Omnicom PR Shop in $4.5m 'Overbilling' Settlement

21 April 2005

In yet another instance of what many fear could be the tip of an industry iceberg - agency overbilling practices - Omnicom Group's public relations network Fleishman-Hillard has agreed to pay $4.5 million (€3.45m; £2.35m) to ex-client, the City of Los Angeles.

The payment is in settlement of allegations it had overbilled LA's Department of Water and Power and other city accounts. Although it had previously disputed the accusations, F-H on Tuesday issued a press statement containing a formal apology to the city.

This acknowledged the size of the settlement, calling it a "substantial payment". The agency also conceded that "some senior executives of [its] Los Angeles office, who are no longer with the firm, caused certain bills to be presented to the city that appear to be improper and indefensible."

The settlement payment, which has to be approved by city agencies, is not the end of the affair which has already resulted in the indictment of one Fleishman executive. Prosecutors have suggested that more charges are on the cards.

Data sourced from AdAge (USA); additional content by WARC staff