ONDCP Witnesses: Seifert Ordered Timesheet Changes

NEW YORK Three witnesses told a court Wednesday that Shona Seifert, the Ogilvy & Mather executive who led the White House’s $1 billion anti-drug ad account, told them to falsify their timesheets by inflating the number of hours they worked.

In addition, Bill Gray, president of the WPP Group agency’s office here, was grilled on the stand and forced to admit he signed a contract with the government worth more than $600 million that stated Ogilvy had the correct federal accounting procedures in place when it did not.

“You don’t have a clue do you?” one defense lawyer said to him about the contract.

“You could say that,” Gray replied.

The day started badly for the defense when lawyers for Seifert and her co-defendant, former director of finance Thomas Early (both of whom have pled not guilty), accidentally rehabilitated a prosecution witness who had given unconvincing testimony the day before.

That witness, managing director of Ogilvy’s consumer research group Johanna Shapira, told the court yesterday that Seifert had said something to her in passing about increasing her hours for the Office of National Drug Control Policy, but that she had done nothing about it.

Seifert’s lawyer inexplicably revisited that conversation in testimony today, and Shapira spelled it out in more detail. “[Seifert] said, ‘If you are working any hours on Five Brothers or MotherNature.com [two other Ogilvy clients] you can just put those hours on ONDCP,'” Shapira testified.

Prosecutor Lauren Goldberg pounced on her during re-direct examination, and Shapira repeated her claim: “If I was working any hours on other clients I should take those hours and put them on the ONDCP.”

Two more witnesses made similar claims. One, former account executive Melissa Cunningham, went into detail about how the alleged scam worked.

In 1999, she filled in timesheets, which often recorded that she had not done any work for the ONDCP because she was working for other clients, such as Duracell or U.S. Satellite Broadcasting, Cunningham said. Those timesheets were sent back to her, she testified, with certain hours circled and the handwritten notation “OND01” scrawled underneath. The code was the client number for the ONDCP, she said. Cunningham then filled out a new timesheet and submitted that. In some weeks, Cunningham said, she billed all her time to the ONDCP when she had done no work on the account.

The timesheets were all signed by Seifert, she testified: “She asked me to take the amount of time circled … and reallocate it to ONDCP.”

Cunningham, currently employed at Saatchi Consumer Healthcare in New York, broke down on the stand when Seifert’s lawyer, Greg Craig, forced her to admit that she had repeatedly lied about Seifert’s role to Ogilvy’s lawyers and officials from the FBI, the Government Accountability Office and the U.S. Attorney’s Office, right up until December of last year.

In all those interviews, Cunningham said, she claimed that she did not remember whether Seifert or Ogilvy contract coordinator Al DiOrio told her to alter her timesheets. It was only when the U.S. Attorney’s Office offered her a non-prosecution deal that she told the truth, she said, which was that Seifert had told her to do it.

She wept on the stand as she tried to explain the lies. At first, she was afraid to name Seifert in case she was fired. Later, when she realized that she would have to take an oath in court, “I felt really guilty. I just couldn’t do it.”

Craig did not appear to buy it, and despite her tears hammered her repeatedly on the fact that her version of the “truth” only emerged on Dec. 2, 2004, resulting in the Jan. 3, 2005 cooperation agreement.

Cunningham’s testimony was followed by that of Bob Zach, a former strategic planning director for media at Ogilvy and one of the prosecution’s star witnesses. “I pled guilty to conspiracy to defraud the federal government, working with others—Shona Seifert, Thomas Early, Peter Chrisanthopoulos, to name a few. We conspired to inflate the time recorded against the government account,” he said.

Then, when the government began investigating Ogilvy’s billings, “I basically tried to cover up the whole fact that we had inflated the hours,” he testified, mainly by being “evasive” when he was interrogated by the Department of Defense, GAO, FBI and the Department of Justice.

The day’s hearings came to an end before Zach got into any more detail about his role in the alleged plot, but it was significant in that it was the first time any witness or document has made any mention of Early’s involvement.

Preceding him on the stand was his former boss, Bill Gray. In addition to revealing that Gray signed a contract with the ONDCP promising certain accounting procedures that Ogilvy was unable to deliver, Gray also squirmed as he was questioned about the agency’s revenue during the years it handled the business.

At one point he was shown a graph of Ogilvy’s revenue during 1999, prepared for him in an internal agency memo. When asked to describe Ogilvy’s revenue at that time, he at first responded “I can’t recall.”

Later, under cross-examination, he was asked to have another go at interpreting the chart, but he said he could not. “I’m not sure based on this chart,” he said, whether the money ($200 million in one quarter) was booked revenue or projected revenue. “You can read this chart two ways,” he said.

Much of Gray’s testimony was peppered with phrases such as “I don’t recall” and “I can’t speak to that as a fact.”

The prosecution had summoned Gray as a witness largely to establish Seifert and Early’s alleged financial motive for the billing scheme.

Gray testified that Seifert’s salary was $200,000, and that she received a $130,000 bonus as a reward for work done on ONDCP. Seifert’s compensation also included an $8,000 car allowance and a $3,000 “executive health plan,” documents displayed to the jury showed.

Early’s salary was $145,000 until he received a bump up to $200,000, prosecutors demonstrated.

There was no indication that Gray was accused of any wrongdoing, although the government’s theory of the case is that Seifert and Early came up with the timesheet caper after Gray became angry that the agency was going to make about $3 million less on the business that it though it would. “Get a fix on it,” he ordered the pair. “In a matter of a few days,” he said, one of them told him in a phone call that “they had a handle on it.”

With the shortfall apparently disappearing, Gray said, he then approved a salary increase for Seifert.

The trial is taking place in U.S. District Court in New York.