PR EXEC: CAMPAIGN REIMBURSEMENTS POSSIBLE DEPOSITION ALLEGATION WOULD VIOLATE MONEY-LAUNDERING LAW.

Byline: Rick Orlov Staff Writer

A top Fleishman-Hillard executive said in a deposition that he believes his firm reimbursed some employees for contributions they made to local political campaigns - an action city officials said would violate money- laundering laws.

The statement by Frederic Rohlfing, chief financial officer of Fleishman- Hillard, came during a deposition given Sept. 7 in a wrongful-termination suit filed by Doug Dowie, the former head of the firm's Los Angeles office. Dowie was fired during the ongoing investigation into allegations of a ``pay-to-play'' scandal at City Hall.

He subsequently was indicted on 16 felony counts of overbilling the city Department of Water and Power and other clients, and has pleaded not guilty.

Dowie appeared Monday in federal court, where he sought permission to use the results of privately administered lie-detector tests in his defense against the criminal charges. District Court Judge Gary Feess took the matter under submission, but said he doubted whether he would ultimately admit the polygraph results as evidence.

Dowie was an ally of former Mayor James Hahn, and the relationship between Fleishman-Hillard and City Hall is among those being investigated by federal and county prosecutors looking into allegations that firms contributed to political campaigns in order to win city contracts.

In the deposition obtained by the Daily News, Rohlfing said the firm may have reimbursed five or six workers in Fleishman-Hillard's Los Angeles office for contributions to local political campaigns.

Any campaign contribution reimbursement would be construed as money laundering, according to city Ethics Commission spokesman David Tristan. While he refused to comment on the Fleishman case, he said the panel has filed charges against other individuals under similar circumstances.

``The city law makes it clear that it wants individual contributors identified,'' Tristan said.

Federal officials would not say whether the campaign reimbursement is part of their ongoing investigation in the pay-to-play allegations.

But Dowie's attorney, Mike Faber, said Rohlfing's deposition could be used to bolster his client's wrongful-termination lawsuit, and he plans to seek permission to include Rohlfing's recent deposition in his case.

``It now appears that one of the reasons (Dowie) was fired was so that Fleishman could conceal laundering of campaign contributions,'' Faber said.

Rohlfing said in the deposition that Dowie was fired to try to protect the company's reputation - the same reason the firm agreed to pay the city $4.6 million in overbillings and to waive $2 million more in fees.

Richard Kline, who took over as head of the Los Angeles office after Dowie, said the firm would not tolerate any improper behavior, including reimbursements for campaign contributions.

``Any suggestion that any senior Fleishman-Hillard official, outside of Los Angeles, was responsible for reimbursing employees is utterly false,'' Kline said.

But Faber said Dowie had told FBI investigators that he suspected that the company had reimbursed workers for their contributions to political campaigns in 2001 - a time when the St. Louis-based company was not giving performance bonuses.

``Doug had prepared a memo for a meeting in St. Louis where he wrote about the outstanding effort of his team in Los Angeles and how hard they were working, including giving personal contributions,'' Faber said.

``(Dowie) hadn't asked for any bonuses but he was later asked for specifics on the employees and how much was contributed. A few weeks later, he received a mailing with individually sealed envelopes for each of those workers.''

Faber said Dowie cautioned officials about the reimbursements after one of the workers raised the issue with him.

``He was admonished and told to deliver the envelopes,'' Faber said.

Rohlfing, who said he did not personally sign any of the checks, recalled they were for sometimes-odd amounts ranging from $1,000 to $7,000.

``Has it ever come to your attention that the checks were in reimbursement of campaign contributions?'' Faber asked him during the deposition.

``As I looked at those transactions this last year, I thought that was a possibility,'' Rohlfing said, adding that he looked into it further, getting a copy of nonregular payroll transactions and details of the campaign contributions.

Rohlfing said other officials with the firm told him there was no direct connection, but he remained concerned and turned it over to a private law firm investigating the firm's role in pay-to-play and any overbillings.

Rick Orlov, [phone]

rick.orlov(at)dailynews.com