Former public relations executive Douglas Dowie is scheduled to go on trial soon in federal court on charges of padding bills sent to the Los Angeles Department of Water and Power under his firm’s $3-million-a-year contract.
But in a courtroom down the hall from where he is to be tried, Dowie has gone on the offensive, accusing his former bosses at Fleishman-Hillard of firing him in order to cover up a larger scandal involving the laundering of illegal campaign contributions to Los Angeles politicians.
Fleishman-Hillard’s lawyer, Mark Beck, reacted angrily, accusing Dowie of fabricating the allegations in order to extort a monetary settlement.
Dowie, a former journalist and veteran political insider who ran the nationwide firm’s Los Angeles office, says in his wrongful termination suit that some staffers were reimbursed through special bonus checks for contributions they made to political candidates.
He claims it was done behind his back and that Fleishman-Hillard’s chairman, John Graham, might have been involved.
He also says he expressed his concerns to the company’s chief financial officer, Fred Rohlfing, who assured him the payments were legitimate.
Dowie’s civil lawyer, Michael Faber, said this week that Dowie also raised the issue with FBI agents and a federal prosecutor who interviewed him in March, four months before his indictment on 16 criminal counts. “They have apparently declined to pursue it,” Faber added.
Assistant U.S. Atty. Adam Kamenstein, who is prosecuting Dowie, would not comment on the civil suit or on Faber’s remarks.
Dowie’s claims are contained in an amended version of the wrongful termination suit filed under seal Sept. 12. It cites a deposition taken five days earlier in which Rohlfing acknowledged having had suspicions about bonus checks paid to four Fleishman-Hillard staffers based in Los Angeles.
The executive said he gave their names to attorneys from Munger, Tolles & Olson, a Los Angeles law firm hired by Fleishman-Hillard to conduct an in-house investigation last year.
Dowie was interviewed on July 30, 2004, by Bart Williams, a Munger, Tolles & Olson attorney. According to a law firm memo, “Dowie said that if we examined the records of political contributions and bonuses, we would find no correlation between the two.”
“He said there would be many occasions when people who did not contribute received a bonus, and when those who did contribute, did not receive a bonus,” the memo added.
Beck, Fleishman-Hillard’s lawyer, said it was ironic that Dowie “now tries to depict himself as some sort of whistle-blower.”
During the internal investigation, he said, some staffers accused Dowie of pressuring them to contribute to political campaigns, including that of Mayor James K. Hahn, with whom Dowie had a close relationship.
One such employee was identified as Samantha Sackin. According to another Munger, Tolles & Olsen memo, Sackin said Dowie had told her that if she did not contribute, it could hurt her career at Fleishman-Hillard. Sackin subsequently contributed $1,000 to Hahn’s campaign and $2,200 to other candidates in 2001.
In December of that year, the memo said, Dowie called her into his office and gave her a check. There is a discrepancy over whether it was for $3,000 or $4,600.
“He told her it was a bonus check and she should not ask him about it,” the memo related. “Ms. Sackin asked Dowie if the bonus was performance-based. Dowie again told her not to ask about it and said she should leave his office.”
Beck said this week that Fleishman-Hillard has turned over to federal authorities all its information about political contributions by employees during Dowie’s tenure as general manager of the Los Angeles office.
“Any suggestion that any current Fleishman-Hillard executive was responsible for reimbursing Los Angeles employees for political contributions is utterly false,” he said. “It is also false to claim that Mr. Dowie was fired for any other reasons than mismanagement of the Los Angeles office and failing to comply with company policies.”
Dowie, who earned more than $300,000 a year as general manager, is scheduled to go on trial in November along with his former deputy John Stodder Jr. However, U.S. District Judge Gary A. Feess has indicated that the trial might be delayed.
Another former deputy, Steve Sugerman, was also indicted in the case, but he negotiated a plea agreement and is expected to testify against Dowie.
The case grew out of a Times investigative report, published in 2004, in which seven former Fleishman-Hillard employees told about the overbilling.
The firm was initially hired during Mayor Richard Riordan’s administration to help the DWP cope with changes in state regulations that threatened to eliminate the department’s monopoly status, forcing it to compete with private utilities for customers.
That threat never materialized, but Fleishman-Hillard was kept on. Dowie helped by ingratiating himself with Hahn, who succeeded Riordan in 2001. He raised money for Hahn’s political campaigns and became a valued unofficial advisor.
After the disclosures, Fleishman-Hillard paid $6 million to settle a civil lawsuit brought against the firm by City Atty. Rocky Delgadillo.