TRIAL OF PR EXECS ENDING DEFENSE, PROSECUTION OFFER CLOSING ARGUMENTS.

Byline: BETH BARRETT Staff Writer

Before a crowded federal courtroom, lawyers defended two former Fleishman-Hillard executives charged with overbilling the city DWP and other clients, saying they had no motive to risk their reputations and freedom by overcharging clients a fraction of their total bills.

Because Doug Dowie and John Stodder didn't take the stand in the five-week trial, their lawyers' closing statements provided the most comprehensive insight into their defense against witnesses, e-mails and billing documents that the prosecution said showed a conspiracy to overcharge clients and defraud the Department of Water and Power by more than $300,000.

``This is a case based on innuendo, guesswork and argument,'' Nicola Hanna of Gibson, Dunn & Crutcher said in closing arguments on behalf of Dowie, 58, the former head of Fleishman-Hillard's Los Angeles office.

Hanna told jurors that Dowie, a former managing editor at the Los Angeles Daily News and ex-chief of staff to former state Assemblyman Richard Katz, who was in the audience, didn't make ``a cent'' from the purported fraud, and that none of the 15 prosecution witnesses testified that Dowie told them to overbill.

``The government would have you believe (Dowie) was a scam artist and crook ... who would risk jail and public humiliation for a few bucks that would not even go into (his) pockets. Why would (he) risk everything for a fraction of a fraction (of total billings)?

``It would be like Tiger Woods kicking a ball a little closer to a hole,'' Hanna told jurors.

But in countering those arguments, Assistant U.S. Attorney Adam Kamenstein said defense attorneys appeared to have ``witnessed a different case.''

He said the case was basically simple and came down to two things: ``First-grade morals and third-grade math.''

He said grade-schoolers know what the defendants did was wrong -- that you can't lie and cheat and charge people for more time than was actually worked.

But Hanna argued in his two-hour closing statement that in the absence of motive, eye witnesses, tape recordings, fingerprints or a criminal history, federal prosecutors leaned on the testimony of ``three scared and intimidated witnesses'' who cut a deal with the government.

He said prosecutors also relied on e-mails that were taken out of context to suggest bills were padded even though they didn't raise red flags with Dowie's superiors at company headquarters in St. Louis.

Jan Handzlik of the firm Howrey argued that Stodder was acting ``in good faith'' in trying to capture hours that had been worked but weren't billed.

He called Stodder, 50, a ``good man,'' who worked hard and tried to make sure his subordinates did the same, and got all their time in -- even offering pizza to those working on the DWP accounts if they had to stay late to finish.

``The government would have you believe that John Stodder checked his reputation at the door when he walked into Fleishman-Hillard, (and said), `I'm going to start ripping off clients,''' Handzlik said in his two-hour presentation to jurors.

``Why did they have to work so hard if all they needed is a pencil to `write-up' (the accounts)? ... Why bother with all these hours, the all-nighters? Why didn't they knock off at 2 p.m. and go to the beach? A movie?''

Handzlik said Stodder walked into a ``mess'' of a billing system at the firm, but never realized any ``personal gain.''

``John Stodder had a good-faith belief hours were worked.''

Handzlik said the bills with the handwritten entries that prosecutors allege were fraudulent were submitted twice to City Controller Laura Chick, and that there was no secret about writing up accounts in the office, or in e-mails to St. Louis.

But Kamenstein said Dowie was the ``common denominator'' in a conspiracy involving Steve Sugerman, a former executive, who pleaded guilty to three counts of wire fraud in agreeing to cooperate with the government, and Stodder who took over his job.

Defense lawyers noted Sugerman didn't plead guilty to conspiracy.

And Kamenstein said that while Dowie may never have used words to the effect of committing fraud, ``the message was clear.''

The prosecutor called a series of e-mails, the bulk on Jan. 6, 2003, a ``wonderful portal'' into the minds of the defendants after they were notified that the L.A. office had a $59,000 gap to make up to meet December revenue projections.

But Hanna called the e-mails ``sound bites'' that didn't necessarily provide the entire context of what was going on and only showed the defendants felt they were doing nothing wrong and had nothing to hide, because the e-mails were forwarded to St. Louis.

During weeks of testimony before U.S. District Judge Gary Allen Feess, former executives also testified they were asked to inflate bills, or had their accounts written up without their consent, for the Port of Los Angeles, Worldwide Church of God and architect Frank Gehry's firm.

The charges grew out of a sweeping federal-state investigation into accusations that former Mayor James Hahn's administration engaged in ``pay-to-play'' practices.

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