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Former Ogilvy Account Exec Details Shifts of Billing Data

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NEW YORK ( -- A former Ogilvy & Mather account executive testified in federal court today that she was told to falsify timesheets by Shona Seifert, one of two former Ogilvy executives charged with defrauding the government while working on the White House anti-drug account.
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Melissa Cunningham, who is receiving immunity from prosecution for her testimony, said Ms. Seifert asked her to revise timesheets she had already submitted, attributing hours worked for other clients to the Office of National Drug Control Policy account in 1999 and 2000.

Timesheet entries circled
She testified that a number of timesheets were returned to her with certain entries denoting time worked for other clients circled and marked up with the accounting code for the ONDCP account. The revised timesheets were then signed by Ms. Cunningham and Ms. Seifert.

"[Ms. Seifert] asked me to take the amount of time circled on the timesheets and reallocate it to ONDCP," Ms. Cunningham said during nearly two hours of testimony in U.S. District Court in lower Manhattan. She said she was asked to record hours against ONDCP even before she was assigned to the account and, later, after she began spending large amounts of time on another Ogilvy client, Duracell International.

Ms. Cunningham's credibility came under a withering attack from Gregory Craig, Ms. Seifert's lead counsel. The attorney bored in on the fact that Ms. Cunningham, now at Publicis Groupe's Saatchi Consumer Health, altered her account as the investigation unfolded, suggesting she changed it in return for the immunity agreement from the U.S. attorneys. He pointed to at least five interviews with investigators and lawyers in which she was unsure of whether Ms. Seifert or another Ogilvy employee, Albert DiOrio, told her to inflate the time worked on the account.

Caught in a lie
Ms. Cunningham explained that her original story was born of fear that Ms.

Shona Seifert, the former senior partner and executive group director at Ogilvy & Mather Worldwide who headed the ONDCP account.
Seifert, once her supervisor, would fire her and she stuck with it even after Ms. Seifert was no longer her supervisor in an ultimately futile attempt to not get caught in a lie.

"We're talking about changing your story, Ms. Cunningham, in addition to changing your timesheets," Mr. Craig sniped during cross-examination.

The exchange, which saw the 29-year-old Ms. Cunningham go hoarse and erupt in tears, was the emotional crescendo of the first full day of testimony. Ms. Seifert, along with Thomas Early, the New York office's chief financial officer, face up to five years in prison and a fine if convicted for defrauding the government and making false statements. Each have pleaded not guilty.

Ms. Cunningham's testimony, which appeared to be the strongest piece of evidence in the prosecution's favor, jolted what had been a plodding case mounted by the U.S. attorneys. Testimony by a Department of Health and Human Services contract official provided details of the bureaucratic wrangling over how the massive advertising media contract was administered.

Ogilvy president to the stand
Then prosecutors called to the stand Bill Gray, president of WPP Group's Ogilvy & Mather, New York, and Ms. Seifert's onetime boss. In his own words as well as in a string of internal memos charting her rise within the agency, Mr. Gray described Ms. Seifert in glowing terms.

"She was an exceptional leader," he said. "She had grown the

Thomas Early, former senior partner and director of finance at Ogilvy & Mather Worldwide.
business, attracted other business. She was used in other new-business situations. The creative product she was around was extremely good."

In his cross-examination, Mr. Craig used Mr. Gray to try to minimize the impact an anticipated revenue shortfall on the ONDCP account -- discovered shortly after Ogilvy staffers began work on it -- had on the New York office and on Ms. Seifert's career.

The discovery of the shortfall is what prosecutors say set in motion the alleged conspiracy.

Though he admitted to reacting in pique when he heard about it, Mr. Gray said flatly that Ms. Seifert's job or bonus -- $130,000 after 1999 on a salary of $200,000 -- was not in jeopardy because of that projected shortfall. The $2 million or $3 million shortage was a small fraction of the $200 million in revenue the office posted in the third quarter of 1999.

Robert Zach of the media department
The prosecution tomorrow will presumably continue in its attempt to construct a ring of co-conspirators as Robert Zach, formerly a member of the Ogilvy media department, continues his testimony, which had just begun when Judge Richard Berman called it a day. Mr. Zach pleaded guilty in 2003 to defrauding the government but his sentence is pending his cooperation in the trial.

But his credibility already has a strike against it. During direct examination, he admitted to lying on an application for a realtor's license after resigning from Ogilvy following his guilty plea. He admitted to being convicted of a felony, but said he had already struck a deal to avoid jail time -- which is not true. "I needed a job," he explained. "I was out of work for a year and I was desperate to provide for my family."

It remains unclear what, if anything, the government has on Mr. Early, a former finance director in Ogilvy's New York office. So far, the prosecution has focused on Ms. Seifert's role as executive group director, and Ms. Cunningham's testimony left Mr. Early untouched.

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