Pubdate: Wed, 07 Jan 2004 Source: Financial Times (UK) Copyright: The Financial Times Limited 2004 Contact: http://www.ft.com/ Details: http://www.mapinc.org/media/154 Author: Alison Beard Cited: Office of National Drug Control Policy ( www.whitehousedrugpolicy.gov ) Bookmark: http://www.mapinc.org/campaign.htm (ONDCP Media Campaign) CHARGES OVER OGILVY DRUG ADS: Two Executives Accused Of Conspiring To Fake Documents To Overcharge Government For Media Campaign NEW YORK -- The finance director of Ogilvy & Mather, the WPP Group advertising agency, and a former executive were indicted yesterday on charges that they schemed to overcharge the US government for an anti-drug media campaign. Thomas Early, a senior partner at Ogilvy, and Shona Seifert, who left the agency to become president of Omnicom Group's TBWA/ Chiat/Day, are accused of instructing employees to revise time sheets from May 1999 through April 2000 and then submitting the false documents to the White House's Office of National Drug Control Policy. The indictment brings to a head a long-running controversy over Ogilvy's work for the ONDCP, which began in 1998 with a one-year contract to kick off a campaign expected to be worth Dollars 684m over five years. Government officials questioned the agency's billing practices as early as 2000, prompting the White House to withhold payments. In 2001, General Accounting Office investigators concluded that Ogilvy had overbilled the ONDCP by Dollars 7.6m and referred the case to the Justice Department. Ogilvy - which created the high-profile 2002 Superbowl television spot linking drug use to terrorism - continued to win renewals on the contract despite opposition from US legislators. But the agency did admit to record-keeping "missteps" and, in 2002, paid a Dollars 1.8m settlement to resolve civil charges. Ogilvy said yesterday it that was proud of its work for the ONDCP and the steps it had taken to improve its billing procedures. It added that if the charges against Mr Early and Ms Seifert are found to be true "their behaviour was inconsistent with the high standards the company promotes and maintains". Ms Seifert, who has been at TBWA since 2002, issued a statement denying any wrongdoing. Mr Early's lawyers could not be reached for comment. David Kelley, US Attorney for the Southern District of New York, has charged both executives with one count of conspiracy and 10 counts of false claims. If convicted, they face up to five years in prison and a Dollars 250,000 fine on each of the 11 counts. The court could also decide to make the monetary penalty equal to twice the gross gain or loss resulting from the crime. The case, due to be presented in a Manhattan court today, is likely to be watched closely by the advertising industry. Agencies face increasing pressure from clients to break down their billable costs and justify their fees. Ogilvy's initial contract with the ONDCP was a cost-plus-fixed-fee agreement that entitled the agency to be reimbursed for expenses incurred by employees working on the account. Mr Kelley alleges that Mr Early and Ms Seifert orchestrated their overcharging "scheme" after realising that labour billings were running significantly lower than they had expected. - --- MAP posted-by: Larry Stevens