E-MAILS IMPLY DOWIE KNEW OF OVERBILLING.

Byline: BETH BARRETT Staff Writer

Federal prosecutors' month-long case against two former Fleishman-Hillard executives culminated Friday with videotaped testimony by the firm's former head, e-mails referring to ``phony hours'' by a former colleague and a timeline outlining a hasty effort to scrape up thousands of dollars in extra P.R. billings in early 2003.

In a taped deposition in an unrelated civil case, played for the jury, defendant Doug Dowie, formerly head of the firm's L.A. office, acknowledged that in October 2003 then-senior vice president Fred Muir made accusations ``along that line'' of Department of Water and Power bills being inflated.

``I immediately launched an inquiry,'' Dowie said in his deposition in the civil case.

When company attorney Mark Beck asked if he had notified his bosses in writing, Dowie answered, ``No, I didn't.''

The question of when Dowie knew about inflating bills and what his role was has come up repeatedly.

Former vice president Monique Moret, testifying earlier this month with immunity, said Dowie called her, co-defendant John Stodder and Matt Middlebrook - former Mayor James Hahn's spokesman - into a meeting after Muir left.

She said Stodder confirmed the DWP bills were being inflated and that Dowie asked by how much and whether Muir had any evidence. Muir testified he wrote up some bills at Stodder's direction for time not worked.

He said that after Dowie threatened to sue him for taking business from the firm, he retaliated by saying he would reveal fraudulent billing practices.

Tom Holliday, one of Dowie's attorneys, said all issues raised by prosecutors will be dealt with when the defense begins its case next week.

Dowie and Stodder have pleaded not guilty to charges of bilking the city's Department of Water and Power out of more than $300,000 and overcharging the Port of Los Angeles, architect Frank Gehry's firm, and the Worldwide Church of God.

Prosecutors on Friday showed the jury e-mails from Mark Barnhill, a former Fleishman-Hillard executive who went to work for one of the firm's clients at the time, Platinum Equity of Beverly Hills.

Barnhill complained to Dowie in a September 2002 e-mail that nearly $100,000 in billed work for Platinum had not been authorized or performed.

Barnhill, a friend of Dowie's and co-worker both at the Los Angeles Daily News and Fleishman-Hillard, said in a Jan. 30, 2003, e-mail to Dowie that $75,000 should be written off Platinum's bill. He called the write-off ``charitable,'' considering the poor quality of the work and the ``phony hours.''

Prosecutors also submitted a timeline, bolstered by a flurry of Jan. 6, 2003, e-mails in which Dowie was alerted by a company official that the L.A. office was $59,000 short of its December revenue projections.

Dowie e-mailed Stodder, asking how much they could ``pad'' the DWP account with ``ambiguous counseling for the mayor (Hahn)'' and two former top-ranking utility officials. ``Could it withstand another $30k?''

Stodder quickly e-mailed back, ``We've pretty much done that,'' noting that was how the DWP billings had been increased to $239,000 for December.

Stodder cautioned that $30,000 seemed like ``more than the system could bear.'' Dowie e-mailed back in a few minutes, ``How much will it bear?''

Within 10 minutes, Stodder responded that Moret thought she could slip through another $15,000, which ``she'll add across the board.''

``OK let's do it,'' Dowie e-mailed back.

The next day, Moret e-mailed Dowie and Stodder that $15,165 had been added to the DWP December billings.

FBI agent Dane B. Costley said in reviewing the DWP billing sheets for that month, $25,000 had been added in hand-written entries prior to the string of e-mails. Afterward, he said, about $15,000 in additional hand-written entries were made.

The trial continues Tuesday.

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