Editorial: Ad agency ethics get day in court

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A federal criminal indictment accusing two Ogilvy & Mather Worldwide executives of defrauding their client, the White House Office of National Drug Control Policy, is nothing to cheer about. Not when the government alleges the executives, working with unnamed co-conspirators, ordered subordinates to falsify agency time sheets to inflate labor charges in 1999 and 2000 to avoid a revenue shortfall on the account.

Earlier allegations about O&M's handling of the White House National Youth Anti-Drug Campaign stirred up a furor in Congress. Even the suggestion of impropriety directed at a premier agency like Ogilvy should have embarrassed everyone in the agency business-and troubled advertisers about the state of ethics on Madison Avenue.

After a two-year federal probe, the filing of charges finally shapes the issue bluntly: Was what happened at Ogilvy just sloppy time-sheet discipline? Or was it a crime by two executives? Never indicted itself, Ogilvy in 2002 settled civil fraud charges, paid $1.8 million to the government and agreed to establish a rigorous ethics program for its employees. Perhaps just as painful, its name was dragged through the news for months as angry members of Congress demanded O&M be banned from handling future government ad work.

Now, federal prosecutors are assigning criminal responsibility to Shona Seifert, who directed the $684-million multiyear government ad account at O&M (and is now president of Omnicom's TBWA/Chiat/Day in New York), and Thomas Early,chief financial officer at O&M's New York office. Mr. Early resigned his post last week to seek vindication in court. Ms. Seifert, in a statement, firmly denied any wrongdoing. The outcome will show whether prosecutors have overreached here. But advertisers, other agencies and public officials responsible for the anti-drug campaign, to say nothing of taxpayers, will finally get an accounting of what actually transpired.

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