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McKinsey cooperates with ‘Chinese government’ despite commitments to US senator, document shows – Community News

Management consulting firm McKinsey & Co. admitted a commercial relationship with the “Chinese government,” according to a court document, though the company told a US senator it had no business ties to the Beijing regime.

According to Sen. Marco Rubio, R.-Fla., McKinsey told lawmakers in July 2020 that it does not work with the Chinese government or the ruling Communist Party of China. Business leaders reiterated that statement during a Zoom conference call in March of this year with advisers to Senator Rubio, the senator said.

But in a bankruptcy case involving offshore drilling company Valaris, where McKinsey applied to be an adviser, the consulting firm disclosed commercial ties to the “Chinese government,” according to a document filed by the company. court in September 2020.

Rubio asked the company to share more information about his work in China and explain how it avoids conflicts of interest between its consulting activities for the US government and Chinese clients close to the government. Beijing.

In a letter Thursday to McKinsey obtained by NBC News, the senator expressed outrage at the episode and accused the company of misleading him about its operations in China.

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“I realized that McKinsey & Company had apparently lied to me and my staff on multiple occasions about McKinsey’s ties to the Chinese Communist Party (CCP) and the Chinese government,” Rubio wrote.

Rubio said McKinsey’s work with the Chinese government and with state-owned companies, combined with his advice to US federal agencies, poses a “serious institutional conflict of interest”.

“It is increasingly clear that McKinsey & Company cannot be trusted to continue working on behalf of the United States government, including our intelligence community.”

A McKinsey spokesperson said the company does not work for the central government of China, but only works for provincial and local governments in China, and the company has made that clear in prior correspondence with the office. by Rubio.

“We are consistent and transparent in all of our communications with Senator Rubio’s office,” a spokesperson told NBC News. In a letter to Rubio in July 2020, McKinsey said a small part of his work in China involves local and provincial governments related to economic zones, urban planning and real estate , the spokesman said.

The bankruptcy disclosure “reflects an accurate description of customer service, including local and state government, and is fully relevant to the type of work we have done,” the spokesperson said. in public with the senator’s office”. “It does not mean working for the Central Government, the Communist Party of China or the Central Military Commission of China, none of which are McKinsey clients and, to our knowledge, have never been. McKinsey products.”

The bankruptcy disclosure cited “Chinese government” and did not specify whether the client was a provincial or central government.

Analysts say that Chinese state-owned companies like the one McKinsey worked for have put Chinese Communist Party officials at the top.

A McKinsey spokesman told NBC News last month that company policy prohibits cooperation with political parties.

A McKinsey spokesperson said: “We do not serve political parties anywhere in the world.

According to Rubio, in a letter dated July 3, 2020 in response to his request, Liz Hilton Segel, managing partner of McKinsey’s North American operations, wrote that “to our knowledge, [neither the Chinese Comunist Party nor the Chinese government] was a McKinsey customer. ”

During a call with Zoom on March 17, 2021, “members of McKinsey’s global leadership team once again told my employees that they did not know the CCP or the Chinese government was a customer” , wrote Rubio.

“As you know, all transactions with the Chinese government are necessarily transactions with the CCP,” Rubio wrote.

NBC News previously reported that McKinsey provided sensitive advice to the Pentagon and US intelligence agencies, and worked for powerful state-owned companies in China that aided the military buildup. Beijing team. The company’s operations in China have been increasingly criticized by lawmakers, who say it poses a potential conflict of interest that could jeopardize US national security.

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McKinsey’s consulting contracts with the federal government give it an insider look at America’s high-tech weapons, intelligence and military planning programs. But the company also advises Chinese state-owned companies that have supported Beijing’s naval build-up in the Pacific and played a key role in China’s efforts to expand its influence around the world. according to lawmakers, experts and federal officials.

McKinsey said it complies with US federal contract law and has extensive internal rules in place to prevent conflicts of interest and protect customer information.

Critics like Rubio say the company, the world’s largest consulting firm, should disclose more details about its operations in China, particularly amid Washington’s concerns about industrial espionage, arms production and intellectual property theft in Beijing.

In a letter to McKinsey in November 2020, Rubio said he was concerned that the company was “supporting or inadvertently – the Chinese Communist Party’s effort to overthrow the United States.”

In a similar bankruptcy involving Valaris, McKinsey also disclosed its relationship with Shenzhen Dajiang Baiwang Technology Co, a drone manufacturing facility owned by the machine maker. China’s DJI drones.

On Thursday, the US Treasury Department said it would add DJI along with seven other Chinese companies to a blacklist for investments related to a “Chinese military-industrial complex”.

The Treasury Department said DJI had “supplied drones to the Xinjiang Public Security Bureau, which are used to monitor the Uighurs in Xinjiang.”

In addition to its consulting firm in China, McKinsey has faced stiff criticism from lawmakers and has faced legal challenges over alleged conflicts of interest in other areas. .

This year, without admitting wrongdoing, the company agreed to pay $573 million to settle allegations by 49 states that its work for opioid manufacturers helped “accelerate” sales. selling drugs, contributing to a deadly epidemic of addiction. At the same time the company works for drug companies, McKinsey is advising the Food and Drug Administration on their prescription policies, according to court documents.

Last month, a billion-dollar private equity fund linked to McKinsey & Co. resolved regulatory allegations that it did not have appropriate policies in place to prevent the misuse of inside information obtained from its extensive corporate advisory business, according to Securities and Co. . exchange committee.

While the SEC does not claim that the fund actually misused confidential information, it cites the dual role of McKinsey partners overseeing the giant fund’s investment choices, even if they have access to into non-public customer information.

The McKinsey hedge fund, known as MIO Partners, agreed to pay $18 million to settle the matter, without admitting or denying the allegations. In reaching the settlement, the MIO said in a statement, “The historical issues identified in the SEC order were resolved by the MIO through enhanced policies and procedures and the order did not identify any any misuse of confidential or material non-public information by the MIO or McKinsey.”

https://community99.com/mckinsey-partnered-with-chinese-government-despite-pledges-to-us-senator-document-shows/ McKinsey cooperates with ‘Chinese government’ despite commitments to US senator, document shows – Community News

Huynh Nguyen

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