By AP/KWMU
Los Angeles, CA – The St. Louis-based public relations firm Fleishman-Hillard has agreed to pay $5.7 million to settle a lawsuit with the City of Los Angeles.
The lawsuit claims the company defrauded city departments by padding hours and inflating monthly bills. Fleishman billed the city for more than $20 million over seven years.
Most of the settlement money, about $5.5 million, will be paid to the L.A. Department of Water and Power. The remainder will be split among the agencies that oversee the airports, harbor and visitors bureau.
Under terms of the deal, the company will pay $4.5 million in two installments and forfeit close to $1.2 million in unpaid invoices, said Teree Bowers, chief deputy city attorney. All four city agencies must ratify the deal.
Fleishman-Hillard wanted to settle because some of the billing by former employees fell below its standards, according to General Manager Richard Kline. The company also worried about litigation costs and damage to its reputation and business in the event of a trial.
The lawsuit claimed workers at the firm double charged for work that wasn't done and padded hours. It sought unspecified reimbursements and damages. The city had identified approximately $850,000 in questionable billing but negotiated for a larger settlement to account for penalties, officials said.