Rep. Mark Souder, R-Ind., chairman of the government reform committee panel, warned drug office executives last week to prepare to transition the account from Ogilvy.
"There is going to have to be some sort of adjustment in the contract," he said at a hearing of a House Government Reform panel, adding that "the will of the House is strong" for change, and that the Senate seems likely to pass some restrictions on Ogilvy as well.
The hearing followed House action July 24 approving an appropriations bill containing an amendment that bans Ogilvy from receiving government funds after Oct. 1. The bill is now with the Senate AdAge.com QwikFIND aan81o.
U.S. Rep. Bob Barr, R-Ga., a vocal critic of Ogilvy's win, proposed the amendment. Ogilvy, which originally won the contract for the White House anti-drug account in 1999, was re-hired to administer the account earlier this month after a review. Ogilvy earlier paid $1.8 million to settle civil allegations that it over-billed the government; a criminal investigation into the alleged alterations of employee time sheets continues.
Christopher M. Marston, deputy chief of staff for the drug office, testified at the hearing and warned that firing Ogilvy would disrupt the anti-drug campaign. The effort would continue, he said, but with a reduced presence that would not include magazine, Internet, multicultural or local advertising.
Ogilvy & Mather wrote a letter to the U.S. Navy, which administers the contract, seeking reassurance that it wouldn't be risking its own money when it advances payment to media companies for fall and winter ad buys next month.
The letter from Alfred Wurglitz, an attorney for Ogilvy, termed the amendment "unconstitutional" and also an unfair reaction to Ogilvy's agreement to settle the civil allegations. "Hundreds of government contractors maintain contracts having committed far worse errors," he wrote in the letter.
Congressmen were skeptical of claims that an agency change would harm the program. Albert J. Martin, president of agency consultancy A.J. Martin and Associates, testified that an agency change could be accomplished quickly.
Rep. Barr called for the replacement of Ogilvy. "They have basically ripped off the taxpayers of the country," Rep. Barr said. "Let's stop worrying about Ogilvy & Mather and start worrying about America," he said.
Rep. Elijah Cummings, D-Md., accused Rep. Barr of acting in a way that would hurt the campaign and cause problems "difficult to surmount."
In a statement, reacting to the House amendment, Ogilvy said, "We are a fully qualified federal contractor having passed scrutiny of all relevant agencies. We won an open and fair competition on the merits."