Posted on 04/12/2005 12:18:04 PM PDT by BurbankKarl
The federal investigation of City Hall corruption will lead to a second indictment soon in connection with alleged overbilling of the Los Angeles Department of Water and Power by the Fleishman-Hillard public-relations firm, Assistant U.S. Attorney Adam D. Kamenstein disclosed in court Monday. Kamenstein told U.S. District Court Judge Gary Feess that there would be a superseding indictment, which would add one other individual as a defendant, in the 11-count wire-fraud case against John Stodder, a former senior vice president at Fleishman-Hillard.
Kamenstein offered no other details beyond indicating that the indictment could come down before the May 17 runoff election between Mayor James Hahn and Councilman Antonio Villaraigosa. During the primary and now in the runoff, Hahn has tried to fend off repeated attacks that his administration is the most-investigated one since the City Hall scandals of the 1930s. Laurie Levenson, a former federal prosecutor and Loyola Law School professor, said the disclosure indicates more people are cooperating "or they would have been named in the first indictment."
"They'll continue to do the squeeze play."
Levenson said another indictment - even if it doesn't involve a current or former Hahn administration official - would hurt the mayor politically.
"It's all bad for Hahn," she said. "It's like picking the scab off and constantly reminding people of corruption."
Hahn's spokesman, Deputy Mayor Doane Liu, said the indictment "has nothing to do with the mayor," who has repeatedly said no evidence has surfaced to show that anyone in his administration was engaged in "pay-to-play" contracting deals for campaign funds or in other forms of public corruption.
"The city of Los Angeles and the ratepayers are the victims here, and he (Hahn) is demanding that they be repaid and that justice be served," Liu said.
Fleishman-Hillard was accused in City Controller Laura Chick's audit of overbilling by more than $4 million in a series of city contracts worth nearly $25 million, mostly with the DWP. The firm maintained close ties with key Hahn aides, providing extensive free political advice and billing the DWP for hundreds of thousands of dollars in public-relations work that directly benefited the mayor.
Liu said Hahn's position is that the city must get its money back, "and anyone who's stolen from the ratepayers should be punished."
The indictment is expected either at the end of this month or by the end of May at the latest. Kamenstein, in an interview after the hearing, said the timing is contingent solely on his schedule.
The disclosures came during a status conference for Stodder - who pleaded not guilty in February to the charges - amid a discussion of factors that might affect his Aug. 2 trial date.
Generally, new charges or new defendants - or both - are added in an indictment that supersedes an earlier one. Kamenstein made it clear this one would involve a new individual.
The Jan. 13 indictment of Stodder claimed that two unnamed "co-schemers" were involved in padding Fleishman-Hillard's bills submitted each month to the DWP, the Port of Los Angeles, the World Wide Church of God and architect Frank Gehry's firm.
The indictment specifically accuses Stodder of directing employees to pad their DWP billings by a total of $250,000.
Stodder attorney Jan Handzlik said he had no comment on Monday's court proceedings. Attorneys representing former Fleishman-Hillard executives involved in the investigations also said they were caught off guard by the announcement. They said none of them had been notified that one of their clients might be indicted.
Company officials have acknowledged overbilling of about $600,000 but have denied there was any pattern of misconduct or that top management was aware of any problems.
Richard S. Kline, Fleishman-Hillard's regional president and senior partner, said he had no information regarding the latest announcement of a new indictment.
"Any comment about the grand jury investigation and actions arising from (it) should come from authorities. The company has been cooperating with authorities since the investigation began months ago, and we'll continue to cooperate fully.
"This is now a matter for the justice system."
Just another "good-ole-boy" quid-pro-quo relationship uncovered, but gotta prosecute to make it look like simple crime...the good ole "pay-to-play" government style of the infamous Gray Davis, arch-crook and extortionist of California government.
Riordan was similarly using the LADWP as a cash cow at California's expense. Theirs were among the worst of the trading speculators.
Democrats aren't alone in this kind of corruption. Arnold runs with the same people Davis did, particularly at the NRDC.
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