Department of Water and Power and Major James K. Hann

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Major James K. Hann climbed into a cherry picker for news cameras last year to call attention to one of his successes. City workers, he said, were ridding Los Angeles of an "urban menace" - shoes dangling from utility lines.

To arrange the media event, the mayor turned not to his own press office, however, but to Fleishman-Hillard, a public relations firm working for the .

The firm drafted the mayor's news release. It wrote his talking points. And it arranged for the truck and shoes.

the DWP then paid the bill - at least $7,500.

it was not the only time the mayor's office tapped into the DWP contract, which was intended to help the utility explain its services to customers.

Billing records and e-mails show that the DWP paid Fleishnman more than $400,000 over 2002 and 2003 for work to bolster the mayor's image, craft his responses to civic crises and even develop major policy initiatives.

Although most of the events, like the shoes news conference, had some connection to the utility, many were orchestrated by the mayor's office to showcase Hahn rather than the DWP, the records show.

Fleishman's $3-million a year contract with the DWP was cancelled in April amid growing scrutiny and is being investigated by local and federal prosecutors. City Controller laura Chick released an audit this week accusing Fleishman of overcharging the DWP by $4.2 million.

Somebody who was supposed to be watching over this contract obviously was not reviewing these bills" hahn said when evidence of the overbilling was first disclosed by The Times in July.

But a review of thousands of pages of public records, as well as interviews with former Fleishman employees,indicates that Hahn's office not only monitored the contract, it asked for monthly reports on Fleishman employee. Two others said hahn's deputies made clear that the Mayor's office was the real client.

All three asked not to be identified out of fear that their careers would be jeopardized.

The mayor has his own five-person press office, wghich currently has an annual budget of about $3000,000.

Nonetheless, Fleishman was in almost daily contact with mayor's office. The firm helped put together at least 16 news conferences and 24 news releases featuring Hahn, many on the mayor's letterhead, not the DWP's. Fifteen of the releases make no mention of the DWP or relegated the utility to second, even third, billing.

Fleishman also wrote speeches, letters and media strategies for Hahn. It rounded up laudatory quotes about him from officials in government and the private sector or news releases.

And it helped organize and publicize hahn's 10-day trip to Asia in 2002, a public relations bonanza for the mayor, during which Fleishman rang up more than $160,000 in bills, all charged to the DWP.

Hahn said the firm's work on the Asia trip and other DWP events helped the city, not him.

I think the people of Los Angeles were the ones who benefited from all these programs. "he said." They were doing work for the city."

Richard Kline, who took over Fleishman's Los Angeles office this summer, also said he beleived that the firm was working for DWP, not Hahn. "As far as I know, all our bilable work was done at the reuest of DWPmanagement" he said.

But Chick questioned who was actually controlling Fleishman's work for the utility.

"Throughout all of this, I kept asking who is really benefiting here," said the controller, who has been looking at Fleishman's work for months and said she repeatedly asked Hahn why DWP was paying the firm so much.

The department hired Fleishman-Hillard in 1998, when Richard Riordan was mayor. the firm was supposed to help improve the DWP's image as the utility prepared to face competition for customers when the California energy market was deregulated.

Fleishman performed millions of dollars of work for the DWP that had nothing to do with the mayor's office, including designing and managing the uility's $750,000 a year corporate sponsorship of the Dodgers.

But when hahn took office in 2001, Fleishman began assidously cultivating a relationship with the mayor and his top aides, in part with extensive pro bono work, acording to e-mails and interviews with former Fleishman employees.

The strategy was the brainchild of Douglas R. Dowie, the brash ex-Marine and former newspaper editor who headed Fleishman's Los Angeles office, the former employees said.

Hahn's office, in turn, increasingly relied on the firm for public relations work, another former Fleishman employee said.

That led to a significant shift in the firm's focus, said the ex-employee, adding that under Riordan, Fleishman viewed the DWP as its client while under Hahn, it saw the mayor's office as the client.

Records show that Dowie was in constant contact with one of Hahn's closest aides, Deputy mayor Troy Edwars, a young Hahn fundraiser whom the mayor chose to oversee the DWP and the port and airport agencies.

Dowie, whom the city is suing was suspended by Fleishman in July after The Times reported that employeesof the firm siad they were told to pad their bills on the DWP account.

Citing orders from Fleishman, Dowie declined to comment. He said in court papers that the allegations against him were meritless.

Hahn has accused the DWP of failing to properly monitor the contract and demanded tht Fleishman be held accountable, but records indicate that the mayor's office was keeping close tabs on the firm's work.

And twice under Hahn's administration, the contract was renewed, even though the threat of deregulation had passed.

When the contract expired in 2002, Hahn's DWP commissioners awarded a new deal to the firm that gave the department's general manager- also appointed by the mayor - exclusive authority to renew Fleishman's $3-million annual contract.

About the same time, Deputy Mayor Edwars directed the DWP's acting general manager to provide him with monthly reports on Flleishman's work, including the "associated costs for each task."

he concluded his memo with this instruction. "Please provide me with monthly calendar of all upcoming department-sponsored events to gauge the mayor's pffice participation."

Edwars, who could not be reached for comment, resigned earlier this year amid criminal probes into city contracting at the departments he oversaw. In the past, he has denied any wrongdoing.

E-mails and billings show that Fleishman, in fact, often coordinated its work for the DWP directly with the mayor's office.

After it won its new contract, the firm went to work on the mayor's trip to Asia in November 2002. No single project that Fleishman handled for Hahn cost the DWP more, billing records indicate.

"That trip to Asia has been enormously beneficial to us," the mayor said, citing increased trade and agreements with shipping companies.

Top DWP officials accompanied the mayor on the trip. And the mayor's effort to have Asian shippers begin plugging their idling ships into electrical power supplies at the Port of Los Angeles - instead of keeping their diesel engines running - had a connection to the DWP, which would supply the power.

But most of the mayor's public activities in Ais - from kickoffs of campaigns to promote L.A. in Seoul and Tokyo to an agreement to lighten traffic at Los Angeles International Airport - had nothing to do with the utility.

Yet the DWP was charged more than $160,000 as Fleishman employees traveled with the mayor, biefed him on local protocols, set up news conferences and meetings for him, and ensured that news of his accomplishments was disseminated on two continents.

The firm even helped the mayor's office determine which reports should go on the trip. Fleishman recommended one reporter with a local weekly "because he is lest likely to undercut the objectives of the trip through his reporting," said an e-mail to the mayor's office.

In Beijing, an employee in Fleishman's office there aided in negotiations with the Chinese State Forestry Administration as part of the mayor's unsuccessful efforts to persuade Chinese authorities to send a pair of pandas to the Los Angeles Zoo.

And when Hahn announced that a Taiwanese airline would move its cargo operations from LAX to Ontario International, another airport run by Los Angeles, Fleishman sought a quote from the airports director praising the mayor."I applaud Mayor Hahn for traveling around the globe to sell the benefits of all our airports," LydiaKennard said in the release.

the DWP, meanwhile picked up $14,218.40 in air fares and hotel bills for Fleishman employees. The department paid $24.40 for a photographer to shoot a picture of Hahn signing an agreement in Hong Kong. And it paid $7,920 to distribute news of Hahn's activities, among other costs.

Closer to home Fleishman was helping hahn take advantage of public relations opportunities provided by the utility records show.

In January 200 according to several e-mails, Deputy Mayor Edwards asked for a meeting with Fleishman staff that was expressly aimed at finding "media opportunities" for Hahn in the upcoming year. The mayor's office hosted the meeting on Jan. 10.

Dowie, whoregularly billed the department upward of $1,000 for three-hour "strategy" sessions, was there. So too was a Fleishman staffer named Shannon Murphy, a former television newscast producer, who records show was in nearlyconstant communication with hahn's office.

Co-workers joked that Murphy's office at Fleishman's suite in the Arco Plaza downtown was an annex to the mayor's office, according to her former colleagues.

Month after month, she was among the highest-billing Fleishman employees working on the DWP accountrecords show.

Murphy, who was promoted twice for her work at Fleishman, would later leave the firm to head up Hahn's communications office, a jpob she still holds. She declined to comment.

Days after the january meeting-which, according to Fleishman's bills, lasted two hours and cost the DWP$2,300 - the firm drew up a three-page memo for the mayor's office, outlining "media opportunities" for hahn at the DWP.

Fleishman proposed to write an opinion piece for the mayor about water, and organize events in City Hall and in Sacramento where he could talk about solar power and water.

"We will develop some other ideas that will position the mayor as a leader on water issues, "the firm promised in the memo.

In some cases, e-mails and billing records show, Hahn's office requested news conferences.

When the mayor wanted to unveil a water park in the San Fernando Valley, for example, a hahn aide e-mailed Murphy in February 200 "Any information FH could provide would be appreciated."

Most of the annoucements had some link to the DWP's work.

"The mayor of te city should be at those events, "Hahn said. " I think that those issues benefited from me being there."

But when his office worked with Fleishman to set up a news conference, Hahn, not the utility, was usually the center of the event.

In the two-page news release about Hahn's March 2003 announcement on removing shoes from power lines, the DWP was mentioned only at the bottom, after the mayor, the local councilman and the police chief.

In fact most news releases associated with Fleishman-organized events either quoted Hahn taking credit for initiatives or quoted other people praising the mayor.

When Hahn announced a new program to add lighting in city parks, the recreation and parks director was uoted as saying, "We appreciate the mayor's emphasis on making parks safe." and hahn took the opportunity to crow about his commitment to public safety - "a top priority of my administration."

The DWP paid Fleishman more than $10,000 to put together the event.

The department also picked up the tab when the mayor wanted to hold news conferences announcing new solar panels at the zoo and a new water system in the Valley.

Planning for the zoo event cost the department nealy $8,000, while the recycled water event cost more than $16,000.

Neither event was ever held, according to the DWP.

Even when Hahn's office didn't specifically request a news conference. Fleishman staff checked in with the office, if the firm was putting together a news event for he DWP, e-mails show.

When the DWP signed an agreement with Long Beach to develop a desalination plant, Fleishman asked if Hahn wanted to be mentioned in the news release. "The action today is a good enry point for the mayor to get into in the long-term water supply story, "a Fleishman staffer counseled in an e-mail.
When the DWP was preparing to announce a project to improve water quality at the Encino reservoir on the eve of the Valleysecession vote, Murphy suggested that hahn get involved "since this ties so well to the mayor's anti-secession platform."

"I'll keep you in the loop and work with you to secure approval on quoted in the press materials so the mayor can be credited fr his involvement on this initiative," Murphy wrote.

In the end, Hahn participated in neither event.The relationship between Hahn and Fleishman was so close, records show, that the department was cut out of the loop as his office and the firm worked out the mayor's public relations moves.

When hahn sent a letter to the DWP in the fall of 2002 asking the department to develop more renewable energy sources, such as solar or wind projects. Fleishman was asked to write up the news release announcing the mayor's action.

A Fleishman staffer e-mailed the final fraft to the mayor's office just before it was released. But the DWP appeared to be `an afterthought.

"Are you running this by the department before sending it?" the Fleishman staffer wrote to one of Hahn's aides. "We have not."

The two-page news release cost the DWP $!,037.50.

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