Epic Drama Unfolds For Feds In Ogilvy, ONDCP Case

Almost 600 staffers. More than 1 million documents. And over 300,000 e-mail messages. That’s only part of what one prosecutor called the “breathtaking” scope of the government’s ongoing investigation into billing practices on the Office of National Drug Control Policy account during Ogilvy & Mather’s tenure on the business.

The numbers were revealed in court papers and in a federal court hearing on Nov. 8, at which two former Ogilvy & Mather executives won the right to hear more details of the bill-inflation accusations that federal prosecutors have made against them. Prosecutors and FBI agents took 59,839 timesheets from the 584 staffers they believed worked on the business; 1.3 million pages of documents; and 327,366 e-mails (2,478 of which had viruses, according to the defense).

Judge Richard Berman ruled that former senior partner/executive group director Shona Seifert and ex-senior partner/director of finance Thomas Early should be allowed to see lists of witnesses that the Department of Justice intends to bring against them in their February trial.

Two possible names on the witness list are Peter Chrisanthopoulos, former director of broadcast at WPP Group’s Ogilvy and sister agency MindShare, and Bob Zach, former strategic planning director for media. (Chrisanthopoulos pleaded guilty to a sealed indictment in February, sources said that month.)

The U.S. Attorney’s office in Manhattan last week confirmed Chrisanthopoulos’ plea but said documents detailing it remain sealed. Zach, sources said, was a witness who cooperated with the feds. Prosecutors might also use statements given to them by Al DiOrio, who managed the ONDCP contract in Ogilvy’s finance department. DiOrio died after he left Ogilvy in 2000.

Seifert, currently on leave from her job as president of Omnicom Group’s TBWA\Chiat\Day in New York, and Early, who resigned from Ogilvy in January, have pleaded not guilty. Both attended the hearing. They declined comment. Ogilvy, which cooperated with the government during its investigation, declined comment.

Prosecutors filed papers naming a handful of other Ogilvy executives whose desks, offices and cubicles yielded evidence. In a memo to Seifert and Early’s lawyers, prosecutors indicated that they took information from the computers of DiOrio, Zach, budget staffer Nina Hyer, MindShare administrative assistant Bill Evans and mOne CFO Cathy Borzon. The latter three either declined comment or did not return calls. Zach could not be reached.

The defense last week informed the judge that it was about to start serving subpoenas on witnesses it wanted to hear from. Those subpoenas—which can be expected to land most heavily in Ogilvy’s New York office and at the client in Washington—started going out last week, Seifert’s lawyers told the court.

The trouble began in July 1999, before the agency sent the White House its first bill on the business, the new indictment alleges. Executives discovered that Ogilvy was projected to spend about $3 million more servicing the account than it would make in revenue from the business, even though billings were more than $100 million per year, the feds allege.

So Seifert, Early and other, unidentified “co-conspirators” instructed 16 Ogilvy staffers to resubmit their timesheets with increased hours, the document states. They also laid down a blanket rule that certain staffers record a percentage of their time on ONDCP timesheets regardless of whether they worked on it, the feds wrote.

In response, the defense has focused on details and procedure. Seifert and Early’s lawyers have complained about not receiving a “veritable boxcar of electronic data” in a timely or useable fashion and about the government’s confusion as to whether it had Seifert’s hard drive. (It appears it did not, but it had copies of many files from it, Assistant U.S. Attorney Kim Berger later wrote.) The defense has also demanded any tapes of any wiretapped calls the government may have.

Ogilvy worked on the business from the beginning of 1999 to September of this year. Interpublic Group’s Foote, Cone & Belding won the $130 million business in October [Adweek, Oct. 4].

—with Wendy Melillo