Los Angeles Mayor James K. Hahn directed city departments Monday to take steps to halt business with public relations firms, potentially saving millions of dollars a year.
The unusual move comes on the heels of an announcement by one of the city's largest public relations firms that it was phasing out its city work amid criminal probes into city contracting. The decision by St. Louis-based Fleishman-Hillard, which had close ties to the mayor, will affect contracts that total more than $3.6 million.
Hahn could not say Monday how much the city was paying public relations firms, but he has asked city departments to send him an inventory. He also asked them to immediately halt negotiations with firms for future contracts and to break existing contracts, if possible.
"We're going to have to save every single dollar we can," the mayor said Monday, adding that Fleishman-Hillard's work "brings to mind how much money you can end up spending on these contracts."
Officials at four of the largest city departments said those agencies hold more than a dozen public relations contracts worth at least $7 million a year.
Los Angeles World Airports has four public relations contracts worth $600,000, not counting the $500,000 deal that Fleishman-Hillard just canceled, according to airport spokesman Paul Haney.
Department of Water and Power General Manager Frank Salas said he would reevaluate whether to exercise an option on a $2-million public relations contract with Lee Andrews Group. Fleishman-Hillard also has a $3-million-a-year contract with DWP that will expire in June.
And the Community Redevelopment Agency will reevaluate $250,000 worth of contracts for public relations services with the Lee Andrews Group and Cerrell Associates, an agency official said.
Taxpayer advocate Jon Coupal, head of the Howard Jarvis Taxpayers Assn., applauded the mayor Monday. "I've never understood the function of hiring separate public relations firms for individual city agencies."
In addition to costing taxpayers millions of dollars, the city's reliance on public relations firms has fueled questions about whether city contracts were being handed out as rewards to political donors.
Fleishman-Hillard, which has been paid more than $20 million in the last seven years by various city departments, donated $35,000 to the mayor's anti-secession campaign.
The U.S. attorney's office recently served subpoenas at the firm's St. Louis headquarters as part of its investigation into contracting practices in Los Angeles. Sources said federal prosecutors had requested all e-mails between Fleishman executives and city officials over a period of years.
Two years ago, Winner & Associates, another politically connected public relations firm, pulled out of a lucrative airport contract amid questions about how much the firm was being paid and about the firm's close ties to Hahn.
Hahn said Monday he hoped to get an inventory of the city's public relations contracts in the next two weeks.