LOS ANGELES: With Tuesday came another attention-challenging day for jurors in the Dowie-Stodder billing trial, the second in what could be weeks of lengthy testimony by US government witnesses.
Monique Moret, former LA-based Fleishman-Hillard VP of public affairs, testified on behalf of the prosecution in exchange for immunity as a co-conspirator in the firm's alleged fraudulent dealings with the city's Department of Water and Power (DWP).
Moret characterized Stodder as a trusted employee when the two worked at Edelman's Los Angeles office from 1996-2002. After Stodder moved to Fleishman in early 2002, Moret said he courted her to serve as lead on the DWP account. In summer 2002, she too joined Fleishman, Moret said, shortly after the firm had renewed its $3 million-a-year time- and materials-based PR contract with the utility.
It was only weeks after she assumed her new position, Moret said, that Stodder introduced to the concept of "writing up" non-worked hours.
"It was well known in the office that [the DWP account] was the biggest account," Moret said. "It kept a lot of people employed and had the largest budget."
Moret recalled that on a weekly, monthly, and annual cycle, Doug Dowie - then Fleishman's GM of the LA office- would present the firm's headquarters with revenue projections, "to give St. Louis an idea of where the office was in terms of its financials."
As a publicly held company, Moret noted, it was essential that forecasts were met. There was a "commitment made to St. Louis," she explained, adding that Stodder - who was SVP of public affairs and her direct report - "was under a lot of pressure" from both Dowie and home-office executives to not only meet, but exceed the projected numbers.
In September 2002, Moret said Stodder told her that in an effort to meet financial expectations, former Fleishman SVP Steve Sugerman (expected to testify for the government in the coming weeks) had routinely "written up" the DWP account. But she recalled that Stodder added that "he hoped we wouldn't have to do that."
According to Moret, however, when the firm failed to meet its December 2002 forecast, the illegitimate billing process began again - and it was her job to make sure everything added up.
As Assistant US Attorney Adam Kamenstein meticulously questioned her regarding the details of allegedly illegitimate DWP bills prepared between December 2002 and August 2003, Moret was subject to a veritable "This Is Your Life" of billing worksheets and invoices - most covered with altered employee hours, all in her handwriting. Even before her second hour on the stand, Moret's responses took the form of a mantra: Under the direction of Stodder, she said repeatedly, Moret would add non-worked hours to employees' time sheets, "to bump up our billings to get to our projections."
She added: "They were not legitimate."
Detailing the "write up" process, Moret explained that revenue received from these added hours ranged from $20,000 to more than $50,000 a month through August 2003. While she noted there were times, particularly in summer 2003, when she was distracted from her fraudulent accounting duties by other firm work, Moret said she spent hours manipulating the billing worksheets with the help of her assistant, Candice Campbell.
Casually sophisticated in a slim black suit and light turtleneck, Moret remained perfectly poised, the image of a PR professional more likely to oversee a high-profile city event than serve as witness in a federal conspiracy trial. At one point, however, she did appear to lose her composure: while recounting Dowie's reaction to the October 2003 resignation of SVP Fred Muir.
In a closed-door meeting, Moret said, Dowie told her and Stodder that the "real reason" Muir had left Fleishman was because of the firm's fraudulent billing practices in relation to the DWP account. "So," Moret recalled Dowie asking, with a hint of sarcasm, "Are we writing up the DWP bills?"
On the other side of the courtroom, Stodder also appeared to be momentarily disturbed as Moret recalled she was "freaked out" by the GM's question and nonchalant attitude. "What's Dowie doing acting like he doesn't know about write ups?" she remembers asking Stodder.
After almost four hours of questioning, Kamenstein offered the witness to the defense, beginning with cross-examination by Stodder's attorney, Jan Handzlik. Addressing Moret gently, but with purpose, Handzlik continued with the day's billing-worksheet theme, asking her to consider the legitimate reasons an DWP bill might have been "written up:" inadvertently missed-time entries, for example, or intentional under-billing for an unknown reason.
"I don't think [that] was done very often," Moret responded, with a small smile.
Handzlik's cross-examination - followed by that of one of Dowie''s attorneys - is scheduled to continue Wednesday morning.