Online Exclusive: Courtroom News

OGILVY COLLEAGUE TESTIFIES SEIFERT, EARLY APPROVED SCHEME

Depicts Party, Meetings, Staffing Irregularities and Routine Records Alteration

By Published on .

Most Popular
NEW YORK (AdAge.com) -- Spending the entire day on the stand, former senior Ogilvy & Mather partner Robert Zach today detailed his own and his colleagues' complicity in a scheme to alter the timesheets of the agency's White House drug office advertising account.
Photo: Louis Lanzano
Shona Seifert, the former senior partner and executive group director at Ogilvy & Mather Worldwide who headed the ONDCP account, outside U.S. District Court in lower Manhattan.
Companion Stories:
TIMESHEET FALSIFICATION DESCRIBED IN SEIFERT TRIAL
Former Ogilvy Account Exec Details Shifts of Billing Data
DAY ONE OF SEIFERT TRIAL FOCUSES ON PADDED TIMESHEETS
'Hundreds of Ogilvy Employees Were Instructed to Lie'

Full Background:
BACKGROUND: THE WHITE HOUSE DRUG OFFICE ADVERTISING CASE
The Stories From 2001 to the Present

Read the 14-page indictment .pdf

Mr. Zach, a former media director on the Office of National Drug Control Policy account, has already pleaded guilty in the case and is now testifying for the prosecution in exchange for a possibly lighter sentence.

Staffing plans
In U.S. District Court in lower Manhattan, Mr. Zach said that throughout the latter part of 1999 he and other Ogilvy employees repeatedly revised the staffing plans submitted to the ONDCP so employees could record more hours on the account even though that time was often dedicated to other business. He said this was all part of a scheme approved by Mr. Early and Ms. Seifert to make up for a projected $3 million shortfall in revenue from the account.

Ms. Seifert, who was the administrator of the account, and Mr. Early, the New York office's chief financial officer, face up to five years in prison and a fine if convicted of defrauding the government and making false statements. Each has pleaded not guilty to the charges.

In his testimony, Mr. Zach laid out a narrative of how the Ogilvy/ONDCP work evolved and ultimately went bad.

Celebration party
After being awarded the $700 million national anti-drug account in late 1998, agency staffers were euphoric, he said. They celebrated the win with a party in a conference room shortly after the holidays. There, Bill Gray, head of the New York office, and Ms. Seifert, executive group director and leader of the pitch that won the business, spoke to those assembled.

By Christmas 1999, jubilance had given way to a kind of desperation with some of those same executives spending much of the year trying to doctor timesheets, staffing plans and in some cases even hiring staff so that the agency would make its numbers on the account. In one e-mail, an Ogilvy contract coordinator cautioned Ms. Seifert and Mr. Early about sending Christmas gifts to the client, saying the government "is very sensitive on the issue."

'Invoices and timesheets'
Mr. Zach said Mr. Early then sent a reply e-mail about his gift-giving plans: "I was hoping to send them invoices and timesheets," he wrote.

Several jurors burst into laughter.

Similar testimony is expected on Tuesday, with the prosecution

Photo: Louis Lanzano
Thomas Early, former senior partner and director of finance at Ogilvy & Mather Worldwide.
expected to call four more Ogilvy media staffers who will offer more detail.

At the center of the activities were two kinds of documents: staffing plans -- or a record of the percentage of hours each employee on an account is expected to devote to it -- and the timesheets on which each employee was expected to note hours actually worked and submit on a weekly basis.

The work on the anti-drug account largely entailed media buying and planning.

Shortfall
A revenue shortfall, discovered in the summer of 1999, was initially blamed on the fact that Ogilvy did not receive much business from the account in the first several months after assuming it in January.

The incumbents, Bates Worldwide and Zenith Media, had already done media deals extending well into the year and there was little for Ogilvy staffers to do except integrate the business into the agency's various systems, Mr. Zach said. And because many of the staffers who were actually billing on the account were slow in turning in timesheets simply compounded the problem.

By early fall, the shortfall had begun to turn up on Ogilvy executives' radar screens, including those of Mr. Early, Ms. Seifert and Mr. Gray. In testimony given Feb. 2, Mr. Gray, who hasn't been accused of any wrongdoing, said he

The ONDCP is the national office funded by Congress to protect American children from the dangers of drug abuse.
learned about the discrepancy in a phone call with the defendants that caused him to react in anger. "I said they had to dig in, get a fix on it and get back to me," Mr. Gray said.

Revisions and lies
Mr. Zach testified that Mr. Early and Ms. Seifert were part of a large-scale effort to revise already submitted timesheets and lie on future ones. However, he said, the defendants stopped short of directly ordering modifications on the timesheets. Instead code words like "reevaluate," with respect to the documents, were used.

"Shona said to me that we have to go back to the senior-most people -- people we can trust -- and have them go back to the timesheets," he said. "However, we cannot say that to them. We have to go tell them to reevaluate the timesheets."

Mr. Zach said Ms. Seifert led a meeting where she told him to make the staffing plan changes. "I went back and revised the plan to increase the percentage of time for individuals working on the account," Mr. Zach said in court.

'Thanks a million'
He described an e-mail he authored in July 1999 in which he said he noticed some senior media department staffers weren't on the list of employees working on the ONDCP account and that he would add them to the list. "Lots of dollars there," he wrote, referring to their relatively high salaries. Ms. Seifert replied with her own e-mail: "Thanks a million. See you next Tuesday."

The defense team tried to chip away at Mr. Zach's credibility. They focused mostly on his application to become a real-estate broker in Connecticut last year on which he inaccurately stated that he had struck a deal to avoid jail time.

$150,00 Ferrari
Emmet Flood, one of Ms. Seifert's lawyers, suggested that Mr. Zach was in dire financial straits in late 1999 because he was the subject of a civil lawsuit and because he had purchased a $150,000 imported Ferrari in cash, even though his salary was only $180,000. Mr. Flood suggested that Mr. Zach's part in the conspiracy was motivated by fear of not getting a bonus.

Mr. Zach said he sold the car before even driving because "he didn't need it."

His reason for buying it? "Cars are my thing," he said.

In this article: