CA: (D-LA Mayor) Hahn's P.R. freebie

LA Daily News ^ | 11/28/04 | James Nash

[NormsRevenge]

In addition to DWP's contract with Fleishman-Hillard, Mayor James Hahn used the harbor and airport department contracts with the P.R. firm to strategize and publicize himself and his administration, records show.

A review of invoices City Controller Laura Chick turned over to the City Attorney's Office show Fleishman-Hillard billed Los Angeles World Airports and the Port of Los Angeles thousands of dollars for publicizing events that showcased the mayor.

Chick has accused the firm of overbilling the Department of Water and Power $4.2 million over a six-year period. She has not specifically looked at billings at the other agencies.

Both the harbor and airport departments, as the DWP, have their own large public relations operations, but Hahn turned to Fleishman-Hillard after the Sept. 11 terrorist attacks in 2001 for help, running up more than $20,000 in bills for an effort titled "Media Project for Mayor Hahn." The project was designed to maximize Hahn's national media exposure as a spokesman on airport security.

A Fleishman-Hillard staffer billed the airport $1,150 for accompanying Hahn on interviews during a conference in Washington, D.C.; another staffer charged $750 to help coordinate the interviews.

At the port, the invoices show that a Fleishman-Hillard staffer charged $1,470 to attend Hahn's 2002 State of the Harbor speech and another billed $1,102 to attend a Harbor Commission meeting.

"I have repeatedly been asking why we needed these public relations contracts in the first place," said Chick, whose audits triggered county and federal grand jury investigations of possible wrongdoing in city contracting practices.

"The larger question to ask is: Who was benefiting?"

Chick has not tabulated the full amount of Fleishman-Hillard billings that involved the mayor or his staff but the Daily News' and other media stories have accounted for hundreds of thousands of dollars in billings connected to the mayor's activities.

Fleishman-Hillard submitted invoices for such services as clipping newspaper articles, writing press releases and organizing media events for the mayor, as well as playing a key role in his 2002 trade mission to Asia.

Hahn has insisted the expenditures were justified, saying, "It's the people of the city who were benefiting from this" because he was promoting what he believed were positive initiatives.

But neither he nor his aides have responded directly to questions about why the three departments contracted with Fleishman-Hillard for nearly $4 million a year in services when each had its own multimillion-dollar public relations operation, in addition to the mayor's own large communications staff.

Fleishman-Hillard Vice President Richard Kline, who has acknowledged nearly $700,000 in overbilling on the DWP contract, said the company has no evidence of any improper bills submitted to the harbor or airport departments.

Kline was brought in to manage the Los Angeles office after its previous general manager, Doug Dowie, was placed on leave amid allegations that his employees routinely inflated DWP bills.

"Based on conversations with the individuals involved, all of our work was done at the request and direction and with the approval of our client, which in this case was the department of airports," Kline said. "It's clearly outlined in the invoices."

Fleishman-Hillard, a subsidiary of the massive international public relations firm Omnicom, has become swept up in the allegations of pay-to-play contracting practices at City Hall that have led to county and federal investigations.

Executives of Fleishman-Hillard contributed heavily to Hahn and his 2002 campaign against San Fernando Valley secession, as well as to other City Hall political figures. The firm got the DWP contract in 1998 and the harbor and airport contracts after Hahn took office in 2001.

Chick's latest audit accused Fleishman-Hillard of overbilling the Department of Water and Power by $4.2 million out of the agency's $24 million in contracts dating back to 1998. She also has gathered information on the contracts at the harbor and airport, involving $737,000 in billings.

The City Attorney's Office has filed suit against Fleishman-Hillard and against Dowie, seeking to recoup money from the overbilling alleged. Dowie has denied any wrongdoing.

According to invoices submitted by Fleishman-Hillard employees, some of the firm's work for the airport and harbor departments was intended to raise Hahn's public profile.

For instance, Fleishman-Hillard billed the city more than $50,000 to promote the launch of an AeroMexico flight from LAWA-owned Ontario International to Hermosillo, Mexico. The route was canceled 11 months later because of low demand.

The bills included $225 to distribute two press releases highlighting Hahn's role in the service launch and $1,200 for dancers at the inaugural flight -- triple the cost the dancers billed Fleishman-Hillard, according to invoices.

Hahn spokesman Yusef K. Robb said Hahn's high public profile in October 2001 was largely due to LAX's status as a prominent terrorist target.

"LAX is Southern California's No. 1 terror target," Robb said. "Mayor Hahn wanted to make LAX safer from terrorists. That's in the public's interest."

LAWA spokesman Paul Haney also defended Fleishman-Hillard's work. "LAWA managed the Fleishman-Hillard contract to ensure it provided good value in promoting new and increased air service at Ontario International Airport.

"Limited resources of only two professional staff at Ontario necessitated the judicious use of outside service providers to further LAWA's commitment to a regional approach to meeting the growing demand for air passenger and cargo service in Southern California."

Overall, Fleishman-Hillard billed the Harbor Department about $488,000, including Hahn's State of the Harbor events in 2002 and 2003, and the promotion of the mayor's initiative to reduce pollution from idling ships.

Shannon Murphy, a former Fleishman-Hillard staffer who now works as Hahn's primary spokesperson, was paid $860 to attend a Harbor Commission meeting.

Robb said Fleishman-Hillard's work at the port played a vital role in ensuring support for the Alternative Maritime Power program, in which shipping companies power docked ships with electricity rather than polluting diesel fuels.

Hahn's political opponents said the airport and harbor billings are part of a pattern of the Hahn administration using Fleishman-Hillard as an arm of the mayor's own six-person public relations office.

"It certainly smells funny, but I recognize that the mayor is the chief spokesman for the city and certainly should speak for the (proprietary departments) as well," said state Sen. Richard Alarcon, D-Van Nuys, who is running against Hahn in the 2005 election.

"But, this is a private contractor and shouldn't be using taxpayer money to promote the mayor. The slippery slope is getting slipperier."

Councilman Bernard Parks, who also is challenging Hahn, noted that Fleishman-Hillard and Hahn traded two employees -- Murphy and Matt Middlebrook, who was Hahn's chief spokesman before going to Fleishman-Hillard's San Francisco office last year.

"The issue is, the city shouldn't be paying for P.R. if it's to create a better image for the mayor or help him win a second term," Parks said. "In the (former mayor Richard) Riordan administration, the department was the client and in the Hahn administration, Hahn became the client. That's the big change."

Matt Szabo, a spokesman for mayoral candidate and former Assembly Speaker Robert Hertzberg, also said Fleishman-Hillard's bills looked extravagant. Hertzberg was hired by Fleishman-Hillard as a consultant in 2002 but never worked on any of the firm's city contracts, Szabo said.

"When we're in a position of not having enough money to put cops on the streets, we don't think the voters would approve of spending millions on personal and political public relations for the mayor," Szabo said.