EDINBURGH — The media spotlight is sharply focused on McKinsey, with journalists around the world piecing together its work for authoritarian and corrupt governments. South African investigative journalists lifted the lid on the role of McKinsey in the state capture scandal. The London-based Financial Times picked up on the story, telling its influential readership that South African lawmakers have accused McKinsey of possible criminal wrongdoing in a report that condemns the consultant’s work for the state power monopoly over its links to a political corruption scandal. The global management consultancy acted as a “de facto legitimising vehicle” for Trillian, a company linked to the Gupta business family, to siphon money from Eskom. The New York Times has contextualised McKinsey’s dirty work in South Africa, explaining how McKinsey is extracting juicy fees everywhere via graft-tainted politicians. BizNews summarises the key findings. – Jackie Cameron
By Thulasizwe Sithole
While the United States pulls back from international cooperation and adopts a more nationalist stance, major companies like McKinsey are pursuing business in countries with little regard for human rights — sometimes advancing, rather than curbing, the contentious tactics of America’s biggest rivals, says The New York Times.
“It is more likely they enable these regimes and likely become complicit,” it reports David J. Kramer, a former assistant secretary of state, as saying. “They don’t want to alienate regimes, or they would lose business.”
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The New York Times notes that, at a time when democracies and their basic values are increasingly under attack, the iconic American company has helped raise the stature of authoritarian and corrupt governments across the globe, sometimes in ways that counter American interests.
McKinsey clients have included Saudi Arabia’s absolute monarchy, Turkey under the autocratic leadership of President Recep Tayyip Erdogan, and corruption-plagued governments in countries like South Africa, says the media outlet.
“In Ukraine, McKinsey and Paul Manafort — President Trump’s campaign chairman, later convicted of financial fraud — were paid by the same oligarch to help burnish the image of a disgraced presidential candidate, Viktor F. Yanukovych, recasting him as a reformer.
“Once in office, Mr. Yanukovych rebuffed the West, sided with Russia and fled the country, accused of stealing hundreds of millions of dollars. The events set off years of chaos in Ukraine and an international standoff with the Kremlin.
“Inside Russia itself, McKinsey has worked with Kremlin-linked companies that have been placed under sanctions by Western governments — companies that the firm helped build up over the years and, in some cases, continues to advise.
“It has consulted in many sectors of the Russian economy, including mining, manufacturing, oil and gas, banking, transportation and agriculture. A McKinsey official sat on the Russian government’s energy board. Former McKinsey consultants have gone to work in the Russian companies they once advised.”
In August, continues The New York Times, VEB Bank — which is wholly owned by the Russian state, intertwined with Russian intelligence and under United States sanctions — hired McKinsey to develop its business strategy.
“There is no indication that McKinsey has violated American sanctions, which prohibit only certain transactions with targeted companies and individuals. But the larger question is whether the company, in pursuing legitimate business opportunities abroad, is helping to shore up President Vladimir V. Putin’s autocratic leadership.
“Other consulting companies serve similar clients, but none have the stature to confer credibility quite like McKinsey, a confidant for 92 years to many of the world’s most admired companies.”
In China, it has advised at least 22 of the 100 biggest state-owned companies — the ones carrying out some of the government’s most strategic and divisive initiatives, according to a review of Chinese-language material by The Times.
“While it is not unusual for American corporations to work with China’s state-owned companies, McKinsey’s role has sometimes put it in the middle of deeply troubled deals. In Malaysia, the company laid out the case for one of Asia’s most corrupt leaders to pursue billions of dollars from China at a time when he was suspected of funnelling vast sums of public money into his own pocket, drawing tens of thousands into the streets to protest against him.
“Other consulting companies serve similar clients, but none have the stature to confer credibility quite like McKinsey, a confidant for 92 years to many of the world’s most admired companies,” it adds.
For more on McKinsey, see: Revealed: McKinsey strangles democracies as it nurtures nasty leaders
