Newsbrief: Ad Execs Charged With Ripping Off Drug Czar's Ad Campaign 1/9/04

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Since 1998, the New York advertising firm of Ogilvy & Mather has had a contract to produce anti-drug ads for the Office of National Drug Control Policy (ONDCP -- http://www.whitehousedrugpolicy.gov -- the drug czar's office). The firm is responsible a series of controversial creations linking illegal drug use to everything from teen pregnancy to terrorism, and had its ONDCP contract renewed in 2002 despite having admitted to improper billing practices.

Now, the Justice Department has charged two of the Ogilvy & Mather executives involved with criminal conspiracy for over-billing the taxpayers in as part of its $684 million contact. The indictment charges Thomas Early, the agency's finance director, and Shona Seifert, who formerly managed the contract, with "an extensive scheme to defraud the United States government by falsely and fraudulently inflating the labor costs."

The pair were charged with directing employees to falsify time sheets to show they had put in more time on the project than they actually did. They were also charged with directing employees to submit false vouchers to support the inflated court costs, the indictment said.

Both Early and Seifert have maintained their innocence, as has Ogilvy & Mather. But, covering its corporate behind, the ad agency also noted in a press release that if the pair had committed any crimes, "their behavior was inconsistent with the high standards the company promotes and maintains."

Those standards rose considerably in 2000, after the General Accounting Office reported the rip-off, which had occurred in billings for the previous year. The ad agency has already paid $1.8 million to the government to settle a civil suit based on the over-billing. According to Tuesday's indictment, the criminal activity began in mid-1999, when Ogilvy executives discovered their employees were not logging enough hours on the drug czar media campaign project. Seifert allegedly ordered her subordinates to change timecards to retroactively increase hours billed to the government, while she and Early are accused of telling employees to report working a certain percentage of their time on the contract whether they had done so or not.

"It really bothers me that money that was supposed to be used to prevent drug use among our young people appears to have been misused by an ad agency, and yet this agency gets a slap on the wrist and a pat on the back, 'here's another contract,'" Sen. Byron L. Dorgan (D-ND) told the Washington Post. Dorgan is one of a number of senators who had already suggested barring Ogilvy & Mather from further contracts because of its accounting misdeeds.

The indictment comes as the oft-criticized media campaign was enjoying some undeserved good news. The University of Michigan's Monitoring the Future report issued last month credited the media campaign for a drop in teen drug use in the last two years, although the study's lead researcher, Lloyd Johnson, would go only so far as to say it was "quite possible" the ad campaign had had its intended effect of heightened perceptions of the risks of marijuana and ecstasy.

On the other hand, teen use of Vicodin and Oxycontin are up, according to Monitoring the Future. That's some trade-off.

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Issue #319, 1/9/04 Taking Drug Policy to the Presidential Candidates: SSDP Goes to New Hampshire | Battle of Christiania Flares as Hash-Seller Burn Own Stands | Major New Reform Coalition Forming in Maryland -- Will Call for Treatment, Not Incarceration | DRCNet Interview: Loretta Nall, President, US Marijuana Party | Newsbrief: Principal in South Carolina Drug Raid Resigns | Newsbrief: Campaign Watch: Gephardt On Crank | Newsbrief: Chicago Suburb Seeks to Ban Glow Sticks from All-Ages Clubs | Newsbrief: Secret Courts, and Not Just for Terrorism Suspects | Newsbrief: Ad Execs Charged With Ripping Off Drug Czar's Ad Campaign | Kentucky Cop Kills Drug Suspect with Three Shots to the Back -- Protest Turns Into Near Riot Thursday Night | DRCNet Temporarily Suspending Our Web-Based Write-to-Congress Service Due to Funding Shortfalls -- Your Help Can Bring It Back -- Keep Contacting Congress in the Meantime | Perry Fund Accepting Applications for 2003-2004 and 2004-2005 School Years, Providing Scholarships for Students Losing Aid Because of Drug Convictions | The Reformer's Calendar
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