LOS ANGELES: Fleishman-Hillard on Friday said it was placing former LA GM Doug Dowie on administrative leave.
The move came after the Los Angeles City Attorney earlier that day filed a five-count civil suit against the agency. The suit alleges over-billing, misrepresentation, and fraud in the agency's handling of its contract with the Los Angeles Department of Water and Power.
Last week, Richard Kline, FH regional president and LA GM, told PRWeek that Dowie was still working with clients.
City Attorney Rocky Delgadillo announced the suit at a joint press conference with Mayor James K. Hahn, City Controller Laura Chick, and City Councilmember Tony Cardenas.
"This is a case of outright fraud," he said. "This conduct was despicable."
Delgadillo did not say how much money the suit would seek, but did promise to ask for punitive damages. He added that from 1999 to 2004, the PR agency billed more than $20 million against the DWP contract.
Kline responded to the suit by saying, "We regret that the City Attorney of Los Angeles has taken this action. We cannot comment on pending litigation. However, our firm would not accept or condone any misrepresentation of client billing. It goes against everything we've stood for in more than 20 years in business in Los Angeles and we are continuing our full cooperation with authorities investigating this matter. We are investigating all allegations and if we uncover any wrongdoing we will take strong and immediate steps."
Kline added that he will take over all of Dowie's clients and other duties.
Chick said that her office, which has "been concerned about the Fleishman contract for some time," has now hired outside forensic auditors to examine the issue. She condemned DWP oversight of the contract, saying "as a result of this contract (the DWP's) image is once again in the dirt."
Delgadillo added that his office has been working on the investigation since April, and that he would offer "whistle blower protection" to any current or former FH employees who had information pertinent to the suit.