A group of US lawmakers, including Congressman John Moolenaar, Senator Marco Rubio, and Senator Joni Ernst, have called for an investigation into McKinsey & Company’s failure to disclose its work with China’s government.
In letters addressed to the Department of Justice (DoJ) and the Department of Defense (DoD) on October 17 and made public on Friday, the lawmakers urged a review of McKinsey’s eligibility to continue working with the US government.
The lawmakers expressed concerns over McKinsey’s potential conflicts of interest, especially about US national security.
They cited federal rules requiring the consulting firm to disclose any activities that could pose a conflict of interest, particularly its dealings with China. The letters said,
“Our review of available Department of Defense documentation revealed that, in many instances, McKinsey repeatedly failed to disclose its work with the (People’s Republic of China) government when acquiring DoD contracts.”
McKinsey’s work with US defense and Chinese government
Since 2008, McKinsey has been awarded over $470 million in DoD contracts, including work on sensitive projects such as the F-35 fighter jet program and studies related to US Navy shipyards and advanced microchips.
However, the lawmakers allege that McKinsey failed to disclose its simultaneous advisory work with Chinese government agencies.
In particular, McKinsey has consulted China’s National Development and Reform Commission on its five-year economic plans and worked with Chinese state-owned companies like China COSCO Shipping Corporation and China Communications Construction Company.
The involvement with China’s government agencies while handling US defense contracts has raised red flags regarding national security risks.
McKinsey’s efforts to distance itself from China’s work
McKinsey has attempted to distance itself from its work on China’s five-year plans by attributing the advisory roles to its McKinsey Global Institute and Urban China Initiative.
However, the lawmakers criticized this as “misleading,” asserting that McKinsey effectively controls both entities, thereby maintaining its involvement in China’s strategic planning.
The lawmakers concluded that McKinsey’s activities may pose significant risks to US national security, urging the DoD and DoJ to thoroughly investigate the matter.
McKinsey, the DoD, and the DoJ have not yet commented on the situation.
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