AD EXECS CHARGED IN FRAUD

Accused of Cheating Government

One current and one former executive of Manhattan's Ogilvy & Mather ad
agency yesterday were accused of defrauding the federal government by
inflating billing costs related to media campaigns commissioned by the
White House drug czar's office.

The federal indictment, filed in U.S. District Court in Manhattan,
alleges that Thomas Early, a senior partner and director of finance
for Ogilvy, and Shona Seifert, a former Ogilvy senior partner and
executive group director, along with unnamed others, directed
employees to falsify their time sheets and allowed vouchers to be
submitted to the government for work the agency didn't do in
connection with the Office of National Drug Control Policy's media
campaign, which is about $137 million annually.

The indictment alleges that the fraudulent activity occurred between
May 1999, about five months after the agency was awarded the contract,
through January 2000.

In a statement, Seifert, who is now president of the Manhattan office
of TBWA/Chiat/Day, denied any wrongdoing and said she has never
"committed any criminal misdeed of any nature."

"While saddened and dismayed by these fallacious charges, I do welcome
the opportunity to present evidence of my total innocence," Seifert
said. "I am innocent of any wrongdoing. I will contest these charges.
I know I will [be] exonerated."

Early is still employed by Ogilvy in the same position mentioned in
the indictment, but "Ogilvy is reviewing the situation now," said Paul
Clark, a spokesman for the agency, who declined to elaborate.

A statement from Ogilvy, which is owned by London-based WPP Group,
said the agency was "unprepared for the complex and unique federal
record-keeping requirements" when it was first awarded the drug policy
contract and has since overhauled its accounting practices in that
area. In February 2002, the agency reached a $1.8 million settlement
with the Justice Department, which had accused the company of
overbilling. The account was put up for review, but later that year
the government chose to keep Ogilvy.

"We are aware that several individuals have been charged in connection
with actions that are alleged to have been taken while they worked on
the initial ONDCP contract at Ogilvy," the agency said. "If true,
their behavior was inconsistent with the high standards the company
promotes and maintains."