TWO AD EXECS CHARGED WITH OVERBILLING U.S. GOV'T

LOS ANGELES - One current and one former executive from the prestigious
advertising agency of Ogilvy & Mather were charged Tuesday with overbilling
the federal government for an anti-drug media campaign, federal prosecutors
said.

Thomas Early, a senior partner and director of finance of Ogilvy & Mather
in Manhattan, and Shona Seifert, a former senior partner and executive
group director, were charged in an indictment in Manhattan federal court
with participating in a scheme to defraud the government, according to a
statement by David Kelley, U.S. Attorney for Southern District of New York.

Paul Clark, a spokesman for Ogilvy, said the ad agency was aware Early and
Seifert were under investigation and had been cooperating with the probe
since it began two years ago.

He said Early's position was currently under review, while Seifert had left
the agency during the last two years.

Clark said Ogilvy, a unit of the world's No. 3 advertising company,
British-based WPP Group Plc, first brought the discrepancies to the
attention of the Justice Department in 2000, prompting the federal
investigation.

The indictment charges the executives with developing an extensive scheme
to fraudulently inflate labor costs stemming from a 1998 contract from the
Office of the National Drug Control Policy (ONDCP) for the anti-drug media
campaign.

Under the contract, Ogilvy could have received about $1.5 million a year
for labor costs, according to Clark.

According to the indictment, in the summer of 1999, Early and Seifert
learned the labor billings were far below what Ogilvy & Mather had
anticipated. From May 1999 through April 2000, they directed certain
employees to revise time sheets already completed to reflect falsely that
they had worked more time on the ONDCP contract than originally recorded,
it said.

They also directed Ogilvy employees to record on their time sheets a
specified percentage of their time for the ONDCP contract whether or not
the employees actually worked that amount, according to the indictment.

Early, 48, and Seifert, 43, are scheduled to be presented before U.S.
District Judge Richard Berman on Wednesday and are both charged with one
count of conspiracy and 10 counts of false claims.

If convicted, each faces up to five years in prison and a fine of $250,000
or more based on the amount of gains involved.

Clark said Ogilvy stopped billing the government from the summer of 2000
until its system was certified in 2001 by outside and government auditors
applying stringent standards.

He said Ogilvy disclosed billing missteps to the Justice Department and
other government agencies; took corrective action; reached a civil
settlement with the government and instituted a rigorous accounting
compliance program.

"Although it turned out that we were unprepared for the complex and unique
federal record-keeping requirements of that type of contract, we are
nonetheless proud that our work on that contract and on the ONDCP contract
that we re-bid and re-won in 2002 has consistently exceeded the contract
performance requirements," Ogilvy said in a statement.