This year in South Africa, McKinsey faced the largest scandal in its history (surpassing its deep implication in the Enron implosion and the imprisonment of its former Managing Director Raj Gupta for insider trading). The firm won a bid with the state-owned power company Eskom, with a performance-based fee worth up to $700 million. According to a Times investigative report:
“The contract turned out to be illegal, a violation of South African contracting law, with some of the payments channeled to an associate of an Indian-born family, the Guptas, at the center of a swirling corruption scandal.”
McKinsey may face criminal prosecution and has agreed to pay back the $74 million in fees it received for the six months of work it carried out.
These are just the stories that leaked to the press. McKinsey is one of the most successful government contractors, with federal contracts worth $613 million between 2012 and 2018, with $150 million from the Department of Defense and $63 million from the Department of Homeland Security. The ICE contracts alone were worth $26 million. Public disclosures do not include the many projects McKinsey does for America’s defense contractors. Many of these projects are benign, bordering on banal, but some of them help organizations that make the bombs blowing up Yemeni school buses.
Clinton’s new tactics, McKinsey’s secret $5bn fund and when fashion meets high-tech whimsy
https://www.ft.com/content/979dbbd0-2b35-11e6-bf8d-26294ad519fc
John Garcia
https://www.mckinsey.com/our-people/jon-garcia
Jon took leave from McKinsey and was a senior official in the Clinton Administration in 1997–98, where he led the federal government’s task force that restructured a $6 billion portfolio of subsidies provided to bidders on spectrum for mobile communications services (the “C Block”).
Before founding RTS, Jon advised various managers of alternative asset funds, including private equity, distressed investing, and hedge funds.
Eric Braverman Tried to Change the Clinton Foundation. Then He Quit.
Inside the power struggle at Clinton, Inc.
In December, the board of the Bill, Hillary and Chelsea Clinton Foundation approved a salary of more than $395,000, plus bonus, for its Yale-educated CEO, Eric Braverman, while voting to extend his board term through 2017, according to sources familiar with the arrangement. Braverman, who had worked with Chelsea Clinton at the prestigious McKinsey & Company consultancy, had been brought in with the former first daughter’s support to help impose McKinsey-like management rigor to a foundation that had grown into a $2 billion charitable powerhouse.
https://www.politico.com/magazine/story/2015/03/clinton-foundation-eric-braverman-115598