DRUG CZAR ATTACKED ON MEDIA CAMPAIGN

Republicans In House Contend Mccaffrey Ignored Alleged Billing
Fraud By Outside Firm. He Says The Criticism Is An Attempt To Hurt The
White House.

WASHINGTON - The nation's top drug official came under fire Wednesday
for allegedly ignoring possible fraud and overbilling in a $1-billion
anti-drug media campaign and for accepting an unreported "personal
favor" from a public-relations contractor.

Gen. Barry R. McCaffrey, who heads the White House drug policy office,
denied any wrongdoing. But House Republicans said they have serious
questions about whether his office's massive media campaign has fallen
into "disarray" due to mismanagement and failed oversight.

At a morning-long hearing that often grew contentious, members of a
subcommittee of the House Government Reform panel heard evidence
suggesting that advertising giant Ogilvy & Mather--which has billed
McCaffrey's office $187 million in the last two years for work on the
nationwide anti-drug media campaign--has charged rates dramatically
above industry norms and submitted "irregular" or falsified billing
records for its work.

McCaffrey's office, known as the White House Office of National Drug
Control Policy, already has withheld $13.5 million billed by Ogilvy &
Mather for anti-drug messages the company helped get on the air. But
congressional critics said the office has been slow to answer concerns
about the firm, failing to even initiate an outside audit some seven
months after the idea was first raised.

"Is the public being gouged?" asked Rep. John L. Mica (R-Fla.), who
chaired the hearing.

McCaffrey's aides and his supporters in Congress said no fraud has
been established. They charged that the latest imbroglio is a nonissue
being stirred up by Republicans as a way of hurting the Clinton
administration. Ogilvy & Mather said in a statement that it has billed
the White House drug office for its work "within the industry
standard, and if we learn of any accounting problems, we will address
them and make necessary adjustments."

The media campaign, begun in 1998, has become a cornerstone in
McCaffrey's efforts to dissuade young people from experimenting with
drugs.

But the media program has gotten the so-called drug czar into hot
water before--most notably early this year when it was disclosed that
the drug policy office had quietly been giving major television
networks millions of dollars in financial credit for incorporating
anti-drug messages in shows such as "E.R." and "Beverly Hills 90210."
Civil libertarians and the arts community decried the tactic as an
unwarranted intrusion by government into what the public watches.

But unlike most past attacks, McCaffrey found his own personal
veracity challenged in a report prepared for the subcommittee by the
General Accounting Office, the investigative arm of Congress.

In the report, investigators detailed a favor that McCaffrey accepted
from another public-relations firm active in the media campaign,
posing a potential conflict of interest.

The issue grew out of a critical article that the New Yorker magazine
published in May. It charged that during the Persian Gulf War in 1991,
troops led by McCaffrey--then an Army general--used unnecessary force
in a battle with Iraqi soldiers following a cease-fire.

McCaffrey branded the article "nonsense" at the time it
appeared.

GAO investigators found that McCaffrey received professional advice on
how to handle the fallout from the article from Paul Johnson, a
regional president for Fleishman-Hilliard Inc. The public-relations
powerhouse receives about $10 million a year from McCaffrey's office
for its media campaign work.

"Director McCaffrey denied to us that anyone had assisted him in his
response to the article," GAO investigators said in their report. But
investigators said Johnson acknowledged that McCaffrey had called him
because he was very concerned about the effect the article might have
on the war on drugs, and Johnson said he spent three to four hours
helping to shape a response to the New Yorker and also referred
McCaffrey to a libel attorney.

Johnson said he did not bill McCaffrey or the drug policy office for
his time because "he did this as a personal favor to Director
McCaffrey," according to the report.

Through his spokesman, McCaffrey said that there was nothing
inappropriate.

Johnson could not be reached for comment, and officials at
Fleishman-Hilliard said they would not be able to discuss the issue.