Ogilvy's Seifert Praises Gray Despite Role in Scandal That Sent His Wife to Prison

Last Updated Sep 23, 2009 2:12 PM EDT

Ogilvy & Mather vice chairman Bill Gray is retiring, leaving John Seifert* to head the agency as Ogilvy North America Chairman. The move, which was expected, was accompanied by this extraordinary memo from Seifert to the agency, according to Ad Age. It says:
Bill has so much to be proud of in his Ogilvy career, and we have much to thank him for. I would not have the leadership opportunity in front of me today without Bill's wise counsel and unconditional support.
Bill is as 'Ogilvy Red' as they come ... and always will be.
What Seifert (pictured) is pointedly not referring to are the parts of Gray's career that he is less proud of, particulary his role in the White House anti-drug campaign scandal, in which six -- six! -- of his top managers were convicted of trying to defraud the government.

Seifert's wife, Shona, did 18 months in prison in that caper, which prosecutors said started because Gray was angry that the agency wasn't making enough money on the account. Here, lest we forget, is a recap of the tangled history between Gray and the Seiferts:

The scandal started because Gray signed a contract with the Office of National Drug Control Policy that required his agency to have a sophisticated federal government billing system to handle the business. Ogilvy had no such system. Adweek:

Bill Gray, president of the WPP Group agency's office here, was grilled on the stand [in Shona Seifert's federal court trial] and forced to admit he signed a contract with the government worth more than $600 million that stated Ogilvy had the correct federal accounting procedures in place when it did not.
"You don't have a clue do you?" one defense lawyer said to him about the contract.
"You could say that," Gray replied.
Unable to bill the government properly, Ogilvy soon ran up a revenue shortfall on a business it thought was worth $14 million. Gray ordered Shona Seifert (John's wife) to "fix" the problem. So Seifert et al began filling out bogus timesheets to inflate Ogilvy's billing records. Adweek, again:
There was no indication that Gray was accused of any wrongdoing, although the government's theory of the case is that Seifert and Early came up with the timesheet caper after Gray became angry that the agency was going to make about $3 million less on the business that it though it would. "Get a fix on it," he ordered the pair. "In a matter of a few days," he said, one of them told him in a phone call that "they had a handle on it."
The Department of Justice believed that many of Gray's people were in on the scheme:
The prosecution's theory of the case is that [CFO Thomas] Early and [Shona] Seifert masterminded the scheme after Gray became angry when revenue on the business came in far lower than projected. In evidence, prosecutors have introduced timesheets, staff lists, e-mails and handwritten notes naming virtually every agency senior media manager as having some level of involvement.
Ogilvy & Mather account chief Shona Seifert got 18 months in federal prison in 2005. Ogilvy CFO Tom Early got 14 months. Also pleading guilty but not receiving time were media director Ray Simko, contract coordinator Al DiOrio, broadcast director Peter Chrisanthopoulos (now at Katz Television Group), and planning director Robert Zach. Several other Ogilvy execs became cooperating witnesses rather than face charges.

So why is John Seifert praising Gray when the ONDCP scandal ruined the life of him and his wife? We don't know. Shona Seifert insisted on her innocence throughout the trial. Presumably, the Seiferts still believe that they and Gray did nothing wrong.

* Correction: The original version of this story incorrectly referred to John Seifert as "Tom Seifert." His name is of course John. Apologies for the error.