By way of background, John Stodder Jr, a former Fleishman-Hillard executive, was indicted in January for wire fraud charges relating to the DWP account.
It is alleged that Stodder and two unnamed 'co-schemers' overbilled to the tune of $4.2m (£2.25m). It is also alleged that overbilling took place on other government and private Fleishman-Hillard contracts including work for Port of Los Angeles, the World Wide Church of God and architect Frank Gehry's firm.
Overcharging is hardly confined to the PR industry. But this is no small matter. Stodder is charged with 11 felony counts of wire fraud, each of which carries a possible 20-year prison sentence. Meanwhile, moves to increase scrutiny of PR contracts at a federal level are unlikely to become law as most government contracts are carried out in the public domain anyway. Even the disputed timesheets can be downloaded from www.lacity.org/ctr.
The level of media coverage will however ensure that most UK offices of US-based clients are made aware of the scandal, and further questions about quantifying the work of an industry which already finds it hard to prove its worth could be damaging.
Timesheets are a fact of life for most consultancies. Some even have to log real-time reports on client accessed extranets. There's no question that if a client is paying for a consultant's time they need to be able to see how that time is spent, but time sheets are a bit of a double-edged sword. An over-concentration on output not only commoditises PR but also distracts from the broader question of whether a consultancy has actually met the stated objectives. If they have done so brilliantly or even adequately, does it really matter how long it took?
In this case, the problem seems to be that an estimate of time was made in advance and then when the actual time turned out to be less than they hoped for, the hours were inflated. But such circumstance are likely to be as rare as fraud itself.
This is an industry in which overservicing is endemic. If this current controversy leads clients to pay more attention to their agencies' time sheets, they might finally realise just how much value they are actually getting for their money.