How seriously do the bosses back at Fleishman-Hillard headquarters take the public relations agency's media hits here in Los Angeles? Pretty seriously, according to a story in today's St. Louis Post-Dispatch.

In an irony for public-relations giant Fleishman-Hillard Inc., a PR problem that might be out of the firm's control threatens to tarnish a strong reputation built over six decades.

Founded in St. Louis shortly after World War II, Fleishman-Hillard has been one of the fastest-growing communications firms in the world. It operates more than 80 offices worldwide, and it represents some of the most recognized brands in the world, including Procter & Gamble Co. and Wal-Mart Stores Inc.

Last week, the firm said it would terminate its contracts with three Los Angeles city agencies, shortly after federal prosecutors subpoenaed the firm for records as part of an investigation into possible government corruption in Los Angeles...

If improprieties are found, the consequences could be dire, said Dean Kruckeberg, a communications professor at the University of Northern Iowa. "Hypothetically, something like this would have the same effect as an Arthur Andersen."

Fleishman-Hillard has become a favorite target in the Los Angeles media. The Los Angeles Daily News referred to the DWP as the "Department of Water and Public Relations." A recent political cartoon by Patrick O'Connor in that paper showed a snake labeled "Public Relations" in an open manhole, with a nearby cover labeled "Department of Water and Power."

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Fleishman-Hillard Regional President Bill Anderson said the firm takes the situation in Los Angeles seriously. "Reputation is truly a fragile thing," said Anderson, who works in the St. Louis office. "If you asked if we're concerned about potential reputation damage from LA, we'd have to say absolutely."

In the piece, one PR industry watcher calls it a mere distraction for Fleishman that will blow over soon. But the editor of the Holmes Report newsletter says: "I think it's fair to say that it's become a bigger deal than anybody in St. Louis or senior management initially thought it would." Joseph Kessler, a competitor of Fleishman as president of the L.A. office of Weber Shandwick Worldwide, is also quoted.