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The Origin of the Documents

Grey Annual Rebate Report
The memos and transcripts have a convoluted origin. They were originally filed as an unfair dismissal claim in a London employment tribunal by Roy Wilson, Grey London's former CFO. Copies were then obtained by Grey's former New York print-buying chief, Mitch Mosallem.


Mosallem sued Grey in 2005, using the memos as evidence for his claim that Grey breached an attorney-client agreement when Grey cooperated against him in a separate criminal investigation that led to his conviction for taking bribes in exchange for contracts on Grey New York's $6 million print business. A judge dismissed Mosallem's case on the basis that he had no legal claim against Grey for his conviction.

In the tribunal, Grey complained that the accuracy of the transcripts is in doubt because they were made by Wilson's lawyer and not by an independent transcriber; that they were redacted; and contained garbled and "unintelligible" sections, Grey stated.

Next: Grey Mounts a Defense

Procter and Gamble Headquarters
The transcripts begin with former Grey London CEO Steve Blamer –- new to the job at the time -– in a conversation with Wilson, his chief financial officer, about discounts being held for Procter & Gamble (PG), the world's largest advertiser. It's not clear how much money Blamer believed was at stake, but P&G was one of Grey's largest clients at the time:


Blamer: P&G is that much?

Wilson: Yep.

Blamer: Jesus! … I'm telling you, the reality is you as the financial officer and me as the CEO and now Roger [another Grey exec] could be sued. I mean we're cheating and stealing from our clients. That is the truth.

Wilson: It's contrary to contract, certainly.

Wilson claimed he was afraid that he would be blamed for the discounts, according to a copy of his employment tribunal claim:

The only way I thought I could protect myself was to take a tape recording of my meeting with Mr. Blamer …

I did it secretly without asking his permission. … I used my regular office tape recorder which I used for dictation and left it running in my trousers pocket.

Wilson claimed he taped three meetings. Blamer also stated he believed he had been taped in these meetings, according to a copy of his signed statement to the tribunal. In the first transcript, Wilson told Blamer how the discounts worked. Blamer struggled to understand the scope of the situation, the transcript shows:

Blamer: Is it safe to say that we have three accounts, £300,000, at risk on the bottom line if caught, by my estimate, who would ask for the money back?

Wilson: Yes.

Blamer: Have they ever discovered that in an audit?

Wilson: No.

Blamer: And why is that?

Wilson: … I mean to be honest, one has to be a bit surprised that none of them have ever specifically eyeball-to-eyeball and then asked the question since it's a clause in every one of our contracts, but ...

According to the transcripts, each client contract contained different language, but they all said roughly the same thing: Discount or rebate money should be passed back to the client. Blamer left the meeting dismayed, the transcripts indicate:

Blamer: … I believe we should return these discounts, but I'm not going to, I can't make that decision unilaterally. … I also don't want to set up a dangerous precedent here either.

If  … those guys [his bosses at Grey HQ in New York] say that we're not going to do it and we're going to keep the discounts ... then I'll say fuck it that's crazy, send me a note, I want a 'get out of jail free' card.

The second transcript says Blamer and Wilson met with managing director Roger Edwards and Alan Larsen, Grey's financial director. Grey had been keeping discounts and rebates on and off all through the 1990s, the transcripts say. Blamer is quoted as telling them:

Blamer: The reality is we are, and know we are, in violation technically of the contract.

According to the transcripts, the men were convinced that if the agency came clean it would invite disaster: Clients might ask for the discounts they were owed on all their prior years with the agency. One printer was returning 30 percent of Grey's clients' expenses as a rebate to Grey, and Grey was taking in £700,000 in discounts that year, the transcripts state. Grey needed to resolve that "before we walk away from half a million pounds," Edwards said, per the transcript:

Edwards: There's too much money to give back … it's going to damage our business dramatically, unless we are going to be found out.

Edwards then floated a solution, the transcripts say:

Edwards: I have to say I think the best way to circumvent history is not to tell the client but to change the arrangements to move to a different supplier, make a step-change in this, as part of moving to a new supplier we have different terms, "Good news, these terms are more favorable to you, we're handing you back a £30,000 check at the end of the year" or whatever the hell it is.

Blamer, Wilson, Edwards and Larsen met a third time, per the transcript. A particular concern was Mars:

Edwards: Mars is such a vitriolic client, that if they did catch you doing that they would probably punish you very severely. They would take you back years, take a brand off you or something like that.

According to the transcript, Edwards suggested giving the money back to clients incrementally until the discounts were all returned to clients and Grey's debts –- which the clients were not yet aware of -- disappeared:

Edwards: Very quietly add it back on to individual jobs … That, I think, across the board is the way to do it rather than suddenly give them a whacking great check.

Blamer … I like your thinking, the shit sandwich right now is tasting, is not going to taste much better!"

In the end, the transcripts indicate they intended to give back the discounts when Grey entered a new fiscal year. Mars, P&G and SmithKline were all to have their bills adjusted incrementally downward, the transcripts quote them as saying.

Edwards: From next fiscal, new policy, no paper trail, talk to the suppliers and tell those three principal clients and we don't say a word to anyone outside this room.

The agency expected to lose £350,000 (about $510,000), the transcripts state.

Multiple messages left for Blamer and Wilson's lawyer were unreturned. Edwards left Grey in 1999. Reached at home, he declined to comment for this story.

Next: Grey Mounts a Defense

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