GOP lawmakers have demanded information about the firm’s work with the Chinese Communist Party, and hinted that the firm may face more scrutiny in the future.
GOP lawmakers have demanded information about the firm’s work with the Chinese Communist Party, and hinted that the firm may face more scrutiny in the future.
R epublican lawmakers teased a future congressional probe into McKinsey & Company’s business relations with the Chinese government on Tuesday, demanding to know whether the powerful global consultancy passed along information regarding its U.S.-government clients to the Chinese Communist Party.
In a letter addressed to McKinsey’s global managing partner, Bob Sternfels, Senator Marco Rubio and several GOP members of Congress explained how recent revelations about McKinsey’s work with opioid manufacturers raised new concerns about its work with the Chinese party-state. The lawmakers also hinted that McKinsey may face more congressional scrutiny if Republicans retake Congress in November’s midterm elections.
“In light of [the Chinese government’s] atrocities, McKinsey’s apparent work on behalf [sic] the CCP raises ethical concerns which we would like you to address on an ongoing basis, in anticipation of oversight likely to be conducted in the next Congress,” Rubio and his colleagues wrote.
New revelations about McKinsey’s reported role in enabling the opioid crisis prompted the letter. Rubio and the other lawmakers cite the FDA’s recent decision, apparently in response to those revelations, to stop awarding new contracts to McKinsey while it looked into the firm’s conflict-of-interest policies. According to the lawmakers, a House Oversight and Reform Committee investigation into McKinsey found that “McKinsey appears to have passed along [to its pharmaceutical-industry clients] non-public information [obtained through] its relationship with the FDA or discussed its willingness to do so.”
“Each example [of these alleged disclosures] raises serious questions about the ‘internal firewalls’ McKinsey routinely claims to have in place when asked by lawmakers, federal contractors, or the press. What is more, these examples revolve around a single client, raising the specter that such casual disclosure of firewalled information could be happening routinely across the company,” the letter added.
Last year, NBC reported that a McKinsey subsidiary had quietly revealed a client relationship with the Chinese government in a 2020 court filing, alarming Congress and U.S.-government agencies. McKinsey is a federal contractor that would have knowledge of defense planning, cybersecurity protocols, and myriad weapons systems, given its work with dozens of Pentagon offices, the CIA, and other national-security-focused agencies.
In the filing, McKinsey disclosed a relationship to the “Chinese government.” Responding to NBC, the company said that that does not “refer to work for the Central Government, Communist Party of China or the Central Military Commission of China,” which have “never been clients of McKinsey.”
But there is ample reason to be skeptical of the company’s claim of never having worked with the Chinese Communist Party or other key party-state organs. Rubio told NBC that McKinsey “appears to have lied to me and my staff on multiple occasions” last December, after he demanded documents from the consulting giant. He said that McKinsey employees told him in July 2020 that their firm did not work with the Chinese government.
McKinsey’s online presence also undercuts its claims. As National Review reported in February, a McKinsey webpage previously cited the firm’s work for “several central government ministries” in China, and featured an image of an auditorium in which key party officials regularly convene. That webpage was taken down sometime in 2019, as concerns about the Chinese government’s conduct grew in Washington.
The Rubio-led group cited specific CCP-linked Chinese state-owned enterprises (SOE) that are McKinsey clients named in the filing, including China Construction Bank and China Resources Holdings Company. They wrote that McKinsey’s work with those firms could be considered support for the Chinese military.
“In accordance with Beijing’s own laws—including its policies promoting ‘Military-Civil Fusion’—General Secretary of the CCP Xi Jinping has repeatedly emphasized the need for the Chinese government to break down all barriers between the military and civilian sectors of the economy,” the lawmakers wrote. “McKinsey’s work on behalf of Chinese SOEs, and other firms, is tantamount to work on behalf of the CCP and could lead to direct or indirect support for the CCP’s armed wing, the People’s Liberation Army.”
The letter’s other signatories include Steve Daines, James Lankford, Tom Cotton, Christopher Smith, Vicky Hartzler, Michelle Steel, and Brian Mast — all members of the Congressional-Executive Commission on China, a government panel that focuses on CCP human-rights abuses. Democratic lawmakers were asked to join the letter but declined, according to Rubio’s office. A spokesman for the commission’s House Democrats told NR that while they don’t oppose tackling this issue, the letter did not fall directly enough under the panel’s focus on human rights.
The letter writers requested all information on McKinsey’s work in China, including its work on behalf of the CCP and CCP-linked entities, in addition to an explanation of how its firewalls “have prevented, and will prevent in the future, the transfer of confidential information” about U.S.-government agencies and American businesses to the Chinese party-state.
If Republicans win back either chamber of Congress in November, the letter-writers will be in a position to ramp up their scrutiny of McKinsey: Rubio is likely to chair the Senate Intelligence Committee, Hartzler is a member of the House Armed Services Committee, and Mast sits on the House Foreign Affairs Committee.
And as if the potential for multiple overlapping probes of McKinsey’s practices weren’t a big enough problem for the firm, the bipartisan appetite for legislative action cracking down on its work with foreign entities is also growing.
Earlier this month, Senators Joni Ernst and Gary Peters introduced the CONSULTS Act, which would increase oversight of federal contractors’ work in such a way as to prevent them from also advising entities linked to China and other U.S. adversaries. Senator Josh Hawley also recently introduced the Time to Choose Act, which would bar the Pentagon and other agencies from working with companies that do business with the Chinese government.
A McKinsey spokesperson did not respond to a request for comment about the letter and potential future probes into its work in China.