NEW YORK -- A grand jury indicted one current and one former senior executive of WPP Group PLC's Ogilvy & Mather advertising agency, alleging the pair worked with unidentified co-conspirators to defraud the U.S. government.
The indictment also alleges the duo made false claims while working on a lucrative account for the Office of National Drug Control Policy.
The action surprised Madison Avenue, which largely believed the matter had been resolved after Ogilvy paid $1.8 million to settle civil charges in February 2002. At the time, Ogilvy, one of the ad industry's best-known shops, said it voluntarily withdrew $850,000 in billings to the U.S. because it lacked confidence in the documentation supporting the figure.
The court document, filed Tuesday in U.S. District Court for the Southern District of New York, alleges that Thomas Early, 48 years old, Shona Seifert, 43, and unnamed co-conspirators "participated in an extensive scheme to defraud the United States government by falsely and fraudulently inflating the labor costs" that Ogilvy incurred while working under contract.
The drug-policy office, which is responsible for establishing the U.S.'s drug-control program, is a component of the executive office of the president. As part of its duties, the office conducts a national media campaign to educate young people about the dangers of illegal drugs. Ogilvy was awarded a lucrative five-year contract in December 1998. The government put the cost of the contract at $684 million, according to the court filing. For the initial year of the contract, Ogilvy was entitled to receive a fixed fee of about $1.6 million.
Ogilvy's main role was to determine when and where to broadcast antidrug ads, which were donated by ad agencies around the country through the Partnership for a Drug-Free America, a nonprofit group. Ogilvy also was occasionally asked to craft ads. The agency created a stir with two jarring TV commercials that debuted during the Super Bowl in 2002. The spots told teenagers that by buying drugs they were handing money to the terrorists behind the Sept. 11, 2001, attacks and their ilk.
To be fair, this fraudulent contract commenced under the Clinton* administration, during the fraudulent impeachment proceedings. The fraudulent 9-11 commercials and the $1.8 million kickback to settle the civil charges of fraudulent billing occurred during the fraudulent Bush administration.