed employees on July 16, alleging Fleishman-Hillard defrauded the city under a $3-million-a-year contract it had with the Department of Water and Power.

The lawsuit was filed days after The Times reported that former Fleishman employees said they were encouraged to submit falsified timesheets overstating hours spent on the DWP account.

Monday’s action amended the lawsuit to name Douglas Dowie, the former general manager of the Los Angeles office, as a defendant, and added a $500,000 contract with the city’s Airport Department and a $200,000-a-year contract with the city’s Harbor Department.

Over the last seven years, Fleishman has billed the city for more than $20 million.

Fleishman employees contend that Dowie instructed workers “to bill for work that was not completed or undertaken, and to add a certain dollar amount each month to Plaintiffs account,” the lawsuit said.

Among the fraudulent practices, according to the lawsuit: padded hours, double charges and claims for work that wasn’t done.

“We are alleging that not only Fleishman should be responsible, but Doug Dowie should be responsible,” said Delgadillo spokeswoman Katie Buckland. “We are alleging that there is fraud throughout all of the contracts that are listed.”

Until Monday’s amendment, the city had faced a deadline this week to serve the lawsuit on Fleishman, which would, in turn, have started the clock ticking for the city to prove its claims.

Now, the city has another 60 days to serve the company.

But Buckland said that the intent of amending the complaint “was not to buy time.”

“We have conducted investigations into their billing practices,” she said. “Anything that is alleged, we feel very certain we can prove in court.”

The lawsuit also seeks punitive damages.

Richard Kline, who replaced Dowie in April as head of Fleishman-Hillard’s Los Angeles office, said his firm continues to cooperate with the investigation.

“The amendment to the action is really not a surprise because these are subjects we’ve been discussing for a month,” Kline said.

“We are cooperating fully with the authorities and providing them with any information they need.”

He said the expanded lawsuit does not affect the scope of the firm’s own internal investigation.

Dowie was placed on leave shortly after The Times reported that Fleishman employees were strongly encouraged to inflate their DWP billings.

In addition to the city lawsuit, Los Angeles County Dist. Atty. Steve Cooley began a criminal investigation.