ONDCP Case Goes to Jury

NEW YORK The fate of former Ogilvy & Mather executives Shona Seifert and Thomas Early now rests with the jury following the conclusion of defense summations today at their trial here in U.S. District Court.

The pair stand accused of plotting to overbill the Office of National Drug Control Policy to cover a $3 million revenue shortfall on the $1 billion account. They have pled not guilty.

The jury began deliberations this afternoon and will resume the process on Tuesday.

If convicted, Seifert and Early could each be sentenced to a maximum five years in prison.

Early’s lawyers finished their closing remarks today.

The prosecution began the trial by claiming the defendants were motivated by “lies and greed.” But Seifert’s lawyer, Greg Craig on Thursday told the jury the evidence showed that as the former executive group director regularly worked 80-hour weeks, “in Shona’s world there was no time for any of that.”

He appealed to the jury to treat his client charitably because she worked so hard on the business. “On the basis of character evidence alone there is no doubt,” Craig said.

Indeed, he reminded jurors, the main client executive—former ONDCP director Alan Levitt—had testified that Ogilvy provided as much as $20 million in unexpected added value on the account (mainly through negotiating free network TV time for anti-drug ads).

“This trial will go down in the history of jurisprudence as the only fraud where the victim came out ahead,” Craig said.

Craig’s closing remarks, long on superlatives such as “service, sacrifice, generosity and leadership,” came after a blistering summation by assistant U.S. Attorney Lauren Goldberg.

Goldberg turned Seifert’s reputation as a master of messaging and communications against her. It was Seifert who masterminded the plan to persuade dozens of Ogilvy staffers to fraudulently alter their timesheets to bill hours to the ONDCP account they had not actually worked, Goldberg said.

“The instruction was carefully crafted by Shona Seifert … The orders were to be transmitted using innocent-sounding code words such as ‘re-evaluate,’ ‘reflect’ and ‘think carefully,'” Goldberg said, because Seifert knew “we cannot say [the truth] to them.”

In an attempt to reveal cracks in Seifert’s testimony earlier this week, Goldberg pointed to a seemingly trivial e-mail in which Seifert had made a joke about forgetting to include former contract manager Al DiOrio in a previous message. Seifert wrote that she supposed DiOrio, who was overweight, was “the same size” as everybody else when it came to e-mails.

On the stand, Seifert had insisted the remark was not a joke about DiOrio’s weight. But Goldberg said, “She couldn’t even own up to the fact she made a mean joke about Al DiOrio’s size in an e-mail.” The moment was made all the more uncomfortable for the defense because the jury had heard DiOrio ultimately died of diabetes following several amputations.

Goldberg put together a string of e-mails implicating Early’s as the other organizer of the attempt to “make the numbers” before the end of the year. In those e-mails, which Early had been forced to revisit Thursday during his testimony, DiOrio had said he believed Ogilvy’s revenue on the ONDCP was going to come in at $13.1 million for 1999.

On Nov. 8, 1999, Early responded, “Al, we really need to be at $14MM,” and listed several people whose time could be “increased.”

DiOrio then wrote to Early on Nov. 15 that if the media department did not produce its “missing timesheets” by the end of the year, it “can spell disaster for our 1999 plan.”

The next day, Early wrote to several senior Ogilvy media executives: “You need to resolve this NOW before we have absolutely no time left.”

But one of those executives, former director of local broadcast Abby Auerbach, developed a crisis of conscience. Instead of telling her staff to inflate their hours, she instead made vague suggestions to her underlings that they ought to “re-evaluate” their hours. Her indirect approach left her department billing far less than Ogilvy’s projections required.

Early was told of Auerbach’s qualms on Nov. 17 in an e-mail from former Ogilvy strategic planning director Bob Zach: “Abby wants to discuss this with you directly … she has spoken to her buyers several times after my complaints and the problem persists. She’s unsure how to get compliance without being transparent.”

“That e-mail speaks for itself,” Goldberg said.

The prosecutor also reminded the jury of a note Early scrawled to himself before a meeting with New York co-president Bill Gray. It said: “Discuss w/ Bill: ONDCP-Spoke w/ Shona the fee is now projected at 14.2 w/o adjusting timesheets for the first 6 mos. We will know better by 8/23.” The fee Ogilvy expected for the year was $15.7 million.

“There is no possible explanation” for that note, Goldberg said. “Instead, the defense wants you to believe this was all about the color of the ink and incorrect codes.” That was a reference to testimony that many timesheets had to be revised because they were not submitted according to the government’s extremely stringent rules.

When Craig rose to counter Goldberg’s speech, he first reminded the jury of the favorable impression Seifert made on the stand a few days earlier. “Everyone loves Shona, you heard this from everyone who works with her and those she worked for … the government has spent no time on this part of the story because they fear the truth.”

As he moved toward the document and witness testimony, Craig also admitted that a crime had in fact taken place inside Ogilvy: “Bad things happened in the media department. Good people were made to do bad things and that was wrong.”

On Wednesday, Early conceded that some timesheet entries appeared to be inaccurate, but this was the first time that Seifert’s lawyers openly admitted the same.

But, Craig said, those people, many of whom testified earlier, should not be believed when they said it was Seifert’s plan. “Do you really believe that Shona is going to call someone up outside her department and give instructions on how he should be billing?” he asked, referring to former president of national broadcast Peter Chrisanthopoulos’s testimony that Seifert told him to increase his ONDCP timesheet hours.

“There is not one witness” to corroborate the existence of that call, he said.

The government, Craig said, wants the jury to believe “she is spinning like any other advertising executive would do in the same situation.”

Craig ended his remarks by pointing out a lengthy list of inconsistencies in witness testimony, several of the former Ogilvy executives appear to have told different versions of the events to different sets of investigators over the years.

This story updates an item posted on Feb. 17 with news that the jury has gotten the case.