Pubdate: Tue, 12 Dec 2000
Source: Boston Globe (MA)
Copyright: 2000 Globe Newspaper Company.
Contact:  P.O. Box 2378, Boston, MA 02107-2378
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Author: John Donnelly, Globe Staff

US MAY BE OVERBILLED IN DRUG CAMPAIGN

WASHINGTON - A New York advertising firm in control of the Clinton
administration's antidrug media campaign acknowledged ''possible errors'' in
its bills to the government during a meeting Nov. 29 with Justice Department
litigators, officials confirmed yesterday.

Ogilvy & Mather said in a statement last night that it voluntarily
approached the civil division of the Justice Department, but the company
refused to give details on the questionable billings to the White House
Office of National Drug Control Policy. A past analysis alleged that the
firm could be overbilling the government by several million dollars.

For the past two years, the firm has managed the government's $1 billion
advertising antidrug campaign that has featured dramatic television
advertisements, including one in which actress Rachel Leigh Cooke uses a
frying pan to destroy a kitchen and a voice-over says, ''This is what
happens to your brain after snorting heroin.''

The billing practices of the company, which has charged the government an
annual fee of $1.6 million plus more than $15 million annually in labor
costs, were scrutinized by a congressional oversight committee in September
and are under investigation by the General Accounting Office.

Robert H. Hast, the GAO investigator overseeing the Ogilvy probe, said the
investigation was continuing, and declined further comment. Representative
John L. Mica, chairman of the Subcommittee on Criminal Justice, Drug Policy
and Human Resources, was traveling in Italy and could not be reached for
comment.

The US drug control policy office, in a statement approved by director Barry
R. McCaffrey, said that Ogilvy ''disclosed, to government contracting
officials, concerns about their internal accounting system. We consider this
a positive step to resolve cost issues.''

The issue first arose months ago. An Ogilvy whistle-blower last March told
US officials that ''time sheets were altered to increase the number of hours
worked against the ONDCP contract,'' according to an April 13 memo written
by Richard Pleffner, who helped manage the Ogilvy account in the antidrug
office. But despite the concerns raised by Pleffner, who declined to comment
yesterday, the antidrug office defended Ogilvy for months.

McCaffrey said in an interview with the Washington Post in September, ''I
have no reason to suspect this isn't one of the finest firms in the country.
I love these people.'' And Alan Levitt, director of the National Youth
Anti-Drug Campaign, told Mica's committee in September, ''There is
absolutely no overbilling.''

The Ogilvy statement said it requested a meeting with the Justice Department
because ''our failure to tightly administer some accounting aspects of the
contract is not acceptable to us. ... At that meeting on Nov. 29, we
informed the Justice Department of possible errors in the billing process
and made it clear that we wanted to work with the contracting officer to
identify and resolve any mistakes that may have occurred.''
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