LOS ANGELES: Fleishman-Hillard announced last week that it will not seek renewal of two city contracts set to end soon and will bow out of a third within the next month.
Fleishman regional president and LA GM Richard Kline said the firm will not seek extensions of contracts with the LA Department of Water and Power (DWP) and the Port of Los Angeles, and will end a contract with the Los Angeles World Airports (LAWA) early.
The announcement to divest itself of those city contracts comes during a time when the LA city controller has questioned billings by Fleishman for its multimillion-dollar DWP contract, and when city and federal authorities are investigating Mayor James K. Hahn's administration for a possible "pay to play" environment in which businesses vying to win city contracts were encouraged to make political contributions.
Randy Howard, DWP executive assistant to the GM, said that the DWP will not immediately seek a new agency and has redistributed internal communications staff to better handle corporate communications. He added that the decision to end the relationship between his agency and Fleishman "came mostly from them."
Theresa Adams Lopez, Harbor Department public information director, said her group will look for new PR help to aid their five-person internal team. It plans on issuing an RFP.
LAWA PR director Nancy Castles said that she doesn't expect a new RFP for the air-services marketing contract Fleishman resigned.
Kline said that "at its peak," city contracts represented about half of the LA office's annual billings. The office's focus on government work has led many local PR leaders to speculate that it will need to make layoffs. But Kline said there were no such plans, and efforts were being made to replace lost revenue.