Press Releases

NBC: Advising both Chinese state companies and the Pentagon, McKinsey & Co. comes under scrutiny
November 13, 2021
NBC News
 
Global consulting giant McKinsey & Co.’s work with both the Pentagon and powerful Chinese state-owned enterprises poses a potential risk to national security that federal agencies can no longer ignore, lawmakers and critics say.
 
McKinsey’s consulting contracts with the federal government give it an insider’s view of U.S. military planning, intelligence and high-tech weapons programs. But the firm also advises Chinese state-run enterprises that have supported Beijing’s naval buildup in the Pacific and played a key role in China’s efforts to extend its influence around the world, according to an NBC News investigation.
 

 
Under federal contracting law, companies are required to disclose any conflict of interest, or appearance of a conflict, when bidding on a proposal, and to present a plan to address the conflict. It remains unclear if McKinsey has disclosed any potential conflicts of interest due to its work with Chinese firms, including in its contracts for the Defense Department. 
 
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Sen. Marco Rubio, R.-Fla., has demanded that the firm offer more information about its work in China and explain how it prevents possible conflicts between its consulting business for the U.S. government and for Chinese clients.
 
In a November 2020 letter to McKinsey, Rubio complained that the firm had failed to directly respond to many of his questions in earlier correspondence. The senator wrote he was concerned the firm “either wittingly or unwittingly — is aiding the Chinese Communist Party’s attempt to supplant the United States.”
 
The senator asked McKinsey if it sought to avoid working with Chinese clients in areas of critical national security interest to the U.S., including telecommunications, the military and health care.
 
The firm did not directly answer the question but said it could not disclose information on specific clients or engagements because of its “contractual and professional obligations to maintain confidentiality,” according to Rubio’s letter.
 
Rubio also asked McKinsey what kind of safeguards the firm had in place to ensure its work for U.S. government entities did not inform its work with Chinese companies. The firm provided no answer, Rubio wrote.
 
In addition to the exchange of letters, Rubio’s senior staff and top policy advisers met with members of McKinsey’s global leadership team via Zoom in March, according to a congressional aide present.
 
“Most of the meeting consisted of generalities, platitudes and broad denials of wrongdoing or conflicts of interest. Every time a member of Sen. Rubio’s staff asked specific questions, McKinsey’s leadership repeated that they could not discuss their clients,” the congressional aide said.
 
Rubio told NBC News the federal government should stop hiring McKinsey for consulting work.
 
“There is no reason the U.S. Government should continue using McKinsey given the company’s inability to provide clear, direct answers about its work in China,” Rubio said in an email.
 
The McKinsey spokesperson confirmed the company’s senior leadership in the U.S. and Asia met via Zoom with Rubio’s staff this year.
 
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Rubio has proposed legislation that would require federal contractors to reveal any commercial ties with the Chinese government, military or state-controlled entities. Other lawmakers have proposed bills to prevent U.S. contractors from buying key technological equipment or solar panels from Chinese firms.
 
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