LOS ANGELES: "Go figure it out."
According to former Fleishman-Hillard Los Angeles SVP Public Affairs Steve Sugerman, these were the instructions GM Doug Dowie gave him at the end of each month's billing cycle: "Figure out how to hit the number that we had projected ... people's livelihoods depend on us."
Appearing last Thursday and Friday as one of the government's final witnesses in the now month-long Doug Dowie-John Stodder trial, Sugerman competently served his role as the prosecution's not-so-secret weapon. Unlike previous witnesses, several of whom testified in exchange for immunity, Sugerman - who worked under Dowie at Fleishman from 1997 through 2002 - pleaded guilty to three counts of wire fraud in relation to the firm's allegedly over-billed Los Angeles Department of Water and Power PR account. Although he has agreed to cooperate fully with the government, the one-time LA deputy mayor could still receive up to 15 years in prison and $750,000 in fines.
"Dowie was my boss," Sugerman told the court, when asked why he would have put himself in such a position. "He gave me very specific instructions."
Sugerman is also the first witness who has implicated Dowie directly without relying on former SVP of public affairs John Stodder as a buffer. He said he took "write-up" direction straight from the GM; in fact, Stodder did not join Fleishman until several months after Sugerman's January 2002 resignation. While Sugerman did acknowledge that Dowie "never specifically" told him to add hours to employees' billing worksheets, the former SVP said "there was no other explanation or directive ... the month was closed in the billing cycle. There was no other way to increase the revenue at that point."
In a neat grey suit (though slightly askew tie) and thin-framed glasses, Sugerman showed little expression on the stand, save for an emphatic (probably unintentional) raising and lowering of his eyebrows. Questioned by Assistant US Attorney Cheryl O'Connor Murphy, Sugerman told the court how the LA DWP account had originally provided an "overwhelming volume" of work for Fleishman, in the late 1990s. But for various reasons, the workload tapered off a bit around 2000, he said, adding that while the account remained one of the three largest in the office -- and "at least half" of the public affairs' groups' $3 million annual revenue -- he and Dowie had frequent discussions as to boosting the client's business. When even the most aggressive legitimate billing efforts could not overcome financial-forecast gaps, Sugerman recalled, he and assistant Josh Gertler would "write up" the account "for work that was not performed."
Under cross-examination, Dowie attorney Nick Hanna--hand draped casually in his suit-pant pocket--led Sugerman through a litany of Fleishman career lowlights, from his blatant "cheating" of LA DWP executives to his ultimate betrayal of longtime colleague and mentor Dowie. Hanna also took the opportunity to characterize his client as a devoted "workaholic" who demanded others in his office to work as hard as he did.
Currently principal of his own, five-employee PR firm, Sugerman came across more like the kind of guy one would find co-coaching a Little League team or hanging out at the Home Depot than going to jail. But as he told the court, especially with his background as a former government staffer, pleading guilty "was the right thing to do." Now it's just a matter of wait-and-see.
Also a matter of wait-and-see is the status of the prosecution's case, possibly concluding earlier than expected.
"If we finish early, we will just all celebrate," said US District Judge Gary A. Feess.
The trial is scheduled to resume Tuesday morning.