HOUSE PASSES FUNDING BILL BARRING OGILVY PAYMENT

Amended Measure Aims at White House Drug Office Controversy

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WASHINGTON (AdAge.com) -- In a stinging slap to Ogilvy & Mather Worldwide, the House of Representatives this afternoon passed an appropriation bill amended to bar the WPP Group agency from being paid for its White House drug office work after Oct. 1.

The measure -- a treasury, postal and general appropriations bill that funds a variety of government functions, including the White House -- was passed by a vote of 308 to 121.

The bill nows goes to the Senate, where it is expected to quickly proceed to a House-Senate conference committee to resolve any final conflicts.

Ogilvy statement
In a statement 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."

The amendment, proposed by U.S. Rep. Bob Bar, R-Ga., was adopted earlier in the day by voice vote just three weeks after Ogilvy won the $152 million contract to handle the anti-drug campaign

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for up to five more years for the White House Office of National Drug Control Policy.

Then, even as they voted to choke off funds to the agency, Rep. Barr and several congressmen expressed strong support for the anti-drug advertising program itself. They emphasized that Ogilvy should not have been given the new contract.

Won't 'go dark'
The congressmen said they planned to alter the language in the House-Senate conference committee to ensure the drug office program would not "go dark" during a transition to a new agency.

"I wish to restore integrity to the media campaign. To ensure its ongoing success. Not to end it," said Rep. Barr. "It is time to draw a line in the sand and take a stand. It is shameful for the government to reward any company that has admitted to fraud and reportedly is subject to part of criminal investigation for its actions."

Ogilvy previously paid $1.8 million to settle civil allegations that it overbilled the government; a criminal investigation is continuing into the alleged alterations of employee time sheets working on the account. Ogilvy originally won the contact for the White House anti-drug account in 1999 and has drawn praise for its actual ad-related work.

Ogilvy has denied fraud
Ogilvy has denied fraud but said it settled the allegations to avoid a prolonged court battle.

U.S. Rep. Mark Souder, R-Ind., who chairs the House Government Reform panel that oversees the drug office, unsuccessfully opposed the amendment, expressing concern that the anti-drug ad campaign could to be temporarily suspended. He said his panel will hold a hearing on the concerns Friday.

'Unintended consequences'
Rep. Ernest Istook, R-Okla., chairman of an appropriations committee panel handling the bill, also indicated he wanted to avoid doing anything that could leave the government susceptible to "no unintended consequences."

Some Democrats, meanwhile, questioned whether Ogilvy was receiving unfair scrutiny compared with other government contractors. Rep. Steny Hoyer, D-Md., questioned whether Haliburton, Vice President Cheney's former employer and the winner of a recent government contract, falls into "the Ogilvy category."

The amendment adopted today would bar the government from providing funds to "any entity that has entered into a settlement to pay claims against that entity by the United States under the False Claims Act."

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