LOS ANGELES: The LA city attorney last week expanded its civil lawsuit against Fleishman-Hillard to include as a defendant Doug Dowie, the agency's former LA GM, and two other city contracts, in addition to the agency's work with the Department of Water and Power.
The amended lawsuit, filed last Monday, charges that Fleishman "padded hours" on invoices, "inflated hourly billing rates," claimed work that was not done, and double-charged for some work.
It further charges that Dowie "instructed employees to bill for work that was not completed or undertaken, and to add a certain dollar amount each month" to billings.
It also contends that "Dowie created an atmosphere of intimidation such that employees were motivated to bill for hours even if no work was completed."
The allegations cover contracts from 1998 to this year with the DWP, as well as with the Airport Department and the Harbor Department.
City attorney spokeswoman Katie Buckland said that one red flag for her office was the "quickness of the [contract] amendments. Of particular interest is the fact that almost immediately after the contract was entered into, there was an additional contract asking for more money. It's difficult to see how they could have used up the hours within the original contract."
Buckland added that, although the suit leaves room for other Fleishman employees to be named as defendants, she did not believe there were any current plans to do so.
Dowie signed the questioned contracts personally, Buckland said. During his tenure as LA general manager, Fleishman had three regional heads for California: current regional president Curt Kundred; Doug Michelman, now EVP of corporate relations for Visa USA; and Richard Kline, the current Los Angeles general manager and regional president.
Kline said he did not expect any of the regional presidents to be named as defendants.
Kline said that the agency does not tolerate unethical behavior. He added that its culture is "entrepreneurial" and leaves day-to-day management of offices in local hands.
"We are going to give trust and respect to our managers to run each office in a manner that respects Fleishman-Hillard's values and philosophy," he said. "We will not and should not micromanage."
Kline added that the expanded lawsuit was expected by the agency.
"We've been discussing these issues with the authorities for weeks, and we are cooperating fully with the city," he said.
Kline added that the firm had not completed its internal investigation and that Dowie had retained outside legal counsel.