Republicans call for McKinsey contract ban after China advisory work

27 February 2024 Consulting.us 2 min. read
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Senior Republican lawmakers have called for McKinsey & Company’s ban from federal contracts after a Financial Times report uncovered a think tank led by the consultancy gave policy recommendations to the Chinese central government.

The Financial Times on Thursday reported that China’s central planning agency in 2015 commissioned a McKinsey-headed think tank, the Urban China Collective (UCI), to produce research for its 2016-2020 five-year plan.

The UCI delivered a 310-page book that advised deepening cooperation between the Chinese military and business and pushing foreign companies out of sensitive industries, among other recommendations.

An introduction written by Lola Woetzel, UCI founder and co-chair and a McKinsey senior partner in China, stated the book drew on work by McKinsey’s in-house research arm.

Republicans call for McKinsey contract ban after China advisory work

“It’s shocking that a US company allegedly supported the Chinese Communist party’s efforts to develop policies and plans that violate international trade rules and threaten American national security and economic interests,” Michael McCaul, chair of the House foreign affairs committee, told the Financial Times on Friday. “Companies supporting our adversaries’ military or human rights abuses shouldn’t receive contracts paid for with the taxpayer money of hardworking Americans.”

Marco Rubio, vice-chair of the Senate intelligence committee, told FT, “at this point it is impossible to justify any McKinsey contracts with the US government.”

Mike Gallagher, the Republican chair of the House China committee, added, “One is left to conclude that McKinsey’s true mission is to make money, even if that money comes from genocidal communists. Companies like McKinsey that help the CCP in its quest to destroy individual dignity and American global leadership should be prohibited from receiving taxpayer dollars.”

A spokesperson for the Democratic staff of the House China committee said the report was “deeply concerning” and they were “committed to understanding how the CCP capitalizes on American expertise.”

Responding to criticism stemming from the FT report, McKinsey said the UCI was a separate entity set up in partnership with two Chinese universities and McKinsey had not authored the research.

“We reject efforts to use a document McKinsey didn’t write and work we didn’t do to call into question our 75-year history of supporting the US government,” the New York-based consulting firm said.

McKinsey has won over a billion dollars in federal contracts since 2008, according to data from USAspending.gov, with at least $450 million coming from the Pentagon.

The firm has for the past three year been frozen out of contracts with the FDA following allegations of conflict of interest for concurrently working with opioid manufacturers while advising the FDA.