McKinsey & Company: Scandals

Controversial clients and association with authoritarian regimes[edit]

Role in U.S. Immigration and Customs Enforcement (ICE)[edit]

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. A managing partner said the contract, not widely known within the company until The New York Times reported it, had “rightly raised” concerns.[103]

Role in Saudi clampdown on dissidents[edit]

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 was arrested. Another dissident’s family members were arrested, and the cell phone of the dissident was 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.”[104] 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.”[105]

On the 12th of February 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 namely McKinsey & Company.[106]

Support of authoritarian regimes[edit]

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 campswhere thousands of Uyghurs were being detained without cause.[107][108] In the preceding few years, McKinsey’s clients included Saudi Arabia‘s absolute monarchy,[109][110][111] Turkey’s autocratic leader Recep Tayyip Erdogan, ousted former President of Ukraine Viktor Yanukovych, and several Chinese and Russian companies under sanctions.[108]

 

.. 2008 financial crisis[edit]

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’.[165] Furthermore, McKinsey advised Allstate Insurance to purposefully 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.”[166] 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.[167]

How McKinsey Became One Of The Most Powerful Companies In The World

When the most powerful executives in the world have a problem they just can’t crack, many of them turn to McKinsey – a prestigious and secretive consulting firm that has been influencing business and government decisions for decades. But now, as consumers require more transparency, the company has been thrust into the spotlight.

 

 

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influential in Western Europe they have
been for half a century
whether that’s England or Germany or
elsewhere but also some recent New York
Times reporting has shown that they are
very involved with China a lot of
state-owned enterprises Saudi Arabia
South Africa is a great example there
the company was ensnared in a government
corruption scandal McKinsey repaid about
seventy four million dollars in fees and
while not admitting legal wrongdoing has
apologised for its involvement global
managing partner Kevin Schneider told
CNBC Africa I think we’ve learned many
lessons from the saga not the least of
which is when you make a mistake it’s
best to say sorry quickly and clearly
and then take steps to ensure you don’t
repeat the errors and so the second