Drug office takes hit
Hill scolds White House agency for possible mismanagement
By Paige Albiniak -- Broadcasting & Cable, 10/8/2000 8:00:00 PM
The White House's Office of National Drug Control Policy came under fire from a House panel last week for allegedly mismanaging its $1 billion anti-drug media campaign.
"We need to determine whether the ONDCP media campaign management has the talent and objectivity to oversee effectively the nation's largest public media campaign and its contract with one of the world's largest advertising companies," said John Mica (R-Fla.), chairman of the House subcommittee on government reform.
The subcommittee's concern arose from a General Accounting Office report that alleges that Oglivy & Mather (O & M), which is handling the campaign for the ONDCP, overcharged the government and could be criminally liable.
ONDCP is budgeted to spend $875 million on media over five years. As much as $684 million of that could be spent with O & M.
The GAO began its investigation last April after anonymous sources "cited problems of financial mismanagement, overbilling, possible contract fraud, and negligent administration of contract funds," said Mica.
According to GAO, former O & M executive Dan Merrick also tipped off ONDCP to possible problems. The agency commissioned an internal consulting report late last March to find out whether O & M had overcharged.
In that report, Jane Twyon of Worldwide Consulting found that O & M's costs were running as much as 200% higher than industry averages, which led ONDCP officials to withhold as much as $13.5 million in bills.
In an April 13 memo to Barry McCaffrey, the head of ONDCP, Chief of Staff Edward Jurith outlined his concerns regarding the agency's contract with O & M. In that memo, Jurith reports that a senior O & M executive told him that last summer "Bill Gray, president of Ogilvy, held a meeting with the most senior account staff and complained about the lack of revenue with this contract."
Jurith also says his source "alleged that time sheets were altered to increase the number of hours worked against the ONDCP contract." On the follow-up billings, there were additional charges for the services of people who had not worked on the contract during the billing period. Shona Siefert and other account management personnel managed five or six other accounts in addition to the ONDCP contract, but charged most of their time to this contract, Jurith said.
O & M pleads innocent. "We have charged ONDCP within the industry standard, and if we learn of any accounting problems, we will address them and make any necessary adjustments," said O & M President Bill Gray.
Subcommittee Democrats alleged that the Republicans were using the issue to embarrass the White House. "I would like to commend the [ONDCP] agency's alert, conscientious staff who decided to withhold payment.before all of this broke," said Rep. Patsy Mink (D-Hawaii).
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