United States – Some members of America’s Congress have requested probe investigations of McKinsey &Company from the Department of Justice and the Department of Defence (DoD), claiming that there is a possible conflict of interest due to McKinsey & Company’s deep dealings with the Chinese government which was undisclosed, as reported by Reuters.
Allegations of Undisclosed Work with China
On October 17, in letters to the Times but released on Friday, Congressman John Moolenaar, Senator Marco Rubio, and Senator Joni Ernst wrote that the DoD should determine if McKinsey is eligible to engage with it. The lawmakers referenced the US federal rules that actually compel McKinsey to provide information on the actual or potential conflicts of interest capable of prejudicing McKinsey’s work in the United States.
“Our review of available Department of Defense documentation revealed that, in many instances, McKinsey repeatedly failed to disclose its work with the (People’s Republic of China) government when acquiring DoD contracts,” the letters said.
“McKinsey’s activities pose a serious risk to U.S. national security and may have failed to meet McKinsey’s obligations under federal law.”
The DoJ and DoD declined to comment on this story.
National Security Risks and Federal Law Compliance
It said McKinsey had received more than 470 million dollars for various contracts with the DoD since 2008, work that it said involved military sensitivity such as the F-35 fighter jet program, a study of the efficiency of the U.S. Navy’s shipyards, and the DoD’s quest for the latest microchips.
At the same time, the letter said McKinsey also helped Chinese government departments, including the National Development and Reform Commission, the country’s central economic planner, in formulating the Chinese five-year plans, which is the blueprint the Beijing government develops every five years to chart its economic development strategies.
Involvement with Chinese Government Agencies
Other Chinese government agencies that weren’t mentioned but which McKinsey worked with are The State-owned Assets Supervision and Administration Commission of the State Council (SASAC), China COSCO Shipping Corporation Limited, and China Communications Construction Company Ltd, the letter stated, as reported by Reuters.
The lawmakers claimed that McKinsey has sought to shy away from the advisory work conducted on China’s five-year plans, including the 13th five-year plan, by stating that that work was conducted by McKinsey Global Institute, the Urban China Initiative.