A row has flared up between a number of Washington lawmakers and Leo Burnett over the agency’s handling of the $95 million (€108m; £66m) US Army account.
Burnett has hired law firm Patton Boggs to act on its behalf before Congress as criticism mounts over its relationship with subcontractors Images USA in Atlanta (African American duties) and the Cartel Group in San Antonio (Hispanic marketing).
“I am calling for immediate congressional hearings to investigate possible discriminatory compensation practices by Leo Burnett,” blasted representative Robert Menendez (Democrat, New Jersey).
Such sentiments were echoed by representative Carolyn Kilpatrick (Democrat, Michigan). “Both subcontractors are being treated unfairly,” she argued. “To this day, the African American shop does not have a contract, and I think that is horrendous.”
Under Burnett’s contract with the Army, it receives $208 per hour for creative time and $156 per hour for account services. However, the subcontractors are reportedly paid an average of $90 per hour.
The dispute coincides with the preparation of a lawsuit by the Reverend Al Sharpton accusing the government and ad agencies of conspiring to keep down minority shops' fees.
However, Burnett insisted it was playing fair. “The profit level was decided by the Army,” declared executive vp Ray de Thorne. “The subcontractors are being paid at the rate they requested. The rate was developed by them, and they built in the same profit level as Leo Burnett. We all agreed to share in the incentive bonus proportionally.”
Data sourced from: AdWeek.com; additional content by WARC staff