EX-P.R. EXEC PLEADS GUILTY IN DWP CASE.

Byline: Beth Barrett Staff Writer

A former Fleishman-Hillard public relations executive pleaded guilty Monday to three counts of wire fraud, admitting he bilked the Los Angeles Department of Water and Power out of tens of thousands of dollars and agreeing to cooperate with prosecutors in a criminal case against other former company officials.

Steve Sugarman, 41, of Los Angeles wore a dark blue suit as he stood next to his attorney and his wife, Ellen, and answered ``guilty'' three times in a clear voice before U.S. District Judge Gary Allen Feess.

``Steve did what he continues to believe was right,'' his lawyer Ellyn Garofalo, with the Westwood firm of Liner, Yankelevitz, Sunshine & Regenstreif, said after the hearing.

Sugarman, who left Mayor Richard Riordan's administration in 2000 to become a senior vice president for Fleishman-Hillard in charge of its lucrative public affairs practice in Los Angeles, declined comment except to say he continues to run his public relations firm. Sentencing was set for March 20. Sugarman faces a maximum sentence of 15 years in prison and a fine of $750,000, but prosecutors have agreed to recommend leniency in exchange for his complete cooperation.

Feess said he was not bound by the plea agreement, but would take prosecutors' recommendations and other factors into consideration in arriving at a ``reasonable sentence'' that could range from probation to the statutory maximum.

Sugarman's plea to the criminal information was monitored by lawyers for Doug Dowie, the former head of Fleishman-Hillard's L.A. office and an insider in Mayor James Hahn's administration. Dowie and former company executive John Stodder were indicted by a federal grand jury on conspiracy and wire fraud charges. Their trial is scheduled for Nov. 15.

Both Dowie, 57 of West Hills and Stodder, 49, of Palos Verdes Estates have pleaded not guilty.

In response to questions by Feess, Sugarman said overbillings were ``knowingly'' submitted to DWP on a number of occasions, typically when actual billings fell short of projections for the month.

In his plea agreement, Sugarman admitted to either directly increasing or causing another ``co-schemer'' to increase the number of hours DWP was fraudulently billed by more than $68,000 as part of a larger conspiracy to defraud the DWP.

Dowie and Stodder, who succeeded Sugarman in charge of Fleishman- Hillard's public affairs department, have been charged in connection with bilking the DWP of more than $300,000, as well as allegedly overbilling other clients.

Beth Barrett, [phone]

beth.barrett(at)dailynews.com