LOS ANGELES: Investigations into rumors of a "pay to play" atmosphere surrounding the awarding of Los Angeles contracts heated up last week with news that a federal grand jury is examining the charges.
That grand jury has issued subpoenas to city departments, including Los Angeles World Airports (LAWA) and the Department of Water and Power (DWP) for all city contracts since 2000 exceeding $100,000. The subpoenas include two multimillion dollar PR DWP contracts held by Fleishman-Hillard and the Lee Andrews Group (LAG), DWP manager of media and community relations Darlene Battle said. LAG has also worked for LAWA.
The probe also includes subcontractors paid more than $100,000. FH GM Doug Dowie said that about 30% of his agency's $3 million contract is tagged for minority- and women-owned subcontractors.
Dowie added that he did not expect the FH contract to raise any ethics questions.
"I don't anticipate any problem at all," he said. "They've subpoenaed every contract over $100,000. That's a truckload of contracts and there is no reason to believe in any way, shape, or form that it has anything to do with Fleishman-Hillard."
Lee Andrews Group president Donna Andrews echoed that sentiment, adding that her agency is only billing about $500,000 annually on its $2.4 million dollar contract.
At issue is whether those in charge of awarding contracts pressured bidders to make contributions to political campaigns and causes at City Hall. Last week, the LA Ethics Commission recommended a ban that would prohibit city commissioners, appointed by the mayor to manage various departments, from soliciting contributions. The City Council is expected to vote on that soon.