DRUG CZAR WARNED ON BILLING ADS

WASHINGTON (AP) -- A federal official warned the White House drug policy
office in April of possible billing irregularities in a national anti-drug
youth advertising campaign, months before a decision to withhold part of a
$187 million contract.

Richard Pleffner, the Office of National Drug Control Policy's project
contracting officer, warned the office's director, Barry McCaffrey, in an
April 13 memo that he had questions about the billing from Ogilvy Mather.

Ogilvy Mather is the primary government contractor in an anti-drug
advertising and education effort called the National Youth Anti-Drug Media
Campaign. The campaign, which began in 1998, is expected to cost nearly $1
billion over five years.

"Excessive billing irregularities under the Ogilvy contract have led to
growing uncertainties with Oglivy's management practices," Pleffner wrote.

The ONDCP last weekend revealed that it has held back about $13.5 million
in payments on $187 million while it investigates the questions, but
defends its and Ogilvy's work.

"The campaign is going very well and we'll continue to withhold those
payments under the billing questions are resolved," ONDCP Deputy Director
Donald Vereen said.

Drug policy officials insist that withholding the payments is nothing more
than routine procedure and an Ogilvy spokesman says that it is commonplace
for bills to be negotiated.

The General Accounting Office, the investigating arm of Congress, is
looking into the allegations.

Republicans questioned why it took so long for the ONDCP to investigate the
billing irregularities. "Here we are seven months later and ONDCP has done
nothing," said Rep. Bob Barr, R-Ga. "You haven't even ordered an audit."

Vereen told Barr that the agency is re-evaluating the contract and
investigating the allegations. Pleffner also defended the agency's work. "I
think we have done what we're supposed to do," he said.