BILL FOR WHITE HOUSE ANTI-DRUG ADS IS IN DISPUTE

WASHINGTON -- The White House drug policy office is withholding more than
$13 million in payments to a major advertising firm while it determines
whether the company overbilled the government.

Officials of the Office of National Drug policy said yesterday examination
of invoices submitted by the advertising firm of Ogilvy & Mather are
routine operating procedures.

About $13.5 million of $187 million billed by Ogilvy & Mather have been
withheld pending negotiations, the officials said. The money was spent on
an ad campaign urging young people to stay away from drugs.

An outside consultant employed to assess the charges found the billed
costs, particularly for labor, were "dramatically higher than even the high
end of what is standard industry practice."

Nonetheless, drug policy officials said withholding the payments is nothing
more than routine procedure.

"It is standard operating practice for us to scrutinize everything," said
Pancho Kinney, the drug office's director for strategic operations.

"There is absolutely nothing here that concerns us. What we are doing is
pursuing prudent measures to protect the public interest. The great
majority of questioned costs has been found allowable."

Howard Paster, an Ogilvy spokesman, told The New York Times, which
reported the story yesterday, that it is commonplace for bills to be
negotiated. The company expects to be paid for its work with no significant
reduction in billing, Paster said.

The General Accounting Office began an inquiry into the Ogilvy contract in
July.

Ogilvy is the primary 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.