Pubdate: Tue, 12 Dec 2000
Source: Philadelphia Daily News (PA)
Copyright: 2000 Philadelphia Newspapers Inc.
Contact:  http://www.phillynews.com/
Forum: http://interactive.phillynews.com/talk-show/
Author: John Donnelly, Boston Globe
Note: The article appeared originally in the Boston Globe, see http://www.mapinc.org/drugnews/v00/n1867/a07.html

IS ADVERTISING PART OF THE HIGH PRICE OF DRUG WAR?

WASHINGTON - A New York ad firm in control of the Clinton administration's
antidrug media campaign acknowledged "possible errors" in its bills to the
government during a meeting Nov. 29 with Justice Department litigators,
officials confirmed yesterday.

Ogilvy & Mather said in a statement last night that it voluntarily
approached the civil division of the Justice Department, but the company
refused to give details on the questionable billings to the White House
Office of National Drug Control Policy. A past analysis alleged that the
firm could be overbilling the government by several million dollars.

For the past two years, the firm has managed the government's $1 billion
advertising antidrug campaign that has featured dramatic television
advertisements, including one in which actress Rachel Leigh Cooke uses a
frying pan to destroy a kitchen and a voice-over says, "This is what
happens to your brain after snorting heroin."

The billing practices of the company, which has charged the government an
annual fee of $1.6 million plus more than $15 million annually in labor
costs, were scrutinized by a congressional oversight committee in September
and are under investigation by the General Accounting Office.

Robert H. Hast, the GAO investigator overseeing the Ogilvy probe, said the
investigation was continuing, and declined further comment. Rep. John L.
Mica, R-Fla., chairman of the Subcommittee on Criminal Justice, Drug Policy
and Human Resources, was traveling in Italy and could not be reached for
comment.

The U.S. drug control policy office, in a statement approved by Director
Barry R. McCaffrey, said Ogilvy "disclosed, to government contracting
officials, concerns about their internal accounting system. We consider
this a positive step to resolve cost issues."

The issue first arose months ago. An Ogilvy whistle-blower last March told
U.S. officials that "time sheets were altered to increase the number of
hours worked against the ONDCP contract," according to an April 13 memo
written by Richard Pleffner, who helped manage the Ogilvy account in the
antidrug office. But despite the concerns raised by Pleffner, who declined
to comment yesterday, the antidrug office defended Ogilvy for months.

McCaffrey said in an interview with the Washington Post in September, "I
have no reason to suspect this isn't one of the finest firms in the
country. I love these people." And Alan Levitt, director of the National
Youth Anti-Drug Campaign, told Mica's committee in September, "There is
absolutely no overbilling." The office, however, withheld payment of
millions of dollars until questions were resolved.

A study done earlier this year for the antidrug office by Jane Twyon,
president of Worldwide Media Directors, said the office was paying
especially high fees for media planning, and suggested the office could
save millions of dollars.

The Ogilvy statement said it requested a meeting with the Justice
Department because "our failure to tightly administer some accounting
aspects of the contract is not acceptable to us. . . . At that meeting on
Nov. 29, we informed the Justice Department of possible errors in the
billing process and made it clear that we wanted to work with the
contracting officer to identify and resolve any mistakes that may have
occurred."

It said the company has hired PricewaterhouseCoopers to review the
accounts, as well as retired Rear Admiral Robert Ravitz to serve as
government contracts supervisor.
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MAP posted-by: Eric Ernst