A federal grand jury Thursday delivered the first indictment in a wide-ranging criminal investigation of corruption in Los Angeles city government, alleging that a former public relations executive at Fleishman-Hillard defrauded city agencies and private clients.
The indictment accuses John Stodder Jr., a partner and senior vice president who ran the firm's local public affairs practice, of participating with "others known and unknown" to submit at least $250,000 in false billings to the Department of Water and Power. Also allegedly cheated were the Port of Los Angeles, the Worldwide Church of God and the firm of renowned architect Frank Gehry.
For The Record
Los Angeles Times Saturday January 15, 2005 Home Edition Main News Part A Page 2 National Desk 2 inches; 62 words Type of Material: Correction
Stodder indictment -- A headline on Friday's front page incorrectly stated that the indictment of Fleishman-Hillard executive John Stodder Jr. involved a "pay to play" scheme. Although federal and local agencies are investigating whether firms were forced to make political contributions in return for contracts, the part of the inquiry involving Stodder accuses him of overbilling the Department of Water and Power.
The indictment makes it clear that grand jurors believed Stodder was not acting alone, referring to at least two other "co-schemers." Law enforcement officials declined to say whether they would seek charges against others, but noted that they had not finished their work.
"This is an ongoing investigation, and charges may or may not be filed against other individuals," said Assistant U.S. Atty. Adam D. Kamenstein, who is directing the joint inquiry that involves the FBI, the Los Angeles County district attorney's office and the U.S. Department of Transportation.
The "pay to play" investigation focuses on whether firms doing business with the DWP, port and city airport agency were forced to make political contributions in return for contracts. Under its $3-million-a-year contract with the DWP, Fleishman-Hillard helped promote the department and billed the utility more than $400,000 in 2002 and 2003 for work to bolster the mayor's image and help him with policy initiatives, records show.
The indictment immediately became an issue in the mayoral campaign, with all four of Mayor James K. Hahn's major challengers criticizing his leadership and focusing on his close ties with senior Fleishman executives.
Douglas R. Dowie, a former partner and senior vice president of the firm who ran the Los Angeles office and was Stodder's boss, was a Hahn confidant and major fundraiser. Fleishman ousted both Dowie and Stodder last week.
Dist. Atty. Steve Cooley called Stodder's indictment "an important step in a concerted ... effort to prosecute public corruption in Los Angeles."
Stodder, who turned 49 on Thursday, denied the charges through his attorney.
