Taking the Drug Czar
The U.S. subsidiary of one of the largest advertising agencies in the
world has agreed to pay the United States $1.8 million to resolve claims
that the company overcharged the Office of National Drug Control Policy
Ogilvy & Mather North America will pay the government to settle claims
under the False Claims Act and administrative claims that the firm overcharged
ONDCP, also known as the Drug Czars Office, in 1999 and 2000 for
labor costs on a contract to provide advertising services.
Ogilvy will pay $689,744 in cash and will submit amended administrative
claims for incurred costs on the contract to reflect a reduction in incurred
costs claimed of $1,150,256.
Ogilvy & Mather has a cost-plus fixed-fee contract to provide advertising
services for ONDCP.
The settlement resolves allegations that Ogilvys labor charges
in the advertising firms invoices for work performed in 1999 and
2000 were based on inaccurate timesheets submitted by employees and that
the companys management did not exercise reasonable control to ensure
that billings for labor were accurate.
The Winnie the Pooh Files
Walt Disney Company has systematically destroyed massive amounts
hundreds of boxes and thousands of pages that
might have shed light on whether the company withheld or underreported
royalties to Stephen Slesinger Inc. the company that holds the
majority of North American rights to A.A. Milnes Winnie the Pooh
Thats according to recently unsealed documents in a 10-year old
case by Slesinger Inc. against Disney being fought out in state court
in Los Angeles.
Slesinger claims that it has been shortchanged hundreds of millions of
dollars on royalty payments for videos, computer games, stuffed animals
and theme parks.
Last year, Los Angeles Superior Court Judge Ernest Hiroshige issued an
injunction against Disney destroying other documents related to the case.
In June 2000, Hiroshige ordered Disney to pay $90,000 in monetary damages
for the destruction of documents.
New evidence that emerged in January shows that Disney destroyed 400
to 500 boxes of documents 10 times the number of documents Judge
Hiroshige estimated were destroyed when he sanctioned Disney in 2000.
Disneys lawyer Daniel Petrocelli told reporters that Disney
itself came forward to advise the court and the plaintiff that old obsolete
files that had nothing to do with the case had been discarded years before.
But Slesinger lawyer Bert Fields asked, Why would a conservative
judge order Disney to pay $90,000 for destruction of documents if they
had nothing to do with the case?
Are you trying to tell me that a file titled Winnie the Pooh
legal problems had nothing to do with this case? Fields asked
incredulously. That file was also destroyed.
Field said a trial in the royalties case should be set before the end
of the year.
Fields said that damages could reach into the hundreds of millions of
Disney announced publicly that Pooh licensing revenue was $3.3
billion for one year 1998, Fields said. Stock analysts
estimated that in the year 2000 it was $4.5 billion. Disneys internal
projection was $6 billion.
More Chapter 11 Horrors
Crompton Corporation, a U.S.-based pesticide manufacturer, notified Canadian
authorities in November 2001 that it intends to pursue a $100 million
claim against Canada for Health Canadas de-registration of the toxic
pesticide lindane for treatment of Canadian canola crops.
The claim is to be filed under NAFTAs Chapter 11, which gives corporations
standing to sue governments directly for compensation related to regulatory
decisions that can be characterized as an expropriation of
company property [see NAFTAs Investor Rights: A Corporate
Dream, a Citizen Nightmare, Multinational Monitor, April 2001].
Lindane is known to be a powerful toxin, says Kristin Schafer
of Pesticide Action Network North America. It is already banned
in Europe and many other countries. No government should be forced to
import such a toxin or to pay fines when it takes steps to protect public
health. According to the Pesticide Action Network, lindane is also
banned for use on canola in the United States.
Lindane is persistent in the environment, highly toxic, a suspected endocrine
disrupter and has been linked to breast cancer.
Documented health effects include dizziness, seizures, nervous system
damage, immune system damage and birth defects.
Lindane has been found in breast milk and blood samples throughout the
world, and it is found more often than any other persistent chemical in
the arctic environment.
Environmental groups called on Canada to stand up to Crompton and to
neither pay the money demanded nor settle the suit. The government
of Canada must not give in to corporate bullies like Crompton, says
Angela Rickman of Sierra Club Canada. Canada must demonstrate that
it will not let narrow corporate interests dictate the health of its citizens.