A senior partner of WPP's US advertising subsidiary Ogilvy & Mather resigned yesterday after the US government charged him and a former employee with overbilling the government for an anti-drugs media campaign.
Ogilvy said that Thomas Early, 48, had resigned to devote his time toward being vindicated of the charges which stem from a five-year lucrative contract with the Office of the National Drug Control Policy awarded to the firm in 1998.
The government alleged on Tuesday in an indictment filed at the Manhattan federal court that Mr Early and Shona Seifert, a former senior partner and executive group director, had participated in a scheme to defraud the government "by falsely and fraudulently inflating the labor costs" of the contract.
The government's decision to press charges surprised New York's advertising community because Ogilvy & Mather had already paid $1.8m to settle civil charges in February 2002.
Ogilvy said that it had been co-operating with the government investigation for three years and with the US Attorney's Office in Manhattan for more than two years.
The advertising firm said that its performance with regard to time-keeping on the initial contract "did not meet federal requirements or our own commitment to maintaining the highest ethical standards".