The World: Chicago - Leo Burnett to pay out over US Army allegations

Leo Burnett will pay the US Army $15.5 million in order to settle allegations that the agency overcharged the government institution.

The lawsuit emerged in 2004 when two staff members at Leo Burnett alleged that the agency exaggerated the costs of the subtractors that it used for work on the account. It was also alleged that the agency charged for work done from its own internet units as if it had been commissioned from a third party.

Leo Burnett initially fought the allegations, but a memo to staff by the chairman, Tom Bernardin, has announced that it would settle with the Army in order to cut costs in the long term.