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DEFENSE OPENS CASE IN SEIFERT/EARLY TRIAL

Witness Criticizes Whistle-Blower Who Triggered Investigation

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NEW YORK (AdAge.com) -- Testifying for the defense in the Shona Seifert/Thomas Early trial yesterday, a former White House drug office official criticized the federal whistle-blower who triggered the criminal investigation of Ogilvy & Mather's account billings.
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Full Background:
BACKGROUND: THE WHITE HOUSE DRUG OFFICE ADVERTISING CASE
The Stories From 2001 to the Present

Read the 14-page indictment .pdf

Appearing after two defense character witnesses came off the stand, Alan Levitt, the former media director of the Office of National Drug Control, said Richard Pleffner had a history of withholding payments to advertising agencies and often "made [contractual] interpretations that made it impossible to run the campaigns."

Key role
Mr. Pleffner of the ONDCP administered Ogilvy's $150 million-a-year advertising account. He is also the person who in 2000 reported Ogilvy account timesheet inconsistencies to both his superiors and the General Accounting Office, the accounting arm of Congress.

Mr. Levitt characterized Mr. Pleffner as a bureaucratic nit-picker who was too hard on the agencies that developed the program's anti-drug advertising. Mr. Levitt also praised Ogilvy's performance on the contract.

"There were dozens of contractors and subcontractors who complained [about Mr. Pleffner's rulings]," Mr. Levitt said. "He was overruled many times."

As a direct result of Mr. Pleffner's complaints about Ogilvy's ONDCP vouchers and timesheets, the GAO began an inquiry that led to the charges for which Ms. Seifert and Mr. Early are now standing trial. Ms. Seifert, a former senior partner and executive group director at Ogilvy, New York, and Thomas Early, that office's former chief financial officer, have pleaded not guilty to an 11-count indictment accusing them of conspiracy in making false billing claims against the federal government for the ONDCP account.

Three guilty pleas
The same investigation also brought at least three guilty pleas from lower-level Ogilvy employees and numerous admissions of timesheet falsification on the account.

Yet federal prosecutors trying Ms. Seifert and Mr. Early did not call Mr. Pleffner as a witness during the seven days in which they presented their case, which ended this morning.

Earlier this week, it became known that Mr. Pleffner tried to sue Ogilvy under a federal law that enables whistle-blowers to potentially share in any money recovered from cases of fraud against the government.

Twice Ms. Seifert's attorneys have tried to admit this lawsuit, dismissed last year by a federal judge, into evidence, and twice U.S. District Court Judge Richard Berman has blocked it.

Federal contract regulations
Despite his absence from the trial, Mr. Pleffner has emerged as a major figure in it and a character known for his attention to the letter of federal contract regulations.

Earlier this week, Helen Ripka, manager of account systems at Ogilvy, read a February 2000 e-mail in which she wrote, "I'm really wanting to slit my wrists over this stuff," referring to the billing issues Mr. Pleffner oversaw. A June 2000 e-mail from Ms. Seifert has surfaced in which she wrote, "I don't want Rick [Pleffner] to send me to jail over this." According to a witness, Ogilvy senior partner Lily Pu, the line was a reference to a running joke within the agency.

In his defense testimony, Mr. Levitt spoke glowingly of Ms. Seifert and her staff as he described the many hours they spent organizing the kickoff of the national phase of the anti-drug campaign in 1999, entailing a massive press conference and numerous trips to Washington, D.C. He said Ogilvy helped save the government money by actually exceeding the congressionally mandated pro bono match component of the contract -- essentially a 2-for-1 deal with the media companies selling time for the anti-drug messages.

Ethnic work
And he added that Ogilvy's work on targeting consumers by ethnic categories was crucial.

"In a sense, they saved the campaign," he said.

During cross-examination, assistant U.S. attorney Kim Berger asked Mr. Levitt whether his defense of Ogilvy came from his desire to avoid further bad press for the White House drug office advertising campaign that has been controversial from the start.

Mr. Levitt admitted he feared bad publicity, but added, "I had serious reservations about the allegations."

The exchange between Ms. Berger and Mr. Levitt was contentious. Ms. Berger was able to draw out some semblance of an acknowledgement that there was a billing problem with an October 26, 2000, e-mail from Mr. Levitt to Mr. Pleffner.

Strict enforcement
During re-direct questioning from a defense attorney, Mr. Levitt went through examples of Mr. Pleffner's strictness. "Some [agencies] stopped doing work for [the Partnership for a Drug-Free America] because of withholdings [of payment]," he said.

Mr. Levitt's testimony was the liveliest part of the first day of the defense's case, which otherwise involved character witnesses testifying to Ms. Seifert's personal and professional integrity.

Testimony will resume Feb. 15, possibly with former Ad Council president Ruth Wooden, who has been called as an expert witness on behalf of Ms. Seifert.

However, before direct examination began, Ms. Wooden was excused from the stand following the revelation that she had dealings with Ogilvy and the ONDCP when she led the Ad Council.

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