Media & Marketing

HOUSE MOVES TO BAR PAYMENT TO OGILVY FOR AD CAMPAIGN

The House of Representatives passed a bill that would effectively bar the
U.S. from paying Ogilvy & Mather Worldwide for its work on the prestigious
White House advertising campaign to eradicate youth drug abuse.

The decision could be a setback to the Madison Avenue powerhouse agency, a
strategic adviser in the U.S. advertising effort aiming to turn teens and
preteens against drugs . Only three weeks ago, the unit of WPP Group PLC of
London won a new $762.1 million multiyear contract with the government. The
victory appeared to assure Ogilvy that it would keep its designation as the
key private player in the controversial public-health advertising effort.

Wednesday's development could put that important assignment in jeopardy if
it gains support in the Senate because it could force the U.S. to replace
Ogilvy with another advertising firm.

The House approved the Treasury, Postal and general appropriations bill
Wednesday. U.S. Rep. Bob Barr (R., Ga.), a longtime critic of Ogilvy,
proposed an amendment to the broad appropriations bill. The amendment,
which would effectively prevent the ad agency from getting paid by the U.S.
for any work on the campaign after Oct. 1, was approved in a voice vote.

A spokeswoman for the White House drug czar's office didn't return calls
seeking comment. But Congressman Barr was quick to declare victory.
"Today's vote sends this important message that those who misuse taxpayer
dollars and defraud the public will not be allowed to benefit further," he
said in a statement.

In February, Ogilvy agreed to a $1.8 million settlement to resolve civil
charges that it inflated labor costs for its earlier work on the
advertising program. A separate criminal investigation focusing on whether
Ogilvy employees deliberately altered time sheets is still pending. Ogilvy
has denied any wrongdoing.

A spokeswoman for Ogilvy said the ad agency would continue to fight for the
government assignment. "We won an open and fair competition on the merits,"
she said.

The amendment to the broad House appropriations bill would block Ogilvy
from getting paid for its work because it prevents any company that has
defrauded the government from receiving taxpayer dollars. It's too soon to
say whether the amendment will become law. While the broad House
appropriations bill passed by a vote of 308-121 Wednesday, it now goes to
the Senate, where it must also be approved.