ONDCP Trial: Defense Paints Zach as a Liar

NEW YORK Defense attorneys for former Ogilvy & Mather executives Shona Seifert and Thomas Early today painted star prosecution witness Bob Zach as a liar following his testimony earlier today that he and Seifert devised a plan to pad timesheets to cover a $3 million revenue shortfall on the White House's Office of National Drug Control Policy account.They said Zach, motivated by money, asked group heads at Ogilvy to alter their timesheets to fraudulently bill hours to the ONDCP, without direction from either Seifert or Early.In his earlier testimony, Zach said that when it became clear the plan could not fill the entire $3 million gap, Seifert, a former executive group director, suggested the media department fast-track its pending new hires and bill their time entirely to the ONDCP, regardless of what accounts they actually worked on.Early, formerly an Ogilvy senior partner and finance director, okayed that plan, and approved the hiring of those media employees, Zach said.Seifert and Early are on trial here in U.S. District Court, accused of masterminding a scheme to overbill the federal government. Both have pled not guilty.The day started well for the prosecution, with Zach, a former strategic planning director for the WPP Group shop, telling jurors that prior to his arrival, the Ogilvy team overestimated how much revenue they would derive from the ONDCP contract. The discrepancies were discovered mid-year, in 1999, shortly after Al DiOrio was hired to oversee accounting on the complex government account, Zach said.Initially, the deficit was attributed to missing timesheets not filed by staff, primarily in the media department, Zach said. But once those timesheets were largely accounted for, Zach and DiOrio devised a plan to fill the revenue gap by increasing the percentage of time staffers budgeted to the ONDCP business, regardless of the actual time they spent working on that account, he said.A bogus staffing plan, submitted by Zach on June 30, 1999, significantly increased the amount of time budgeted per individual. Zach, who at the time was also working on the shop's Eastman Kodak business, increased his time commitment to the ONDCP account from 50 percent to 85 percent. Media buyers initially scheduled to work on the government account for 28 percent of their time were to bill 40 percent of their time to ONDCP, regardless of whether or not they worked those hours. The time commitment for one group head tripled from 10 percent to 30 percent, according to documents submitted by the prosecution.The prosecution entered into evidence a series of e-mails circulated among DiOrio, Zach and Seifert, that Zach said contained veiled references to the alleged fraud.One e-mail from DiOrio, who is now deceased, said staff "will need to review their numbers to reflect a more accruing accounting ... since they are reporting well below what we anticipated." "That was sort of a code word for 'They need to go back and revise their time sheets upward,'" Zach said.Zach said he was ordered by Seifert and DiOrio in December 1999 to recall all timesheets going back to the start of the year and ask his staff to revise them to reflect higher billed hours on the ONDCP business. The defense hammered away at Zach's integrity by repeatedly grilling him about lies he told to federal investigators looking into the ONDCP case. They also quizzed him on his role in revising the timesheets.Zach said he decided to cooperate with investigators in 2003, shortly before he pled guilty to one count of felony fraud, and struck a deal with the government to testify for the prosecution in return for possible future leniency. But, defense attorneys claim, he lied again in a separate legal matter.In a notarized letter dated August 2004, Zach admitted to the Connecticut Real Estate Board that he had been convicted of a felony, but said as a condition of his cooperation in the ONDCP case he would receive no jail. In fact, a federal judge had instructed him there are no guarantees about his possible sentencing and that he could go to jail for up to five years, according to a letter outlining the terms of his deal. When initially questioned about it yesterday, Zach told the jury he had "implied" to the Connecticut Real Estate Board that he would get no jail time.Finally, the defense suggested Zach's personal finances were stretched thin in 1999 after a lawsuit brought by a homebuilder and the purchase of a $150,000 Ferrari in May of that year.Zach denied that he was counting on a bonus to buffer his $180,000 salary. He insisted the angry attitudes of Early and Ogilvy co-president Bill Gray over the shortfall sparked the alleged timesheet deception.The cross examination of Zach will continue in court tomorrow.

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ONDCP Trial: Defense Paints Zach as a Liar

Deanna Zammit

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Deanna Zammit