LOS ANGELES: The U.S. Attorney in Los Angeles has served Fleishman-Hillard with subpoenas relating to investigations of possible "pay to play" activities surrounding the awarding of city contracts in Los Angeles, a source confirmed.
The subpoenas were served at the agency's St. Louis headquarters but relate mainly to contracts with the Los Angeles World Airports, the Harbor Department (which manages the Port of Long Beach), and the Department of Water and Power. Fleishman's L.A. office has large contracts with each of those city departments and has won more than $20 million in L.A. city work in the past few years.
"We've gotten two subpoenas. We're cooperating fully. To the best of our knowledge, we have performed our business for the city of Los Angeles in an appropriate manner," said Richard Kline, Fleishman's spokesperson on the issue.
Kline, Fleishman's western regional president, was only recently appointed spokesperson for this issue, which has grown in significance over the past few months.
The Los Angeles Daily News and the Los Angeles Times reported that the subpoenas request all emails between city officials and Fleishman executives for a number of years. Because grand jury investigations are secret, the U.S. Attorney's public affairs officer Thom Mrozek said his office could not comment on the matter.
The "pay to play" allegations center on whether companies vying for lucrative city contracts were asked to donate money to Mayor James K. Hahn as a prerequisite for winning the business.
Fleishman has donated about $135,000 to the mayor in recent years, as well as handling pro bono work for his office. That work included aid on an overseas trade trip and PR for the mayor's "one city, one book" initiative.
Recently, federal investigators called the head of the Harbor Department public affairs department to testify on the issue in front of a grand jury. That department holds a two-year contract with Fleishman valued at $560,000.
News of the subpoenas comes during a difficult week for Fleishman. Earlier, Los Angeles city controller Laura Chick announced she would conduct an audit of the agency's $3 million dollar contract with the Department of Water and Power.