You really need to check your sources.....These are some of the biggest bastards in business and you use them? Corporate Propaganda specialist..... This and PIIE that you've posted from for your confirmation bias among others) are the think tanks that dems used for decision making?,,,,, well, more like 'use this to justify the greed you are enabling'......Misinformation...Corporate Propaganda and pure scum
Just look at this,,,some source, sheesh,,,,, Fn Amazing ,.........................
Controversies
[color=red]The firm has been associated with a number of notable scandals, including the collapse of Enron in 2001,[95] the 2007–2008 financial crisis,[95] and facilitating state capture in South Africa.[151] It has also drawn controversy for involvement with Purdue Pharma,[152] U.S. Immigration and Customs Enforcement,[100] and authoritarian regimes.[/color]
Enron
Main article: Enron scandal Enron was the creation of Jeff Skilling, a McKinsey consultant of 21 years, who was jailed after Enron reportedly used McKinsey on 20 different projects,[96] and McKinsey consultants had "used Enron as their sandbox."[96]
Prior to the Enron scandal, McKinsey helped it shift from an oil and gas production company into an electric commodities trader, which led to significant growth in profits and revenues.[79] According to The Independent, there was "no suggestion that McKinsey was complicit in the subsequent scandal, [but] critics say the arrogance of Enron's leaders is emblematic of the McKinsey culture."[153] The government did not investigate McKinsey, who said they did not provide advice on Enron's accounting.[60] The Wall Street Journal questioned McKinsey's "liability" and its "close relationship with Enron",[154] and a 2002 BusinessWeek article suggested that they had ignored warning signs.[39]
In his July 2002 in-depth BusinessWeek article on the aftermath of the Enron scandal, John Bryne wrote that McKinsey had been a "key architect of the strategic thinking that made Enron a Wall Street darling. In books, articles, and essays, its partners regularly stamped their imprimatur on many of Enron's strategies and practices, helping to position the energy giant as a corporate innovator worthy of emulation. The firm may not be the subject of any investigations, but its close involvement with Enron raises the question of whether McKinsey, like some other professional firms, ignored warning flags in order to keep an important account."[39] BusinessWeek described how McKinsey's culture had changed, as the "number of partners grew from 427 to 891" making it a "less personal place".[39] According to the article, "some current and former McKinsey consultants" said that McKinsey had lost their "ingrained values" that used to guide the firm. Citing the example of the dot-com bubble, McKinsey had begun to have "less prestigious companies" as clients and had allowed "its focus on building agenda-shaping relationships with top management at leading companies to slip."[39] As well, "there was a noticeable tilt toward bringing in revenue at the expense of developing knowledge."[39] McKinsey denied this.[39]
McKinsey denied giving Enron advice on financing issues or having suspicions that Enron was using improper accounting methods.[96]
2008 financial crisis
Main article: Financial crisis of 2007–2008 McKinsey is said to have played a significant role in the 2008 financial crisis by promoting the securitization of mortgage assets and encouraged the banks to fund their balance sheets with debt, driving up risk, which "poisoned the global financial system and precipitated the 2008 credit meltdown".[95] Furthermore, McKinsey advised Allstate Insurance to purposely give low offers to claimants. The Huffington Post revealed that the strategy was to make claims "so expensive and so time-consuming that lawyers would start refusing to help clients."[155] Next to this, 2016 McKinsey partner Navdeep Arora was convicted for illegally depleting State Farm of over $500,000 over a period of 8 years, in collaboration with a State Farm employee.[156]
Valeant, a Canadian pharmaceutical company investigated by the SEC in 2015, has been accused of improper accounting, and that it used predatory price hikes to boost growth.[157] The Financial Times states that "Valeant's downfall is not exactly McKinsey's fault but its fingerprints are everywhere."[97] Three out of six senior executives were recent ex-McKinsey employees, as well as the chair of the 'talent and compensation' committee.[97] MIO Partners was a private investor of Valeant and McKinsey consulted Valeant on drug prices and acquisitions.[158]
Role in opioid epidemic
McKinsey advised opioid makers on how to "turbocharge" sales of OxyContin, proposed strategies to counter the emotional messages from mothers with teenagers who overdosed on OxyContin, and helped opioid makers circumvent regulation.[101] The firm also advised Purdue Pharma to offer pharmacies rebates based on the number of overdoses and addictions they caused.[152] In 2019, McKinsey projected that over 2,400 CVS customers would have an overdose or become reliant on opioids.[159] McKinsey estimated that a rebate of $14,810 per "event" would mean that Purdue would have to pay CVS $36.8 million that year.[160] In February 2021, McKinsey reached agreements with attorneys general in 49 states, five U.S. territories, and the District of Columbia. Across the settlements, the firm agreed to pay nearly $600 million to settle investigations into its role in promoting sales of OxyContin.[161] McKinsey has since apologized for its advice to opioid makers.[162]
Records show that McKinsey worked for Purdue Pharma and other opioid makers in a 15 year period, from 2004 to 2019.[163] During 2018 and 2019, McKinsey collected at least $400 million consulting pharmaceutical companies. McKinsey advised Mallinckrodt, the largest manufacturer of generic opioids, as well as Endo for which McKinsey consulted on marketing Opana.[164] McKinsey's consultation grew Endo into a leading generics manufacturer. McKinsey recommended targeted and influenced doctors who treat back pain in elderly and long-term care patients.[165]
In February 2021, McKinsey paid $600 million to settle investigations into its role in promoting sales of OxyContin and fueling the greater opioid epidemic.[161]
In April 2022, the New York Times reported that McKinsey had frequently allowed partners and other consultants to work for both government clients, such as the FDA, and pharmaceutical clients, such as Purdue.[166] These actions violated McKinsey's own internal ethical guidelines.[166]
Records show that McKinsey worked for Purdue Pharma and other opioid makers in a 15 year period, from 2004 to 2019.[163] During 2018 and 2019, McKinsey collected at least $400 million consulting pharmaceutical companies. McKinsey advised Mallinckrodt, the largest manufacturer of generic opioids, as well as Endo for which McKinsey consulted on marketing Opana.[164] McKinsey's consultation grew Endo into a leading generics manufacturer. McKinsey recommended targeted and influenced doctors who treat back pain in elderly and long-term care patients.[165]
In February 2021, McKinsey paid $600 million to settle investigations into its role in promoting sales of OxyContin and fueling the greater opioid epidemic.[161]
In April 2022, the New York Times reported that McKinsey had frequently allowed partners and other consultants to work for both government clients, such as the FDA, and pharmaceutical clients, such as Purdue.[166] These actions violated McKinsey's own internal ethical guidelines.[166]
Rikers Island jail complex
New York City paid McKinsey $27.5 million between 2014 and 2017 to reduce prison assaults in Rikers Island; but the violence grew and the city abandoned many of the firm's recommendations.
The consultancy's alleged failings included not soliciting the views of inmates or clinic staff; using an encrypted messaging app that deletes messages, allegedly to avoid transparency; initiatives involving the expanded use of Tasers, shotguns and K9 patrol dogs; replacing troublesome inmates with more accommodating ones in the test area, which skewed the data in favor of the project; the use of ineffective data-analytics software; and spreadsheet errors that inflated the baseline rate of violence, against which the project was measured.[167]
McKinsey advised New York City's Rikers Island jail complex and tested an anti-violence strategy named "Restart" which occurred in Rikers housing units.[168] The results of the strategy reported that violent crimes dropped more than 70% inside the Rikers housing units.[169] Later, it was found that McKinsey consultants and jail officials rigged the program by grouping compliant inmates into the housing units.[170]
Fine for insider trading by investment affiliate
In 2019, McKinsey paid the Justice Department $15 million to settle allegations relating to failure to disclose potential conflict in three bankruptcy cases that the firm advised.[171] In 2021, MIO Partners, an affiliate of McKinsey & Co. that invests almost $31 billion of money on behalf of its employees, was fined US$18 million by the US regulator, SEC. The SEC said some of the same people making investment decisions for MIO Partners were McKinsey & Co. employees who had visibility into confidential information for companies for which McKinsey was consulting.[172] The SEC claimed that MIO Partners had advanced knowledge of upcoming mergers, bankruptcy, and financial results announcements for companies that the firm was consulting.[173]
Accusations of conflicts of interest in US bankruptcies
In January 2022, the Second U.S. Circuit Court of Appeals in Manhattan revived a lawsuit against McKinsey & Co. filed by retired turnaround specialist Jay Alix, accusing the consulting firm of concealing potential conflicts when seeking permission from bankruptcy courts to perform lucrative work on corporate restructurings.[174]
GreenSky Insider Trading
An ex-partner at McKinsey was sentenced to 24 months in prison for insider trading.[175] The ex-partner helped advise Goldman Sachs Group on the recent purchase of fintech company GreenSky Inc.[176] The ex-partner bought 2,500 GreenSky call options before the $2.24 billion merger and sold the call options shortly after the merger was announced on September 15, 2021.[177] The ex-partner was ordered to hand over approximately $450,000 of illegal profit.[178]
Controversial clients and association with authoritarian regimes
Role in U.S. Immigration and Customs Enforcement (ICE)
McKinsey stopped working for U.S. Immigration and Customs Enforcement (ICE) after it was disclosed that the firm had done more than $20 million in consulting work for the agency. McKinsey managing partner Kevin Sneader said the contract, not widely known within the company until The New York Times reported it, had "rightly raised" concerns.[179] In 2019, The New York Times and ProPublica reported on newly uncovered documents which showed that McKinsey, as part of its work with ICE, proposed cuts in spending on food and medical care for migrants.[100] McKinsey also advocated for an acceleration of the deportation process, causing concerns among ICE staff that the due process rights of the migrants would be violated.[100] Previously, McKinsey managing partner, Kevin Sneader, had claimed that McKinsey had done no work for ICE in terms of developing and implementing immigration policy; the uncovered documents showed that to be false.[100][180]
Role in Saudi clampdown on dissidents
In October 2018, in the wake of the assassination of Jamal Khashoggi, a Saudi dissident and journalist, The New York Times reported that McKinsey had identified the most prominent Saudi dissidents on Twitter and that the Saudi government subsequently repressed the dissidents and their families. One of the dissidents, Khalid al-Alkami, was arrested. Another dissident identified by McKinsey; Omar Abdulaziz in Canada, had two brothers imprisoned by the Saudi authorities, and his cell phone hacked. McKinsey issued a statement, saying "We are horrified by the possibility, however remote, that [the report] could have been misused. We have seen no evidence to suggest that it was misused, but we are urgently investigating how and with whom the document was shared."[98] In December 2018, The New York Times reported that "the kingdom is a such a vital client for the firm—the source of nearly 600 projects from 2011 to 2016 alone—that McKinsey chose to participate in a major Saudi investment conference in October 2018 even after the killing and dismemberment of a Washington Post columnist by Saudi agents."[99]
On February 12, 2019, the European Parliament Greens/EFA group presented a motion for a resolution on the situation on women's rights defenders in Saudi Arabia denouncing the involvement of foreign public relations companies in representing Saudi Arabia and handling its public image, particularly McKinsey & Company.[181]
dismemberment of a Washington Post columnist by Saudi agents."[99]
On February 12, 2019, the European Parliament Greens/EFA group presented a motion for a resolution on the situation on women's rights defenders in Saudi Arabia denouncing the involvement of foreign public relations companies in representing Saudi Arabia and handling its public image, particularly McKinsey & Company.[181]
Support of authoritarian regimes
McKinsey's business and policy support for authoritarian regimes came under scrutiny in December 2018, in the wake of a lavish company retreat in China held adjacent to Chinese government internment camps where thousands of Uyghurs were being detained without cause.[99][182] In December 2021, NBC News reported McKinsey's connection to a manufacturing facility owned by DJI, a drone maker sanctioned by the United States Department of the Treasury for alleged complicity in aiding the Uyghur genocide.[183] In the preceding few years, McKinsey's clients included Saudi Arabia's absolute monarchy,[98][184][185] Turkey's autocratic leader Recep Tayyip Erdogan, ousted former president of Ukraine Viktor Yanukovych, and several Chinese and Russian companies under sanctions.[99]
Work with Russian arms manufacturers
McKinsey is reported to have provided consulting services for the Russian state-owned enterprise Rostoc, which is responsible for manufacturing missile engines used during Russia's war on Ukraine.[186] According to January 2023 reporting from Die Zeit, McKinsey consultants would provide consulting services to Gazprom and Rostoc while in Germany on behalf of the German Federal Ministry of Defence.[187][188]According to US Senator Maggie Hassan McKinsey has displayed a “pattern of behavior” that raised “grave concerns about conflicts of interest.”[186] McKinsey has also done work for Sberbank, VTB bank, Gazprom, and Rosneft, which are all closely tied to the Kremlin.[186]
Government corruption scandals
South African corruption scandal
The Gupta family (no relation to Rajat Gupta) had strategically placed corrupted individuals in various South African government, utilities and infrastructure sectors. It is alleged that McKinsey was complicit in this corruption by using the Guptas to obtain consulting contracts from certain state-owned enterprises, including Eskom and Transnet.[189] Working with Trillian Capital Partners (a consultancy which was owned by a Gupta associate),[190] they provided services to the value of R1 billion ($75 million) annually. Trillian was paid a commission for facilitating the business for McKinsey.[191] McKinsey hired law firm Norton Rose Fulbright to carry out an internal investigation over the allegations. McKinsey's then Managing Partner, Dominic Barton, issued a statement following an internal investigation, in which the firm "admitted that it found violations of its professional standards but denied any acts of bribery, corruption, and payments to Trillian."[192]
Corruption Watch, a South African non-governmental organization, filed a complaint about the controversial contract to the US Department of Justice, alleging that there was a criminal conspiracy between McKinsey, Trillian and Eskom in contravention of US and South African law.[193] It was revealed in January 2018 that criminal complaints were filed against McKinsey & Company by the South African Companies and Intellectual Property Commission. South African prosecutors confirmed that they would enforce the seizing of assets from McKinsey.[194]
South Africa's National Prosecuting Authority concluded in early 2018 that the payments to McKinsey and its local business partner, Trillian, were illegal, involving crimes such as fraud, theft, corruption and money laundering. McKinsey had subsequently been in discussion with Eskom and the National Prosecuting Authority's Asset Forfeiture Unit to agree on a transparent, legally appropriate process for returning the R1-billion (US$74m) it had been paid – it was confirmed on 6 July 2018 that this had been concluded.[195] Eskom confirmed it received R99.5 million in interest from McKinsey on July 23, 2018. The interest payment covers the two years since McKinsey was paid almost R1-billion in 2016.[196]
Information relating to allegedly corrupt practices by McKinsey at Transnet in 2011 and 2012 came to light in late July 2018. The weekly Mail & Guardian newspaper reported that a "...new forensic treasury report shows how controversial former Transnet and Eskom chief financial officer Anoj Singh enjoyed overseas trips at the expense of international consulting firm McKinsey, which scored multi-billion rand contracts at the state owned entities." The "...report reiterates treasury's recommendations that Singh's conduct with regards to McKinsey should be referred to the elite crime-fighting unit, the Hawks, for investigations under the Prevention and Combating of Corrupt Activities Act (Precca). Under Precca, Singh would be investigated for allegations of corruption as payment for the overseas trips alone would constitute a form of gratification, which is illegal."[197] The Sunday City Press reported that the forensic report in turn reported that "multinational advisory firm McKinsey paid for Singh to go on lavish international trips to Dubai, Russia, Germany and the UK, after which their contract with Transnet was massively extended."[198] McKinsey issued a statement that the allegations were incorrect. McKinsey stated that "based on an extensive review encompassing interviews, email records and expense documents, our understanding is that McKinsey did not pay for Mr. Singh's airfare and hotel lodgings in connection with the CFO Forum and the meetings that took place around the CFO Forum in London and elsewhere in 2012 and 2013."[199] On 11 October 2019, the United States Treasury department announced that it had imposed wide-ranging financial sanctions on three Gupta brothers, Ajay, Atul and Rajesh (aka Tony) and their business associate Salim Essa under the United States Magnitsky Act.[200]
The Economist reported in November 2019, that McKinsey's scandals, such as the 2016 South Africa scandal and the allegations of conflict of interest tied to its $12.7bn investment affiliate, McKinsey Investment Office (MIO), are relatively recent in terms of its long history.[201] The article said that McKinsey's legal challenges facing McKinsey's new global managing partner, Kevin Sneader, may be related to the company's fast-paced growth with an increase of 2,200 partners compared to 2009. During that same time period, the number of employees increased to 30,000 worldwide from 17,000.[201]
In 2020 McKinsey representatives giving testimony to the Zondo Commission of Inquiry into State Capture placed blame for the firm's involvement in the corruption scandal on former McKinsey partner, Vikas Sagar.[202] During 2021 McKinsey & Co. agreed to repay R 870 million (US$63 million) in fees to South African state logistics company Transnet SOC Ltd., seeking to distance itself from contracts linked to corruption allegations.[203] In April 2022 the Zondo Commission recommended that key Eskom executives be criminally investigated for improperly awarding consulting contracts to McKinsey & Company.[204]
South Africa's National Prosecuting Authority announced on Friday, 30 September 2022 that it had criminally charged both McKinsey South Africa and former McKinsey partner, Vikas Sagar, with fraud, corruption and theft related to a contract to advise Transnet on buying new locomotives.[205]
both McKinsey South Africa and former McKinsey partner, Vikas Sagar, with fraud, corruption and theft related to a contract to advise Transnet on buying new locomotives.[205]
French presidential corruption scandal
In December 2022, it was reported that the French National Financial Prosecutors' Office had raided the headquarters of President Emmanuel Macron's Renaissance party and McKinsey's Paris office.[206] The raids were related to probes into false election campaign accounting, as well as possible favouritism and conspiracy.[207] The probe had been widened in October 2022 from an initial focus on McKinsey's taxes to include alleged underreporting of campaign consulting costs and allegations of favoritism.[208][209] McKinsey consultants are alleged to have worked as unpaid volunteer's on Macron's 2017 and 2022 election campaigns, in violation of French law.[208] The firm is subsequently alleged to have benefitted from special access and favorable government treatment, including the awarding of lucrative government contracts.[207] The French media has dubbed the scandal 'McKinsey Affair'[210] or 'McKinseygate'.[207] McKinsey is facing possible charges for corruption and tax fraud as a result of the investigation.[211]
Canadian government consulting scandal
A January 2023 investigative report by Radio-Canada revealed that Justin Trudeau's government had spent at least $117.4 million on McKinsey consulting since coming to power, compared to $2.2 million spent by the prior government.[212][213][214][215][216] All of those contracts were sole-source, according to documents obtained by Radio-Canada.[214] Further investigative reporting identified at least $84 million in McKinsey consulting expenses between March 2021 and November 2022 alone.[217][218]
According to anonymous sources with major roles at Immigration, Refugees and Citizenship Canada (IRCC), McKinsey is reported to have a particularly large and growing influence over Canadian immigration policy.[214][215] Policy is reported to have been decided on without input from public servants, and with minimal consideration for the public interest.[215] Canada's immigration targets have closely followed goals set in a plan by previous McKinsey head Dominic Barton, who outlined these plans in his 2016 report of the Advisory Council on Economic Growth and through his work with the Century Initiative.[214] Both the report and the Century Initiative advocate for a steep increase in immigration to bring Canada's population to 100 million by 2100.[215] According to one of the IRCC whistleblowers, the department was informed that Barton's report was a "foundational plan" in spite of reservations expressed by the then-immigration minister, John McCallum.[214]
On January 10, 2023, Canadian opposition parties, including the Conservative Party of Canada, the New Democratic Party of Canada, and Bloc Quebecois, called for a parliamentary inquiry into federal contracts awarded to McKinsey.[218][219][220][221] The opposition is demanding that the government disclose "contracts, conversations, records of work done, meetings held, text messages, email exchanges, everything that the government has with the company since taking office"[222] McKinsey has thus far refused to answer Radio-Canada questions regarding its role and agreements with the federal government, while the government has refused to provide copies of the company's reports.[215] In response to the controversy, McKinsey issued a statement on its website indicating that it “welcomes the opportunity” to provide information to parliament, and that it "does not make policy recommendations on immigration or any other topic".[220]
Trudeau asked Treasury Board President Mona Fortier and Procurement Minister Helena Jaczek to review the contracts return a final report. On 23 March 2023, the Treasury Board announced that audits had determined that departments did not consistently follow certain administrative rules and procedures, but that there was "broad compliance with values and ethics commitments."[213] According to the Treasury Board, while the audits raised questions about fairness, transparency and conflicts of interest, no evidence was found of political direction in awarding the contracts.[212]
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