Is there a more repugnant global consulting firm than McKinsey? The big four audit firms have long been implicated in major scandals and the facilitation of tax avoidance and evasion. McKinsey’s rivals, Boston Consulting and Accenture, has had its own controversies, but McKinsey currently stands atop the pile of corruption.
Earlier this month, McKinsey agreed to pay US$122 million after the US Department of Justice prosecuted it for bribes to government officials in South Africa between 2012 and 2016, for which one senior partner pleaded guilty. According to the DOJ:
McKinsey Africa, acting through a senior partner and for the benefit of McKinsey, agreed to pay bribes to then-officials at Transnet SOC Ltd. (Transnet), South Africa’s state-owned and state-controlled custodian of ports, rails and pipelines, and at Eskom Holdings SOC Ltd. (Eskom), South Africa’s state-owned and state-controlled energy company.
Between at least 2012 and 2016, McKinsey Africa obtained sensitive confidential and non-public information from Transnet and Eskom regarding the award of lucrative consulting contracts and submitted proposals for multimillion-dollar consulting engagements, while knowing that South African consulting firms with which McKinsey Africa had partnered would pay a portion of their fees as bribes to officials at Transnet and Eskom. As a result of the bribery scheme, McKinsey and McKinsey Africa earned profits of approximately $85,000,000.
The firm has also been charged in South Africa in relation to its role in what was essentially a corruption free-for-all during the disastrous presidency of Jacob Zuma.
Further, last week McKinsey agreed to pay US$650 million in fines to end its long-running prosecution by the DOJ in relation to its role in the opioid crisis and its work for Purdue Pharma.
“McKinsey schemed with Purdue Pharma to ‘turbocharge’ OxyContin sales during a raging opioid epidemic — an epidemic that continues to decimate families and communities across the nation,” the DOJ said. While it was working to maximise opioid consumption, McKinsey was also working with the Food and Drug Administration on the regulation of opioids, without telling the regulator of its conflict of interest.
Between 2011-21, the death toll from the US opioid epidemic was more than 400,000 people — for unintentional deaths alone — along with an estimated 10,000 suicides. Purdue was the third-largest seller and thus third-largest contributor to these deaths — helped by McKinsey.
Yet inexplicably, this poster child for everything that is rotten, morally and intellectually bankrupt, and discredited about consulting, is still persona grata in the corridors of power and in the media.
This calendar year, McKinsey has, according to AusTender, been awarded $17.4 million in contracts by the federal government. In 2023 it received $14.3 million. Since 2015, McKinsey has received more than a quarter of a billion dollars from taxpayers.
And the biggest funder of McKinsey in Australia? Ironically, it’s the Department of Health, which has handed the company $68 million in contracts since 2015, even as McKinsey enabled the US opioid epidemic, to maximise the profits of Purdue and its own revenue from that company.
If you were a reader of The Australian Financial Review, you’d be across the crimes of McKinsey. It carried accounts of both the opioid and South African settlements. Yet curiously the paper’s editors persist in holding McKinsey in high regard. Just as details of McKinsey’s South African settlement were emerging, the AFR’s neoliberal economic correspondents, John Kehoe and Michael Read, trumpeted a McKinsey report that purported to show Australia was in an economic “national emergency” — according to McKinsey, this was because there’s too much spending in the, erm, health and caring sector (though not on consultants, obviously).
The AFR editorial in turn endorsed the report as having “laid bare Australia’s great stagnation“. Kehoe and Read then repeated their coverage of the report again and again‚ apparently uninterested in McKinsey’s record of misconduct.
“Australia is now an economic ‘problem child’: McKinsey” was the headline for the “national emergency” report mentioned above. The plundering of South Africa, and tens of thousands of dead Americans, suggest it’s not Australia that’s the problem, chaps.
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