When Emmanuel Macron learned of an investigation into claims that a consulting firm had won lucrative government contracts after supporting his presidential campaign, he shrugged it off.
I have nothing to fear,” he sniffled.
But the “McKinsey affair” is eating away at the French president like a “slow poison”, according to a top analyst.
Anti-Sleaze prosecutors’ criminal investigations were compounded last week when former investment banker Macron’s party headquarters were raided along with McKinsey’s Paris offices.
The affair is another hammer blow for the consulting firm embroiled in a series of scandals.
In South Africa, it faces charges related to looting the state rail freight monopoly to the UK.
First, French prosecutors launched investigations into McKinsey’s tax affairs
And in Britain the recent bombshell book When McKinsey comes to town: The hidden influence of the world’s most powerful consulting firm claimed McKinsey had “stolen bags from both sides of the NHS privatization dispute” by benefiting from the rollback of some of the NHS reforms it had helped make.
During the pandemic, “Boris Johnson entrusted the test-and-trace effort to a former McKinsey adviser, Dido Harding, now Baroness Harding of Winscombe. They and the top health authorities turned to private companies, not the NHS, to run the scheme.”
McKinsey charged £563,400 (€646,300) to provide a “vision, purpose and narrative” of the Harding-led programme. The book wrote that “it was a disaster”.
In France, the Macron administration’s massive recourse to consultants has hit a nerve, with many suspecting him of clandestine privatization and the takeover of US business interests.
McKinsey had not paid any corporate tax in France since 2011
A French Senate committee showed that the government had spent €2.4 billion since 2018.
For example, McKinsey earned $957,674 for advising on a pension reform plan that was eventually shelved, and $496,800 for outlining the “future of teaching” for the Department of Education.
The committee noted that McKinsey had not paid any corporate tax in France since 2011, adding that it had revenues there of 329 million euros in 2020. The consulting firm denied tax avoidance.
When the scandal erupted during his re-election campaign, Macron denied allegations of collusion with the group. “People got the impression that tricks were going on,” he said. “It is wrong.”
But Jordan Bardella of the far-right National Rally party said Macron was a “president turned spokesman for private interests”. And Clementine Autain, a left-wing MP, mocked his “great love of business”.
The scandal deepened when Le Monde reported that at least 10 of McKinsey’s advisors had worked on Macron’s 2017 manifesto. McKinsey reportedly helped him again when he won re-election this year.
First, French prosecutors launched investigations into McKinsey’s tax affairs. The probe was then expanded last month to see if Macron arranged for them to receive government contracts in compensation for aid.
“Society has the right to know what these projects are”
The allegations are damaging because Macron came to power in 2017 with a promise to clean up politics after the election campaign was soiled by Francois Fillon, his main rival. Macron enjoys immunity from prosecution while in office but could face questioning and indictment if he steps down in 2027.
Last month Finance Minister Bruno Le Maire admitted there used to be “excesses” in consultancy contracts but said they have been “corrected”.
However, when senators this month voted for an amendment proposing 19 measures to improve “transparency” at consulting firms, they received precious little reaction from the Macron camp.
“The Macron government seems in no hurry to consider our proposals,” said Arnaud Bazin, conservative chairman of the Senate committee that sparked the controversy.
“No one in government could give us a total of how much was being spent on consulting firms, so we had to do the work. Society has a right to know what these projects are, why they were commissioned, how much they cost, how they were valued.
“We found that some poor ones ended up costing a fortune,” he said.
Eliane Assassi, a communist senator who also sits on the committee, said France must put a stop to it pantouflage — the Gaulish term for the revolving door practice, in which senior officials shuffle back and forth on ‘slippers’ between the public and private sectors.
A case in point, she said, is the current head of the Ecole Polytechnique – France’s leading public engineering school – whose president, Eric Labaye, was a former McKinsey board member.
“We have to avoid conflicts of interest,” she said. “The idea is not to ban the use of private consultants, but to see if someone in the state administration can do the job instead.”
https://www.independent.ie/world-news/europe/laffaire-mckinsey-emmanuel-macrons-presidency-is-suffering-slow-poisoning-from-consultancy-row-42227408.html L’Affaire McKinsey: Emmanuel Macron’s presidency is suffering from ‘slow intoxication’ from advisory disputes