Ogilvy executives fraud trial

Greetings from the western U.S. 1st post. Anybody following the ONDCP trial?

Hellyeah, did you see that bit about timesheets? "we don*t need no stinking timesheets"



( Padded timesheets at Ogilvy, Federal prosecutors not pleased <!-- BBCode auto-link start -->http//ad-rag.com/117929.php<!-- BBCode auto-link end --> )





But youknow, I think the Grey scandal is much funnier, what with getting a couple of prostitutes as kickback! That one is out there.



(here <!-- BBCode auto-link start -->http//ad-rag.com/114944.php<!-- BBCode auto-link end --> )

It*s looks like a totally anal, government beancounter started it all.



We*ve been discussing it around the office. Ethically, Ogilvy should have gone to the ONDCP and said, *Hey look we saved you 3 million bucks!*



Our point of debate was this... If a client has already agreed to a certain amount of cash to the agency for an account, and the agency realizes that their billing (voluminous, complicated U.S. government billing at that) is going to fall short of that amount; are they still intitled to the projected profit?



We*ll give you that the way Ogilvy went about making up the shortfall was idiotic to say the least.

I*m going to look at the Grey scandal link. Thanks.

> We*ve been discussing it around the office. Ethically, Ogilvy should have gone to the

> ONDCP and said, *Hey look we saved you 3 million bucks!*



aye, that would never happen though. lol



They could have just blown it all on liquid lunches too. I think the whole story is nuts... and Time-sheets? I*ve been told to lie on them since my career started!

>>They could have just blown it all on liquid lunches too.



I*ll drink to that!

Former Ogilvy senior partners Shona Seifert and Thomas Early were convicted today on all counts.



From the no shit Sherlock department of the NY Times "Government clients often require levels of record-keeping more exacting and complicated than ad agencies typically are used to."



Hey Dabitch; Maybe Color Wheel can get Early some Hookers before he goes to prison.

(reference to the Grey scandal which she has linked here)

Wow, they were found <!-- BBCode Start -->guilty<!-- BBCode End -->!



By the sound of teh adage article, and a few gossipy people who know Shona*s husband, say that he broke down and cried when the verdict was passed.



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As each of the 12 responded with a simple "yes," Ms. Seifert sunk her face into her hands. Her husband, sitting in the gallery as he has since the trial began earlier this month, did the same.

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She*ll probably be deported back to the UK.. What a way to end a NYC career...

That adage article makes it read like the prosecution didn*t prove anything either. What a lousy defense.

>>Our point of debate was this... If a client has already agreed to a certain amount of cash to the agency for an account, and the agency realizes that their billing (voluminous, complicated U.S. government billing at that) is going to fall short of that amount; are they still intitled to the projected profit?

>>

Hmm, let*s say the ad-verve*s are going to add a 750 square foot addition to their home. After exhausive home construction research they conclude a budget of $200 per square foot is reasonble. They need $15,000 to complete the renovation (which they happen to have in the bank...even on an ad execs salary). They hire a contractor, named chasworth to complete the work. After reviewing the ad-verve*s plans, chasworth says, "you really have done your homework, $200 per sqaure foot is right on the money when it comes to budgeting." After completing the reovation chasworth is adding-up his actual time and material costs, the total comes to $12,500. Chasworth bills $15,000 because that was the budget both parties agreed to.



The ad-verves get their invoice for $15,000 and notice contractors actual costs only add up to $12,500. Do they



a) Pay the $15,000 because they originally agreed to the budget (and heck they have the money in the bank anyway)?

b) Pay $12,500. Because that is actual amount vendor earned on the project?



You make the call.

c) Chasworth executives realize they*re going to fall short on their billing projections (though they believe they have actually worked on the account more than they have billed due to *billing mistakes*) then order Dabitch to lie on her timecards (as she has been told to do since she started in this business) so that they hit their goals?



d) Chasworth takes the clients out to dinner and persuades them to spend the shortfall with them anyway?



e) Chasworth gets his vendors some hookers so that his vendors will bill for their services however Chasworth needs them to; insuring Chasworth has no shortfall.

teeny derail, but I thought I*d let y*all know how that timesheet lying started.



A young green wet behind the ears AD at multinational major agency with alphabetsoup name gets timesheets and fills them in with hours, name of client, and the allimportant <!-- BBCode Start -->project number<!-- BBCode End -->. One week she has no project numbers to go on the time sheet. What to do? Ask for advice from traffic/group head people "Got no project number this week, do I just leave the week blank?"

- "What did you do this week?"

- "Helped senior AD to find stock shots for a project that is not mine, mounted hundreds of boards for the senior teams that had the [clientname] pitch, another project that is not mine, researched [client] with the R&D guy downstairs for a project that I might get in two weeks, he*s writing the strategy and briefing."

- "Bah, just put last weeks client project number on you sheets this week."

- "Uhm, but that was a small space personnel ad.. It took me no longer than 3 hours from start to finish. Not the whole of last week, <!-- BBCode Start -->and<!-- BBCode End --> this one."

- "Just do as your told, and don*t bother me with this sort of thing again."



Six month later someone was suprised that I managed to work on a small space personnel ad for a full month. Nothing was done about it. And that*s how the whole thing started.

"Just do as your told, and don*t bother me with this sort of thing again."



Sincerely,



Shona Seifert



smile



SHONA SEIFERT IS OUT AT TBWA/CHIAT/DAY

Agency Says Departure Was by *Mutual Agreement*



"Shona we want you out; do you agree?" "Good, you*re gone."



She*d been on paid leave for the trial anyway.

Paid leave for the trial? Shona had it made.





Oh, what prison will she serve her time in? It just struck me that it could make for a helluva reality show...

Maybe she*ll room with Martha...or is she out already?

Couple of things



First of all, I started off believing that the government was being very heavy handed in this case. But then I looked at the evidence. Most of it was documented in a paper trail (or, in this case, an email trail) a mile long. And the emails were, in some cases, quite explicit in detailing the conspiracy to defraud the government.



Seifert may have evaded most of this as she wasn*t in several key meetings or copied on key pieces of email correspondence, except for the fact that a note in her handwriting attached to a stack of time sheets was presented into evidence in which she directed one of Ogilvy*s employees to falsify time sheet records.



So that*s the first thing. Was there a conspiracy to defraud the government? Undoubtedly, yes there was.



Second thing should ad agency compensation be based on hourly billing? This is a whole other can of worms. Since the demise of the 15% commission, agencies have sought a different billing model and have ended up, mostly by default, using the same model that lawyers and consultants use. Which is, basically, to bill clients on an hourly basis. But frankly, this is ridiculous, as the contractor example above shows.



Agencies are not in the business of selling someone hourly based services. How long does it take to develop an award winning ad, for example? We*re selling an intangible service, namely ideas. What*s an idea worth? Inevitably the answer is "How much are you willing to pay?"



The government signed a contract with Ogivly to pay a certain fee for certain services. There*s no doubt that Ogivly delivered -- even saving the government millions of dollars by securing free media time for their anti-drug messages. Yet they got caught up in this accounting scandal because of the way in which they structured their contract.



What*s wrong here is the way in which agencies are getting paid. And the fact that our services are so undervalued.

>>Maybe she*ll room with Martha...or is she out already?



At *Camp Cupcake.*



That*s what they called Martha*s prison in the U.S.



"What*s wrong here is the way in which agencies are getting paid. And the fact that our services are so undervalued."



I agree with that statement. Madison Avenue definitely took notice of the trial; and you can be sure that there will be new billing procedures in place; especially when it comes to the government. We certainly don*t bill our advertising staff out by the hour as a s.o.p.



Anyone care to share how their shoppes handle the billing of clients? Obviously there should be thousands of different answers.

Mark Wneks 2 cents.



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While US advertising industry buzzes over Shonagate - the conviction of Ogilvy NY account director Shona Seifert for falsifying timesheets (the forms where hours worked on a particular account are noted so they may be billed to clients) on the Drug-Free America (DFA) account, the poignant story is that of Shona*s husband John. John is still an employee of Ogilvy NY, going to work every day among people who may have appeared as prosecution witnesses against his wife. While I*m not familiar with the precise details of the crime, and while I haven*t seen her for 20 years when we were both juniors at ad agency Ogilvy London (also there was JWT London CEO Simon Boulton and BBDO Worldwide chief Andrew Robertson), I feel a bit sorry for Shona, a small, bubbly and charming woman whose transition to jailbird-to-be is hard to get your brain around. As account director in charge of the DFA account, Shona was "rumbled" years ago when a snap audit of some kind turned up Tippex-spattered timesheets. While the case was being brought, Shona left Ogilvy and became president of TBWA New York - a role now subsumed under TBWA group president Brett Gosper, my old business partner at Euro RSCG. Falsifying timesheets is a famous crime it*s what helps Tom Cruise to bring down the firm in the movie of the same name. The fact that DFA is a governmental body seems to have sealed Seifert*s immediate future as US adland*s very own Martha Stewart. Meanwhile, the industry crosses its fingers that Shonagate is the whole iceberg and not just the tip.

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