Ogilvy contract costs too much

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Ogilvy & Mather Worldwide billed the federal government for some labor costs it could not later support. Prior to that, the government erred in hiring Ogilvy for its anti-drug ad account because Ogilvy accounting systems didn't meet government specs. Now there's a fraud probe. This adds up to a difficult conclusion: It's time for Ogilvy to resign.

Ogilvy's North American CEO acknowledges his agency made some mistakes and has taken corrective steps (see Letters to the Editor on this page). And, to be clear, the client bears fault: In awarding the White House Office of National Drug Control Policy's account in 1999, the government failed to catch that Ogilvy's accounting system didn't meet its standards; Ogilvy fixed that last month.

The controversy moved to a new level, however, with news out of a congressional hearing that the FBI and Justice Department are investigating possible fraud. Perhaps Ogilvy partisans are correct that one of their major critics, Rep. Bob Barr, R-Ga., has political motivations. But a criminal probe is serious.

It's natural that Ogilvy defend its integrity and, while it may not be blameless, it certainly has been publicly kicked around in Washington in a way not often seen in the world of private business. It's now in the agency's interest to cut the bleeding and exit before the inevitable formal account review begins. Despite its solid performance on the account in media buying and planning, there's too much of a cloud over billing controversies for Ogilvy to repitch the business. Instead, Ogilvy should work hard to settle any remaining issues and clear its name. Ogilvy is too good an agency to stay stuck in this muck.

Beyond Ogilvy's guilt or innocence, its time in the public pillory is a reminder that working for Uncle Sam imposes special management burdens that not all agencies will be prepared for. There's nothing private in the public sector. But while government has a duty to police how tax dollars are spent, public officials also owe fair treatment to the government's ad agencies when questions arise. If other agencies see injustice in Ogilvy's treatment, some may say government work is not worth the risk.

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