The other former employee, an executive, recalled a specific monthly meeting at which the need to "write up" -- or falsify -- hours amounting to $30,000 from the DWP account was discussed.
"It was an open secret, and that kind of shocked me," the former executive said. "I mean, if you're stealing $30,000 ... you'd think you'd keep it quiet. I know I would."
Kline questioned whether the allegations of false billings were being raised by former employees now working for competitors eager to take business from Fleishman.
Anthony M. Glassman, a libel lawyer retained by Fleishman last week, called the allegations "unfounded accusations by biased sources." He noted that former employee Greenwood is the daughter of Noel Greenwood, a former Los Angeles Times senior editor who retired in 1993, and questioned whether there was a "relationship" between other former employees and The Times.
Times Managing Editor Dean Baquet said the newspaper's policy was not to identify sources to whom it has promised confidentiality.
The DWP, the nation's largest municipal utility, provides water and electricity to 3.8 million residences and businesses in Los Angeles. The department has 8,100 employees and a $3-billion annual budget.
Fleishman's contract with the DWP became the focus of public controversy in April when City Controller Chick refused to pay the firm's December and January invoices, citing what she said were questionable charges, such as $50 or more for leaving a telephone message. She launched an audit of the contract, saying the department's need for outside PR assistance was suspect.
A week later, federal authorities served subpoenas on Fleishman's St. Louis headquarters as part of a separate ongoing investigation into Los Angeles City Hall contracting practices. The joint county-federal "pay-to-play" probe is examining whether city officials traded lucrative municipal contracts for political donations. No one has been charged and there is no indication that Fleishman is a target of the probe.
Fleishman and its executives are leading political donors to Mayor James K. Hahn and have provided free public relations services to the mayor and other city officials.
In particular, Dowie, a former Marine and onetime managing editor of the Los Angeles Daily News, has been one of the mayor's chief reelection fundraisers and a member of Hahn's kitchen cabinet. In all, records show, Fleishman and its employees donated $131,200 to local races and initiatives since 1998, including $15,000 to Hahn's 2002 anti-Valley secession campaign.
In that same period, Fleishman has grossed more than $25 million from its DWP contract, millions of which were passed on to subcontractors.
Fleishman's contract has disturbed other city officials, including Councilman Tony Cardenas, who questioned why the DWP needed so much outside help. The utility has its own public relations staff of 23, which includes PR specialists, clerical workers, photographers and graphic artists.
Chick said last week that allegations by the former Fleishman employees were "dismaying" because they underscored her suspicions that government oversight of consulting contracts is so "loosey-goosey that it's inviting abuse."
"It confirms my worst fears that there's game-playing going on as far as consultants being paid," the city controller said.
Told last week about the allegations of bogus billings, Frank Salas, DWP's acting general manager, said the charges were "a total surprise to me." Salas, who is listed on the Fleishman contract as the DWP administrator in charge, said he often left it to his staff to review and sign off on the firm's monthly billings.
He added that he would check with the utility's internal auditors to see what recourse DWP might have.
To review Fleishman's billing practices, The Times obtained more than 1,000 pages of invoices from the DWP that provided hourly summaries of every Fleishman employee working on the account. Greenwood once billed the DWP for an hour and a half of her time, at $160 an hour, for having "conducted search for Academy Award tickets for DWP."
One employee repeatedly billed the department $180 an hour for having "monitored, formatted and forwarded LADWP and related news clips" to other Fleishman employees. Others commonly billed the DWP for more than $20,000 in services a month, amounts that in several months could have covered the employees' annual salaries.
Dowie himself billed hundreds of hours of services at up to $425 an hour, many of which were for providing "strategic counsel." While the billing records customarily state whom he provided such counsel to, some say he provided "strategic counsel" without noting whom he was talking to. In the first six months of 2003, Dowie billed the DWP for $98,599 in services. Once, Dowie billed the DWP $850 for a two-hour "business lunch" with Salas, which didn't include the cost of the meal.
