PR Execs Held to Account for Overbilling City Accounts

by Diane Farsetta — May 22, 2006 - 12:39pm
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Douglas Dowie, the former head of Fleishman-Hillard's Los Angeles office, was convicted "of 15 counts of conspiracy and fraud in a scheme to overbill city taxpayers for public relations consulting services." His assistant and co-defendant was convicted on 12 related charges. At issue were contracts awarded by the city's Department of Water and Power, port and airport. The "combination of precise billing records and e-mails presented by prosecutors convinced jurors of the existence of the criminal enterprise," reports John Spano. Last year, the firm paid the city $6 million "to settle a civil lawsuit that alleged overbilling." The firm's Los Angeles general manager said that Fleishman-Hillard had taken "numerous steps to avoid the possibility of something like this ever occurring again." When the story first surfaced in 2004, the Public Relations Society of America reminded its members to "only charge for the work we do."

Main Source: 
Los Angeles Times, May 17, 2006

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Followup story

Submitted by Sheldon Rampton on June 7, 2006 - 4:43am.

PR Week has an [http://www.prweek.com/us/sectors/crisiscommunications/article/560023/ interview with John Mann], one of the jurors in the trial, who says reaching the guilty verdict was "not a terribly emotional decision" because "There were concrete facts, and the numbers were just not adding up" (subscription required).

[[John Stodder]], Dowie's assistant at Fleishman-Hillard (who was convicted on 12 counts) has his own weblog, which includes [http://johnstodderinexile.wordpress.com/2006/05/17/after-the-verdict/ his reaction to the verdict]: "I can't write anything specific about the jury's verdict yesterday. The process is not really over. So there's not a lot I can say right now, other than to echo my attorney's disappointment and disagreement with this result. ... It’s not appropriate for me to get into the details, except to say that my plea of 'not guilty' was sincere, and based not only an examination of my own heart, but also on my understanding of the law. I value the relationships I had with my clients thus would never have presented a bill to them for services they didn’t receive. Obviously the jury differed with my position. I don’t expect anyone to lightly dismiss the weight of that verdict. So until I’m at greater liberty to explain myself, I just have to deal with the fact that many will conclude the jury is right."

Stodder's blog post also includes a comment from one of his friends, Suzanne Reed: "Your integrity is impeccable and irrefutable. There is no amount of evidence that anyone, anywhere could present to me that would convince me that you are guilty of the charges that were brought against you."