UPDATE Hope Boonshaft, head of Hill & Knowlton’s L.A. office, said in an email that Steve Sugerman and his P.R. firm are not involved at all in the contract with the Harbor Department and will not be involved in any H&K dealings with the city or county of Los Angeles. “We have an alliance with The Sugerman group to help in our general public affairs and other offerings such as real estate and transportation …but nothing in the City of Los Angeles…nor so far with any government,” she said.
t seems like only yesterday that the city banned public relations
contracts with private firms after the uproar over the
DWP/Fleishman-Hilliard scandal but it’s been three years so I guess the
statute of limitations has run out.
What other explanation could there be for the recent approval by the
Harbor Commission of contracts worth $1.3 million, and probably more
over time, to well-connected public relations firms Hill & Knowlton
and the Rogers Group. Insider connections and looking after pals? Money
to burn with a $4 billion port expansion in the works?
I know $1.3 million doesn’t sound like much these days but it’s 50
percent more than the city could scrounge up to keep some parks in
tough parts of town open until midnight this summer — a program
critics mock as an economic stimulus by spurring late-night drug sales
by gang members.
And why shouldn’t gangsters get rich if City Hall is going to pump
money into P.R. firms that are going through a rough time during the
It makes me wonder if the hoodlums have the same kind of insider
influence that helped the Rogers Group and Hill & Knowlton land the
port contracts to do what sounds like pretty routine tasks properly
done by the executives and officials of the Harbor who are handsomely
rewarded for whatever it is they do.
Supposedly, these firms will “develop a public outreach and education
program to promote its new Clean Air Action Plan…(and) develop
additional efforts, and create an informational program to help the
port get more federal funds for its programs,” according to Rick Orlov’s story in the Daily News.
Mayor Antonio Villaraigosa is going to have to decide whether to go back to the bad old days and end the ban on these P.R. deals that was imposed after the DWP’s sweetheart
contract with Fleishman Hillard led to criminal investigations and the
conviction of three of the P.R. firm’s executives and a $6 million
settlement from the company.
I attacked the Fleishman-Hillard contract with DWP long before it got
swept into the Hahn administration’s pay-to-play scandal and led to the
conviction of a longtime friend, Doug Dowie.
He got nailed because the executive in charge of the DWP account, after
repeatedly denying wrongdoing, rolled over and told federal
investigators that he interpreted things Dowie said as meaning he was
supposed to fabricate bills to show the P.R. firm earned its $250,000 a
Sugerman pleaded guilty in a deal with prosecutors and got probation
but things have turned out good for him. Right after the deal, former
mayoral candidate Steve Soboroff renewed his contract to help promote
the massive Playa
Vista development on the Westside. Now a registered City Hall lobbyist,
Sugerman has parlayed that into other
contracts that have taken him back inside the game while his cohorts, Dowie and John Stodder, are struggling to pay their bills while
appealing their convictions.
connections run deep in City Hall. He was a deputy mayor in the Riordan
Administration before joining Fleishman-Hillard. He was tight with DWP
General Manager S. David Freeman, which helped him land the
lucrative P.R. contract with the utility.
Maybe it’s only coincidence that Freeman heads the Harbor Commission
that approved the new contract just six months after that Hill &
Knowlton proudly announced it had formed a strategic partnership with
Sugerman for the specific purpose of providing a short-cut for
expanding into the public sphere, as H&K’s local general manager
Hope Boonshaft told the L.A. Business Journal.
“Steve is not only really smart, he’s a good guy, a good practitioner,”
said Boonshaft. “People make mistakes and it’s time to put those behind
and move on.”
The Business Journal reported the agency alliance breaks down
geographically. Sugerman brings expertise in dealing with politicians
and bureaucracy in Southern California, while H&K has offices
nationally and internationally that can provide service to his clients
Both companies will maintain their independence but “for the most part,
we’ll be collaborators” instead of competitors, Sugerman said
It’s safe to say that Sugerman’s being pals with Freeman didn’t hurt.
The only question left is whether the mayor will take the risk of
approving this deal and overturning the ban on hiring private P.R.
firms for city business.
Mayoral spokesman Matt Szabo told the Daily News the plans are being
reviewed to ensure they comply with city policy on community outreach
contracts. Szabo said the mayor wants to study the contracts and talk
with harbor officials about the need for outside firms