ANTI-DRUG AD EFFORT REVIEWED

A lawmaker concerned about allegations of over-billing in the Clinton
administration's ambitious anti-drug campaign intends to question senior
members of the Office of National Drug Control Policy next week about the
office's ability to manage the $1 billion project.

Rep. John L. Mica (R-Fla.), a critic of the drug policy office, will cite
the work of federal investigators and a consultant's report that concluded
the office is paying a New York advertising firm millions of dollars too
much to reach young Americans.

Drug control policy director Barry R. McCaffrey has accused Mica of playing
politics five weeks before national elections. McCaffrey defended his
office and the ad firm, Ogilvy & Mather, which collects more than $16
million a year to run the anti-drug effort.

"It's paying off and we're pretty proud of it," McCaffrey said of the
project. "I have no reason to suspect this isn't one of the finest firms in
the country. I love these people.

"McCaffrey said his office has disallowed $14 million in costs submitted by
Ogilvy & Mather in the past 18 months. He emphasized that many of those
expenses could be deemed payable upon receiving more documentation."There
is absolutely no overbilling," asserted Alan Levitt, director of the
National Youth Anti-Drug Media Campaign.

"There are bills that have been submitted that are being questioned, and
that is a normal part of what we do."

The tempest began in July with allegations made to a federal hotline that
Ogilvy was padding its bills and that the drug policy office was slow to
monitor spending on a project that has cost more than $550 million in its
first three years.

General Accounting Office investigators began asking questions. Interested
parties reviewed a report by Jane Twyon, a consultant paid by the drug
policy office, who said the office was paying Ogilvy more than the industry
standard and could find significant savings, perhaps $8 million to $15
million a year.

The sleuthing led Mica to call a hearing for Wednesday. Public notice of
the event says Mica's committee intends to ask about possible "excessive
costs and questionable billing practices," while also asking whether the
drug policy office has adequate safeguards. Mica could not be reached for
comment yesterday.

Ogilvy & Mather signed a contract in January 1999 to conduct research in
102 U.S. cities, plan the media campaign and buy time or space on broadcast
networks, newspapers and the Internet--more than 2,000 outlets each month.

The firm's annual fee is $1.6 million. It also bills the drug office more
than $15 million in labor costs, plus millions more in other expenses.
Counting the money paid to media companies for running ads, more than $300
million has been channeled through Ogilvy in the past two years.The firm
does not write the ads, which are supplied at no cost by ad agencies
through the Partnership for a Drug Free America. One of the best-known
television spots shows actress Rachel Leigh Cooke smashing everything in a
small kitchen with a frying pan. A voice says, "This is what happens to
your brain after snorting heroin. This is what your body goes through. This
is what your family goes through. . .

"At the drug policy office, only a few of the 154 employees are assigned to
the youth campaign. One officer monitors the contract and makes payment
recommendations. The office pays $300,000 a year to the Department of
Health and Human Services to manage the contract, but it is seeking to
shift that job to the Department of the Navy.

Ogilvy's project manager, Shona Seifert, denied allegations of overbilling
and disputed Twyon's conclusions. She said there is no accurate industry
standard for such a unique and complicated project.

By Seifert's count, $10.5 million in bills have been disallowed by the drug
office and remain in dispute. Of that amount, she said, $4.5 million is
Ogilvy costs, $1.4 million is production costs and $4.5 million can be
traced to media outlets that provided insufficient documentation.