A senior Army official was caught on tape kissing and fondling a female contractor who was competing for a $4 billion federal advertising bid that he was supervising, according to videos obtained by DailyMail.com.

The footage comes on the heels of an internal audit that found the Army has wasted nearly $1 billion on ineffective marketing campaigns since 2013.

Army insiders claim the video is evidence of an improper relationship between the Army and McCann Worldgroup, the branch's top marketing contractor.

Records obtained by DailyMail.com also show that multiple complaints have been filed against Army marketing leadership by employees who say they were threatened or harassed after they raised concerns about waste and abuse in the McCann contract.

The video shows married Army official James Ortiz, 62, embracing woozily and kissing McCann Worldgroup executive Molly Berkeley, 48, on a dance floor at the Birchmere, a bar in Alexandria, Virginia, on October 4, 2017. The two were then filmed leaving the bar together with their arms around each other.

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James Ortiz, an US Army marketing group official, is under investigation after he was caught on tape making out in a Virginia bar with Molly Berkeley, a McCann ad agency executive, in October 2017

The two were seen shuffling woozily and kissing while on the dance floor at the Birchmere, a bar in Alexandria, Virginia

Ortiz, who is married, held Berkeley's hand and rubbed her behind as he led the blonde 48-year-old executive out of the venue

A spokesperson for the Army told DailyMail.com that Ortiz's relationship with Berkeley (right) is currently under investigation. She said Ortiz has been reassigned and now serves as an advisor to the marketing department. Berkeley abruptly left McCann in November

Ortiz was director of marketing at the Army since 2013, where he oversaw the agency's marketing plan and supervised the program managers who signed off on McCann's invoices.

Berkeley, who helped lead McCann's Army account, left her job at McCann abruptly in November, shortly after the video was taken.

In an internal email, the company said Berkeley 'made the difficult decision to leave the team to pursue other opportunities.'

Ortiz and McCann declined to comment. McCann did not return DailyMail.com's request for comment.

A spokesperson for the Army told DailyMail.com that Ortiz's relationship with Berkeley is currently under investigation. She said Ortiz has been reassigned and now serves as an advisor to the marketing department.

'When Army Marketing and Research Group (AMRG) leadership became aware of allegations of possible inappropriate conduct between a member of the AMRG staff and a defense contractor in December 2017, the employee was removed from the Director of Marketing position, all duties associated with our advertising contract and contractor, and reassigned within the organization,' said Army spokesperson Alison Bettencourt.

Sources familiar with the Army marketing department provided calendar entries to DailyMail.com indicating that Ortiz continues to meet regularly with Army marketing leadership.

He organized a meeting on February 20 with top officials to discuss the department's marketing strategy and operations for the upcoming fiscal year.

McCann, which has handled the Army's marketing strategy for the past decade and is behind the 'Army Strong' campaign, is currently competing for an extension of its contract worth an estimated $4 billion.

The company's current contract with the Army is set to expire in September.

Contractors often work closely with government officials. However, federal rules prohibit relationships that can give the appearance of a conflict of interest.

Ortiz was director of marketing at the Army since 2013, where he was oversaw the agency's marketing plan and supervised the program managers who signed off on McCann's invoices

Berkeley, who helped lead McCann's Army account, declined to comment on the video

In an internal email, McCann said Berkeley (pictured with her husband) 'made the difficult decision to leave the team to pursue other opportunities'

Federal rules prohibit relationships that can give the appearance of a conflict of interest. Federal employees in general must also avoid working on contracts that could benefit someone who they have an intimate relationship with. Pictured: Ortiz on a boat

For example, Army officials are not allowed to accept food or drinks from McCann employees, according to their contract. Federal employees in general must also avoid working on contracts that could benefit someone who they have an intimate relationship with.

McCann Worldgroup has a written policy against socializing with Army officials. Just a few hours after the October bar incident, McCann senior vice president Steve McGinniss wrote an email to the staff on the Army account highlighting the policy.

'Perceptually, we need to ensure that we are not in a position to have our ethics called into question. Therefore, our team policy continues to be that no member of the agency is permitted to socialize with our clients outside of business,' he wrote.

According to an October 2017 review by the Army Auditing Agency, the Army marketing department spent $930 million between 2013 and 2016 'on marketing efforts that potentially didn't provide best value to support Army recruiting.' The analysis found that only three of the Army's 23 marketing programs had a positive impact in 2016.

The Army marketing department countered that the report conflated recruitment and marketing, and showed a 'lack of marketing understanding or criteria for performance assessment.'

This is not the first time questions have emerged about the relationship between Army officials and McCann.

Army employees and contractors have filed multiple complaints over the past few years claiming that they were threatened or harassed by Army marketing leadership after raising concerns about the McCann contract, according to records reviewed by DailyMail.com.

One complaint, filed with the Department of Defense inspector general by an Army Marketing employee, questioned the appropriateness of a meeting Army officials held with high-level McCann executives to discuss marketing strategy in May 2016.

McCann, which has handled the Army's marketing strategy for the past decade and is behind the 'Army Strong' campaign, is currently competing for an extension of its contract worth an estimated $4 billion. Pictured: A McCann advert for the Army

The meeting, which included McCann CEO Harris Diamond and the Acting Director of the Army Patrick Murphy, was described by insiders as a 'sales pitch' by McCann that included discussions on future marketing strategy.

'The appearance of favoritism to an incumbent vendor without giving the same treatment and consideration to other bidders is at least one major crux of the concern and gives clear possibility that other vendors have grounds for potential protest and remedy,' wrote the employee.

The employee, who has requested anonymity, also said he was fired six weeks after filing a prior complaint with the inspector general about the meeting, and claimed this was retaliation for his initial grievance.

'The current contract structure allows the waste of millions of dollars,' wrote the employee. 'I and others have been targeted and alienated in many ways and I have at least 4 or 5 witnesses to that affect [sic].'

Bettencourt, the Army spokesperson, declined to comment on the complaint and referred questions to the Inspector General. She said the May 2016 meeting was a 'routine business meeting' requested by the Under Secretary of the Army at the time. She said 'a legal review of the meeting, its agenda and prohibited topics due to the re-compete was done and adhered to.'

Multiple complaints have also been filed against Jeff Sterling, the Army contracting officer representative who is responsible for supervising the McCann contract.

Female employees claim Sterling threatened them after they raised concerns about McCann's productivity and costs.

One Army project manager, Crystal Guerrero, wrote in a 2014 complaint to human resources that Sterling repeatedly 'verbally assaulted' her and other women in the office.

Guerrero said Sterling ignored feedback that was negative about McCann and berated her after she told him McCann was inflating its costs compared to other vendors.

One complaint, filed with the Department of Defense by an Army Marketing employee, questioned the appropriateness of a meeting Army officials held with McCann executives to discuss marketing strategy in May 2016. The meeting, which included Acting Director of the Army Patrick Murphy (pictured), was described by insiders as a 'sales pitch'

The May 2016 meeting also included McCann CEO Harris Diamond (pictured). An employee who wrote a complaint about the meeting said: 'The appearance of favoritism to an incumbent vendor without giving the same treatment and consideration to other bidders is at least one major crux of the concern'

'Talking to [Sterling] about anything is near impossible, he doesn't talk, he barks, primarily at women. It makes me feel belittled and threatened because he seems to be an unstable individual, with a very short fuse, capable of anything,' wrote Guerrero in an October 17, 2014 complaint obtained by DailyMail.com.

'My personal feeling is that it is somehow due to the fact that I am a woman that [Sterling] feels he has this authority. Unsure as to the primary motivation but whatever the case, it is belittling, demeaning, and not conducive to a productive and healthy work environment.'

She added that his comments toward her made her feel 'demeaned, degraded and deflated.'

Guerrero, who still works at the Army Marketing department, declined to comment on the complaint and referred questions to the Army's spokesperson. Bettencourt declined to comment.

Another 2017 complaint, filed by a female contractor, claimed that Sterling threatened her outside of an Army marketing event where she had been hired to observe McCann's performance.

Sources told DailyMail.com that the contractor had previously filed reports that were critical of the quality of the marketing events.

'The nature of Mr. Sterling's interaction felt disrespectful, hostile, condescending, rude, and unprofessional. I felt he was using his position to intimidate and verbally assault me,' said the April 24, 2017 complaint.

The contractor's work agreement with the Army marketing department was not renewed after the complaint was filed.

Bettencourt denied that there was a connection between the contract's expiration and the complaint. She said the contract was not renewed because an audit determined that the same services were already being provided for the Army by another company.

Army project manager Crystal Guerrero (right) wrote a complaint against Jeff Sterling, the Army contracting officer representative responsible for supervising the McCann contract, for repeatedly 'verbally assaulted' her and other women in the office in 2014

'The contract referenced was not terminated early. During an audit of the events marketing contracts, the Army Audit Agency determined the services being provided by that contract were duplicative,' said Bettencourt. 'The contracting officer at the MICC made the decision to not renew the contract after the period of performance expired.'

However, documents provided to DailyMail.com show that Army officials had drafted a new agreement to allow McCann to take over the services that were being provided by the other contractor before the audit had even concluded.

This agreement was drafted on May 5, 2017 – less than two weeks after the female contractor filed a complaint against Sterling. Sterling was listed as the authorizer of the agreement. The document itself was drafted by McCann and edited by Army marketing officials, according to metadata.

Bettencourt declined to comment on the harassment complaints against Sterling or confirm if the Inspector General had opened an investigation. She referred questions about the Army criminal investigation to the criminal investigation division.

Sterling has vehemently denied the harassment complaints, as well as the accusations he accepted lunches, kick-backs, duffel bags of cash and sexual favors, according to a sworn statement Sterling wrote in March 2017 and obtained by DailyMail.com.

Sterling did not respond to DailyMail.com's request for comment about the accusations.

Sterling wrote the 'vicious lies' were 'slanderous attacks' on his reputation, pinning the alleged falsehoods on some of his fellow co-workers.

The government official said he informed McCann about these claims because 'they were also implicated in the slanderous activities. The agency was aghast by the rumors'

But Sterling noted the claims had 'not impacted my relationship with the Ad Agency, (Ms Nancy Peters).'

Sterling was photographed with Nancy Peters, the SVP of Program Management at McCann, as the two grabbed lunch at Ted's Grill in Arlington, Virginia in October 2016.

Sterling was photographed with Nancy Peters, the SVP of Program Management at McCann, as the two grabbed lunch at Ted's Grill in Arlington, Virginia in October 2016

In addition to the employee complaints against Sterling, there were accusations he acknowledged and vehemently denied that he has accepted lunches, kick-backs, duffel bags of cash and sexual favors, according to a sworn statement Sterling wrote in March 2017 (pictured)

Sterling wrote the 'vicious lies' were 'slanderous attacks' on his reputation, pinning the alleged falsehoods on some of his fellow co-workers

The Army's policy states employees are not allowed to accept food or drinks from McCann employees. McCann also has a written policy against socializing with Army officials.

An email exchange obtained by DailyMail.com also showed Sterling insisting that McCann get paid to do a project that was deemed unreasonably expensive by the Army.

McCann's estimate for three marketing projects went $220,000 over the Army's budget, according to the exchange, and the Army's contracting officer recommended that they cancel them.

'[I]t simply should not cost this much to perform this work, I don't see any way that we would be able to ''with a straight face'' accept these proposals and make a reward,' wrote Army contracting officer James R. Meeks in an August 29, 2014 email.

Sterling responded that the marketing director was adamant that McCann do the work, and the Army needed to 'accept the price and move out.'

'I don't think [Meeks] can ''accept'' a price deemed not reasonable. That'll never make it through the process,' replied another employee. 'What would be the rationale?'

A third employee remarked 'if someone wants to sign their name to accepting these at these exhorbant [sic] rates, then so be it. I certainly do not want to be associated with these. I think this is a microcosm of what is going on at a much higher level.'

CRYSTAL GUERRERO'S FULL COMPLAINT AGAINST JEFF STERLING

Crystal Guerrero wrote in a 2014 complaint (pictured) that Sterling repeatedly 'verbally assaulted' her and other women in the office. Guerrero said Sterling ignored feedback that was negative about McCann and berated her after she told him McCann was inflating its costs compared to other vendors

THE SECOND COMPLAINT MADE AGAINST JEFF STERLING

Another 2017 complaint (pictured), filed by a female contractor, claimed that Sterling threatened her outside of an Army marketing event where she had been hired to observe McCann's performance

THE ARMY MARKETING AND RESEARCH GROUP'S DRAFT REPORT

Pictured: The October 2017 review by the Army Auditing Agency, it determined the Army's Marketing and Rearch Group couldn't show its marketing investments provided a positive return

The Army marketing department spent $930 million between 2013 and 2016 'on marketing efforts that potentially didn't provide best value to support Army recruiting'