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MORE TESTIMONY LINKS SEIFERT & EARLY TO BOGUS BILLING SCHEME

Criminal Inquiry Spreads to OgilvyOne Interactive Shop

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NEW YORK (AdAge.com) -- In U.S. District Court here yesterday, an Ogilvy & Mather executive placed former colleague Shona Seifert at a meeting where some ad agency staff members were asked to bill hours they would never actually work to the White House anti-drug office account.
Photo: Louis Lanzano
Timesheet-related comments by Thomas Early, former chief financial officer of Ogilvy & Mather, New York, were described in testimony in U.S. District Court in lower Manhattan.
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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

It was the fourth day of testimony in the criminal proceeding involving the WPP Group advertising agency's work for the Office of National Drug Control Policy (ONDCP). Ms. Seifert, a former senior partner and executive group director at Ogilvy, and Thomas Early, its 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.

August 1999 meeting
Joseph Burke, director of print production at Ogilvy's New York office, testified that Ms. Seifert was at an Aug. 10, 1999, meeting where employees were asked to pad their timesheets in order to make up for a projected revenue shortfall on the ONDCP account.

Mr. Burke is not the first witness to connect Ms. Seifert with meetings and other communications about timesheet falsification, but his testimony was striking because he has not been accused of wrongdoing, as other witnesses against Ms. Seifert and Mr. Early have been.

"It felt to me that we were being asked to put down more time on the business than we could work," he said, adding there was no talk of additional assignments on the ONDCP account. Mr. Burke said he ignored the directions given at the meeting. "I billed time exactly as I did before. No more, no less."

Mr. Burke's testimony -- confident, straightforward, certain -- was in sharp contrast to his predecessor on the witness stand, Peter Chrisanthopoulos. Mr. Chrisanthopoulos, a former president for national broadcasting and programming at Ogilvy, was one of those witnesses who pleaded guilty in hopes of leniency in his sentence.

Inflated timesheets
In a breathy, dejected tone of voice, the slight former executive -- now out of work for 14 months -- told the jury Ms. Seifert and Mr. Early directed him and others to inflate their timesheets. He said he attended a contentious meeting in the fall of 1999 in which an angry Mr. Early blamed the ONDCP shortfall on the media department and ordered the media staff to increase the percentages of the time they logged on the account even if those hours weren't worked.

According to Mr. Chrisanthopoulos, Mr. Early said: "You're going to set new targets for the rest of the year and everybody better use those targets on their timesheets."

A week or so later, he met with Ms. Seifert in a hallway at the agency. "She said the media department is going to get targets for ONDCP and it's important for me and everybody else on ONDCP to use them," Mr. Chrisanthopoulos recalled.

During cross-examination, one of Ms. Seifert's attorneys, Emmet Flood, questioned whether his client, who actually made less money and didn't supervise the witness, would have been able to influence Mr. Chrisanthopoulos even if she wanted to.

"Wouldn't you agree that a woman in another department -- and not the head of the department -- would be poorly positioned to direct you to inflate your timesheets?" Mr. Flood asked.

"No, I wouldn't agree," Mr. Chrisanthopoulos said.

OgilvyOne
Prosecutors today also tried to demonstrate the sprawl of the overbilling scheme, for the first time showing how it spilled out of the agency's media department and even involved direct and interactive shop OgilvyOne.

Two former OgilvyOne staffers testified that in 1999 managers from the ad agency developed a plan to spread the agency's labor-cost overruns on an IBM project over to the ONDCP account. Sometime after the shortfall was realized, some Ogilvy executives discovered that a Web-development project for IBM subsidiary Tivoli was running $300,000 overbudget because of labor costs, said Wai-Man Leong, a former OgilvyOne employee who is now a client finance director at Ogilvy & Mather.

Mr. Leong said the staff planned to move some of the excess hours -- $27,000 worth -- to ONDCP, but he said he declined to sign a transfer form because he was "uncomfortable."

"We were over by $300,000 and $27,000 seemed like a waste of time," he said.

It was unclear whether those hours were actually transferred and if Ms. Seifert and Mr. Early were related to the plan. The defense team's cross-examination of Mr. Leong will continue today.

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