|One current and one former Ogilvy & Mather executive have been indicted.
OGILVY TO PAY PARTIAL LEGAL FEES FOR INDICTED FORMER EMPLOYEES
Spokesman Characterizes Move as Typical Corporate Policy
TWO FORMER OGILVY EXECS PLEAD NOT NOT GUILTY
Enter Pleas in White House Drug Office Advertising Case
INDICTED OGILVY & MATHER FINANCE CHIEF RESIGNS
Thomas Early Is Charged With Defrauding Government
BACKGROUND: THE WHITE HOUSE DRUG OFFICE ADVERTISING CASE
The Stories From 2001 to the Present
Read the 14-page indictment .pdf
Shona Seifert and Thomas Early were accused of falsely and fraudulently inflating Ogilvy's labor costs from May 1999 to April 2000 while working on the White House Office of National Drug Control Policy account. The charges come nearly two years after Ogilvy settled for $1.8 million civil charges that it overbilled the government for work on anti-drug youth media campaign.
The indictment alleges that once Ms. Seifert and Mr. Early realized Ogilvy employees had spent less time on the account than Ogilvy originally had anticipated, they told certain staffers to revise their time sheets to reflect that they had spent more time on the contract than they originally had recorded. The executives also allegedly directed staffers to record on time sheets that they had worked a specified percentage of time on the account regardless of whether they actually had done so. They are also accused of causing falsified time sheets to be submitted to the government and of trying to cover up the scheme.
Mr. Early and Ms. Seifert were indicted by a federal grand jury in the U.S. District Court in the Southern District of New York and are scheduled to be presented before Judge Richard Berman tomorrow. They face up to five years in prison and a fine of $250,000 for each of the 11 counts.
At the time, Mr. Early was a senior partner and director of finance for Ogilvy, which is part of WPP Group. Ms. Seifert was a senior partner and executive group director at the agency and at times served as a director on the project.
|The White House Office of National Drug Control Policy (ONDCP), a component of the Executive Office of the president, was established by the Anti-Drug Abuse Act of 1988. The principal purpose of ONDCP is to reduce illicit drug use, drug manufacturing and trafficking, drug-related crime and violence, and drug-related health consequences.
Now at Omnicom
Ms. Seifert, 43, now is president of Omnicom Group's TBWA/Chiat/Day's office in New York. In a statement late today, Ms. Seifert denied committing any crime.
"While saddened and dismayed by these fallacious charges, I do welcome the opportunity to present evidence of my total innocence. I am innocent of any wrongdoing. I will contest these charges. I know I will exonerated," she said. An agency spokesman said Ms. Seifert continues to run the agency and declined to answer further questions on her status. She joined Chiat in February 2002.
Mr. Early, 48, could not immediately be reached. In a statement, Ogilvy said it has cooperated with all the government investigations for more than three years and that if any of its employees broke the law, "their behavior was inconsistent with the high standards the company promotes and maintains."
White House drug office hired Ogilvy in January 1999 to handle media buying for the account, which spent $145 million annually in advertisements. In late 2000, a House Government Affairs subcommittee launched an investigation into Ogilvy's administration of the contract. Ogilvy later acknowledged problems with bills issued for work performed in 1999, saying its records showed "administration of some accounting aspects of its contract ... did not meet rigorous record-keeping requirements imposed on federal contractors." In February 2002, Ogilvy agreed to pay $1.8 million in a settlement with the drug office.
A media executive who oversaw day-to-day operations as well as another executive in charge of overall administration of the account were listed as unnamed co-conspirators. They were not named as defendants.
A spokesman for the White House drug office said the allegations stem from a prior administration and that the office's current director, John Walters, has taken steps to prevent similar problems.
After a review last year, Ogilvy retained the account but the drug office at the end of the year decided not to renew its contract.
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Lisa Sanders contributed to this report.