Ogilvy pays US government $1.8m
in drugs fees dispute

by Staff,, Brand Republic 05-Feb-02, 09:05

NEW YORK - Ogilvy & Mather is to pay the US government $1.8m (£1.3m) to settle a dispute over fees for its anti-drugs work for the Office of National Drug Control Policy.

The agency, owned by the WPP Group, will pay the government $689,744 in cash and slash its current billings by $1.1m. Ogilvy still retains the contract and debuted its latest work during Sunday's Super Bowl.

The US government claimed that O&M had overbilled it for work dating back to 1999. However, because Ogilvy has settled the case, it does not have to admit any wrongdoing.

It released a statement saying only that it had reached a settlement "on matters relating to technical timekeeping errors". The statement also said that "we outperformed the contract and underbilled the [Drug Office] for our work, we recognised our responsibility for our billing mistakes and cooperated fully with the government to resolve them".

It has now developed a new accounting system.

The account is worth in the region of $15m a year to the agency, according to reports, and is renewable on a yearly basis, with Ogilvy's contract expiring in March when there is likely to be a repitch.

Ogilvy's most recent work for the Office of National Drug Control Policy linked the sale of illicit drugs to the funding of international terrorism. The two 30-second spots were directed by British film and commercials director Tony Kaye, who has recently developed a secondary career doing stand-up comedy, dressed as Osama bin Laden.

If you have an opinion on this or any other issue raised on Brand Republic, join the debate in the Forum here.