PR Firm settles LA lawsuit for $5.7 million

According to an Associated Press story Fleishman-Hillard has settled it’s legal wrangle with the city of Los Angeles for $5.7 million.

The lawsuit arose from accusations by city officials that the PR firm were inflating their bills.

Richard Kline, who replaced Dowie last year as head of Fleishman-Hillard’s Los Angeles office, said the firm wanted to settle because some of the billing fell below its standards. The company also worried about litigation costs and damage to its reputation and business in the event of a trial.

“We apologize and take responsibly and now we’re trying to put this behind us,” Kline said.

The company, he added, has since strengthened oversight of its financial reporting, hired independent accounts to conduct routine audits, and forced employees to certify the accuracy of their billings, among other measures.

In January, a former Fleishman-Hillard executive was indicted in a wide-ranging criminal probe of city government. John Stodder has pleaded not guilty to 11 counts of wire fraud in an alleged scheme to overbill the city’s Department of Water and Power by $250,000.