Submitted by Diane Farsetta on
The Chicago-based ad firm Leo Burnett "has agreed to pay $15.5 million to settle charges that it over-billed the U.S. Army for work on its 'Army of One' campaign," while still claiming that it "believes the government's claims are without merit." Leo Burnett is charged with inflating its expenses on the Army account, by billing for work done by its Internet division as if the division were an independent subcontractor, and by excluding "lower cost smaller subcontractors [when] proposing, negotiating and billing its hourly rate in 2000 and 2001." Details of the over-billing were provided by two former Leo Burnett employees who became whistleblowers and filed suit against the firm in 2004. Leo Burnett worked on the "lucrative account" for five years, attempting "to craft a campaign that would help stop shortfalls in the Army's recruiting and retention targets, which were being hampered by the Iraq war." Leo Burnett is part of the Publicis Groupe communications giant; Interpublic Group's McCann-Erickson now has the Army contract. "This isn't the first time a Madison avenue firm has become embroiled in an over-billing scandal," notes the Wall Street Journal. In 2002, WPP's Ogilvy & Mather paid $1.8 million to settle charges that it had over-billed the White House Office of National Drug Control Policy.