LOS ANGELES—Douglas Dowie, former general manager of the Los Angeles office of Fleishman-Hillard, was indicted by a federal grand jury on charges that he directed a criminal conspiracy that led to the over-billing of several clients.
Dowie, who was indicted on Thursday, surrendered to authorities Friday and was released on $75,000 bail after surrendering his passport.
According to the indictment Dowie—formerly a senior advisor to recently deposed Los Angeles Mayor James Hahn—routinely ordered subordinates at Fleishman to inflate the number of hours they worked under contracts with the city’s Department of Water & Power and the Port of Los Angeles, as well as with two private clients: Gehry Partners LLP and the World Wide Church of God.
Dowie is the second former Fleishman executive indicted in the case. John Stodder, who ran the firm’s public affairs practice in Los Angeles, was first indicted in January on similar charges. That indictment has now been expanded to include Dowie’s name, increase the amount allegedly stolen from $250,000 to $325,000 and add a conspiracy count against both men.
The indictment says the Dowie e-mailed Stodder in January 2003 to ask whether they could “pad” the monthly bill to the DWP by adding $30,000 of “ambiguous counseling for the mayor” and two top executives within the Department. Stodder responded that $30,000 was “more than the system could bear” but that $15,000 could be added “without incurring too much more scrutiny.”
“We’re very disappointed,” said Dowie’s attorney Thomas Holliday, a partner at Gibson Dunn & Crutcher. “We believe the charges are ill-placed and unfounded, and we look forward to Mr. Dowie having an opportunity to defend himself in court and anticipate he’ll be fully vindicated.” He said Dowie is expected to plead not guilty to the charges.
Dowie has previously suggested that he is being made a scapegoat by Fleishman-Hillard, although the firm has repeatedly said in statements to the media that it takes full responsibility for the over-billing, and recently announced a $5.7 million settlement of all civil claims arising from the over-billing incidents. Dowie is also suing Fleishman for wrongful dismissal, and says the firm owes him up to $6 million in lost wages.
Richard Kline, who replaced Dowie as general manager in L.A., responded to the indictment with a statement.
“We deeply regret any improper actions that occurred in our Los Angeles office,” said Klein. “We have been cooperating fully with the investigating authorities since this inquiry began and we will continue to do so.
“What makes the events in Los Angeles disturbing and painful for us is that our firm places such a high value on ethics and integrity. Other than these recent problems in our Los Angeles office, we have never had an issue of this type in the almost 60-year history of our firm.
“We have taken full responsibility for any improper actions that occurred in our Los Angeles office, but no organization is immune from someone violating its policies. We have taken every step possible to set matters right with the City and its residents.”