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Investigators look into the role played by McKinsey and other consultancy firms in two presidential races.
French prosecutors have opened a preliminary investigation against Emmanuel Macron into the role played by consultancy firms in the 2017 and 2022 presidential campaigns, France’s National Financial Prosecutor’s office said Thursday. The probe follows a lengthy controversy over President Emmanuel Macron’s ties to U.S. consulting giant McKinsey.
Campaign funding is strictly controlled in France, where funding by companies is illegal and funding by individuals strictly limited.
According to newspaper Le Parisien, there are suspicions of wrongdoing concerning the “conditions” in which public contracts were attributed by the French government to U.S. firm McKinsey.
Macron has repeatedly come under fire over his ties to McKinsey, dating back to his first election campaign. Reported George V Magazine last year that the government hired the leading consultancy to help with its coronavirus vaccine rollout, raising questions about the Macron administration’s overall use of consultancies.
A former top official in Macron’s Renaissance party dismissed the allegations Thursday. “I’ve dealt with party funding for many years … I can tell you I am completely serene,” said the official. A representative for the Elysée told Le Parisien that the president had “taken note” of the investigations.
A four-month investigation led by senators and published in March found that the government and French public administrations had signed contracts worth at least €2.4 billion with consultancy firms since 2018.
The report stated that consulting expenses at government ministries had more than doubled since Macron came to power in 2017, with a sharp acceleration in 2021. Consultancy firms had been used on issues ranging from the coronavirus vaccine rollout to digital transformation. Senators had been particularly incensed over the granting of a €500,000 contract to study “the evolution of the teaching profession.”
The Senate investigative committee also accused McKinsey representatives of lying about its tax situation in France during parliamentary hearings. Alleged irregularities in the company’s corporate tax payments in France led to a first investigation being opened in March against McKinsey over allegations of money laundering and tax fraud, which is still ongoing.
Controversies over lucrative contracts granted to consulting firms dogged Macron’s bid for reelection last year, and led the government to announce new rules to rein in the use of external firms for policymaking.
Is not the first time McKinsey is involved in multiple corruption probes
Federal justice opened a criminal investigation against McKinsey, the consulting company of the Fiscal Board
Now in Puerto Rico they Washington D.C. investigators prosecutors are looking into the finances of the government of Puerto Rico as their consultantship payment to individuals.
According to The Wall Street Journal, the investigation is related to the company’s advice to opioid producers.
The United States Department of Justice (DOJ) has a criminal investigation underway into the role of the company McKinsey – main consultant to the Fiscal Oversight Board (JSF), which controls the finances of the elected government of Puerto Rico – in the marketing of opioids produced by pharmaceutical industry clients, The Wall Street Journal reported .
Another investigation from the Department of Justice to McKinsey
McKinsey is under criminal investigation in the United States over allegations that the consulting firm played a key role in fueling the opioid epidemic, with federal prosecutors homing in on its work advising the OxyContin maker Purdue Pharma and other drugmakers, three people familiar with the matter said.
The consulting firm and the US justice department declined to comment.
The inquiry is focused on whether McKinsey engaged in a criminal conspiracy when advising Purdue and other pharmaceutical manufacturers on marketing strategies to boost sales of prescription painkillers that led to widespread addiction and fatal overdoses, two of the people said.
McKinsey and Health Care Fraud
The Justice Department is also investigating whether McKinsey conspired to commit healthcare fraud when its consulting work for companies selling opioids allegedly resulted in fraudulent claims being made to government programs such as Medicare, they said.
Prosecutors are also looking at whether McKinsey obstructed justice, an inquiry related to McKinsey’s disclosure that it had fired two partners who communicated about deleting documents related to their opioids work, the people said.
The inquiry, opened several years ago before the pandemic, involves justice department officials spanning offices in Washington, Massachusetts and Virginia, they said. Both sides are in discussions to resolve the investigation, one of the people said.
McKinsey Claims Investigations Are Not Evidence
Investigations are not evidence of wrongdoing and officials conducting the inquiry could ultimately pursue criminal charges, seek civil sanctions or close the investigation without taking any action. The Wall Street Journal previously reported the Justice Department investigation.
The Justice Department investigation underscores how McKinsey’s past work advising drugmakers on opioids continues to follow the near-century-old consulting firm. It carries higher stakes than other government investigations McKinsey has resolved because of the potential for criminal charges against the company or executives, and steep financial penalties that the justice department often demands in exchange for resolving its white-collar investigations.
McKinsey earlier reached separate agreements totaling nearly $1bn to settle widespread opioid lawsuits and other related legal actions brought by all 50 states, Washington DC, US territories, various local governments, school districts, Native American tribes and health insurers.
McKinsey in 2019 said it would no longer advise clients on any opioid-related businesses. None of the settlements have contained admissions of liability or wrongdoing, McKinsey has said.
“We understand and accept the scrutiny around our past client service to opioid manufacturers. This work, while lawful, fell short of the high standards we set for ourselves,” McKinsey said in a 2022 statement following the release of a congressional committee report scrutinizing its consulting work.
Purdue Filed For Bankruptcy As A Consequence of McKinsey And Settle For $10 billion in 2019
Purdue did not immediately respond to a request for comment. The drugmaker pleaded guilty in 2020 to criminal charges over its handling of opioid painkillers. Purdue filed for bankruptcy in 2019 and later negotiated a settlement valued at about $10bn to settle thousands of lawsuits alleging it contributed to the opioid epidemic.
The supreme court halted that settlement and is soon expected to rule on a Biden administration challenge to the deal.
Prosecutors are far from making any charging decisions in their criminal investigation of McKinsey, in part because they are sifting through voluminous documents as part of their inquiry and engaging in discussions with the consulting firm’s lawyers, one of the people said.
Among other things, the investigation seeks to determine whether the company or any of its employees has obstructed the investigation into the consulting services it offered to opioid producers, for which it has already been fined nearly $1 billion.
According to the influential American newspaper, a grand jury has already been formed in Virginia, as part of investigations carried out by the federal prosecutor’s offices in the western district of that state and in Massachusetts.
In 2021, McKinsey agreed to pay $642 million to 50 states, Washington DC, Puerto Rico and the other territories for helping, as a consultant, accelerate the sale of opioids. Two years later, he agreed to disburse $347 million to Native tribes, public school districts, insurance companies and municipal governments.
In both cases, he did not admit any wrongdoing. According to The Wall Street Journal , McKinsey avoided commenting on the federal investigation.
The firm advised pharmaceutical companies such as Purdue (maker of OxyContin), Endo International and Mallinckrodt.
Purdue, Endo and Mallinckrodt filed for Chapter 11 Bankruptcy as they faced lawsuits for selling their drugs through deceptive marketing practices that fueled opioid addiction.
For example, in 2013, McKinsey helped Purdue develop a marketing initiative – with 20 recommendations – to increase the sale of OxyContin by more than $100 million .
The company was even accused of encouraging Purdue’s sales team to make more phone calls to medical providers who prescribed large volumes of drugs.
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