McKinsey Passed Federal Ethical Test Despite Claims, Official Says | The influence of consulting firms

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McKinsey Passed Federal Ethics Test Despite Allegations, Official Says | The Influence of Consulting Firms

Helena Jaczek, Minister of Public Services and Procurement since August 31, 2022, testified before the parliamentary committee on Monday.

In their current form, the ethical rules that frame the x27;Granting contracts to private companies by the federal government cannot prevent McKinsey from winning contracts, despite the various scandals with which it has been associated in recent years, including its role in the crisis. opioids.

That's according to Public Services and Procurement Canada Deputy Minister Paul Thompson during his testimony on Monday before the Parliamentary Committee on Government Operations and Estimates.

< p class="e-p">Mr. Thompson had been invited to speak before this parliamentary committee alongside Minister Helena Jaczek and Associate Assistant Deputy Minister for Procurement Mollie Royds as part of the investigation into the #x27;awarding federal contracts to the consulting firm McKinsey since 2011.

On Monday, NDP MP for Courtenay-Alberni, Gord Johns, raised various allegations hanging over McKinsey: a South African corruption case, presidential interference in France but especially the role played by the consulting firm in the opioid crisis in the United States.

Do you think it's appropriate for the Government of Canada to reward a firm like McKinsey with millions of dollars in federal contracts for its involvement in distributing a drug that has already killed people? thousands of people? asked this elected official from British Columbia, the Canadian province most affected by the opioid crisis.

In 2021, McKinsey agreed to pay US$573 million to more than 45 states in the context of a lawsuit for its role in the opioid crisis in the United States, including providing advice to Purdue Pharma and Johnson & Johnson to boost sales of OxyContin, a highly addictive painkiller.

We are closely monitoring the situation regarding the allegations and activities mentioned by the MP, replied Deputy Minister Paul Thompson. These activities did not trigger our Integrity Regime, in the sense that none of McKinsey's affiliates had any criminal convictions, and that is. is what would cross the line with regard to our integrity regime.

Implemented in 2015, the Canadian integrity regime aims in particular to ensure that the government does business with suppliers who behave ethically in Canada and abroad.

Minister Helena Jaczek, for her part, claimed to have been informed of the various allegations against McKinsey only last week, when Gord Johns spoke to the Committee about the role of this firm in the opioid crisis.

< p class="e-p">In addition to Mr. Johns, this admission startled the conservatives Michael Barrett and Kelly McCauley, who also chairs the Parliamentary Committee. Mr. McCauley commandeered some of the Committee's precious minutes to express his grave concern, among other things.

A simple Google search shows a slew of pages that relate to fraudulent practices around the world, he said…and then repeated.

“We ask that you provide this committee with reliable, black-and-white information about how this supposed integrity test is designed to assess these companies.

—Kelly McCauley, Conservative MP and Chair of the House Government Operations and Estimates Committee

I am speechless to hear that you were unaware of the allegations against McKinsey, Mr. McCauley added. Not that I doubt your honesty today, but I find it extremely disturbing.

For his part, MP Michael Barrett, who questioned Minister Jaczek closely on this subject, was very dissatisfied with the answers provided. These are very disappointing responses, to say the least, he dropped after the exchange, which he later called a smack. astonishing on Twitter.

Ms. Prime Minister, with his Treasury Board colleague, Mona Fortier, to review the federal contracts awarded to this firm.

Under pressure due to revelations from the media, including Radio-Canada, regarding McKinsey's growing influence, Justin Trudeau made the announcement on January 11. The results of this review will be forwarded to the Committee as soon as possible, Minister Jaczek also indicated.

In addition to the opioid crisis, Paul Thompson's testimony touched on another addiction troubling: that of the federal government to data and tools provided by a few consulting firms, including McKinsey.

It was above all Bloc Québécois MP Julie Vignola who led the charge this time by trying to shed light on the exclusive rights granted to McKinsey when awarding certain contracts relating to the analysis comparative data.

If I understand correctly, they [McKinsey] have exclusive rights because they sold to Canada work methods, tools, which our officials, in the agreement, do not have the opportunity to apply through them. -same? So we are dependent, at that time, on what we bought? asked the MP for Beauport-Limoilou.

Exactly, replied Mr. Thompson. These firms, McKinsey and others, own the surveys and data that are used to benchmark against other countries or companies.

The Deputy Minister thus explained that the government needs the data possessed by a firm like McKinsey to carry out comparative analyzes which then allow it to make decisive decisions in terms of management and productivity or with regard to major reorientations, for example.

Last week, former McKinsey Global Director Dominic Barton testified before the Committee. In particular, he denied having a privileged relationship with Prime Minister Justin Trudeau, who had also appointed him Canada's Ambassador to China, a position he held from September 5, 2019 to December 31, 2021.

Mr. Barton's name just resurfaced on Monday in a government document that indicates he received a personal contract from Global Affairs Canada for the period 2021-2022. The amount paid to him was $148,059.

Radio-Canada contacted the department to find out the nature of the contract, which is not not disclosed in the government's 2021-2022 public accounts.