WITNESS FINDS HER CREDIBILITY UNDER ATTACK EX-PR OFFICIAL MORET SAYS SOME INFO WRONG.

Byline: JOSH KLEINBAUM Staff Writer

A defense attorney chipped at the credibility of a star prosecution witness Wednesday in the trial of two former Fleishman-Hillard executives accused of bilking the Department of Water and Power out of more than $300,000.

One day after former Fleishman-Hillard Vice President Monique Moret testified under immunity that she attended a meeting with defendants John Stodder and Doug Dowie in which Stodder admitted to an overbilling scheme, Moret admitted under cross-examination to giving government investigators incorrect information at least six times.

Dowie, who was head of the firm's Los Angeles office, and Stodder, who was a senior vice president with the company, are charged with conspiracy and wire fraud.

Moret, head of the firm's Public Affairs Group who managed its DWP account, has testified that she met revenue goals set by Stodder by billing the DWP for hours of work that were never performed - with the knowledge of Stodder and Dowie.

During the government's investigation into Fleishman-Hillard, Moret pored over the company's billing records with an FBI agent and an assistant U.S. attorney, pointing out instances in which she believed the firm inflated hours.

During cross-examination, however, Jan Handzlik, Stodder's attorney, showed inconsistencies in Moret's assessments.

He pointed out seven instances in which Moret said the company overbilled the DWP by inflating hours, a practice known within the company as "write-ups."

But e-mails and company records presented by Handzlik showed that, in those cases, the additional hours billed were to correct bookkeeping mistakes and were acceptable.

In tense exchanges, Moret admitted she was wrong in six of the seven cases. In one case, she said, she increased the billing for a Fleishman-Hillard employee from 30 minutes to an hour for a team meeting - a write-up she told investigators was not legitimate.

Under cross-examination, she admitted that records showed that other people at the meeting had billed for a full hour, and said she likely increased the hours because the employee had actually underbilled.

"It didn't take you very long to figure out while you're sitting up there that this was a legitimate write-up," Handzlik said to Moret. "What did it take, about two minutes? You were wrong about that statement, and you could've been wrong about a number of other statements."

Before attacking the inconsistencies, Handzlik questioned Moret about Fleishman-Hillard's billing, painting a picture of a confusing, disorganized system prone to errors.

Moret admitted that employees missed deadlines to enter billable hours, forgot to enter billable hours for meetings and entered different times for the same meeting. Write-ups were used to correct the mistakes, she said.

But she said there are good write-ups and bad write-ups, and that inflated billing was standard practice at Fleishman-Hillard when she arrived in September 2002.

She said it didn't occur to her that the practice was unethical until another executive, Fred Muir, resigned.

"It felt like it was a normal thing in the office," Moret said. "At that time, it did not occur to me that it was wrong."

Cross-examination of Moret is expected to continue today.

josh.kleinbaum(at)dailynews.com

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