House Select Committee on the Chinese Communist Party chairman John Moolenaar (R-MI), along with US Senators Marco Rubio (R-FL) and Joni Ernst (R-IA), called Friday for a federal investigation into consulting giant McKinsey. They raised serious concerns about McKinsey’s ties to the Chinese government and state-owned enterprises, and questioned whether the firm should continue to be eligible for Department of Defense contracts.
This push for scrutiny comes as McKinsey is reportedly restructuring its operations in China to minimize potential risks.
In a letter to US Defense Secretary Lloyd Austin, dated October 17 and released on Friday, the lawmakers called on the Department of Defense to reassess McKinsey’s eligibility to work with the agency. They pointed to federal rules requiring McKinsey to disclose any conflicts of interest that could compromise its work in the US and said, “It is deeply disturbing that McKinsey, which has a history of undermining the interests of the U.S. government in favor of another client, engaged in sensitive government contracts with DOD while failing to disclose its work with the PRC [People’s Republic of China] government and its state-owned enterprises on issues of national importance.”
The Select Committee also sent a similar letter to US Attorney General Merrick Garland saying, “McKinsey not only failed to make necessary disclosures but actively concealed its sensitive work for the PRC government in sworn testimony before Congress. In describing McKinsey’s Chinese contracts, McKinsey’s Global Managing Partner testified under oath before Congress this year that the company never worked for the central government of the PRC.”
The letters accused McKinsey of aiding China’s swift military and economic growth through its consulting services, while failing to disclose its work with the Chinese government as it secured over $480 million in US defense contracts since 2008. Lawmakers expressed concern that these contracts gave McKinsey access to classified or sensitive national security information.
The letters revealed case-by-case examples that McKinsey provided consulting services to key Chinese government agencies, including the National Development and Reform Commission, which drafts Beijing’s five-year economic plans. These blueprints shape China’s economic strategies every five years. They also highlighted McKinsey’s work with other major entities, such as the State-owned Assets Supervision and Administration Commission, which oversees China’s state assets, and state-owned giants like China COSCO Shipping and China Communications Construction Company Ltd.
According to the lawmakers, McKinsey has attempted to sidestep responsibility for its advisory role in shaping China’s five-year plans, including the 13th Five-Year Plan, by attributing the work to its affiliates, McKinsey Global Institute and the Urban China Initiative. However, they dismissed this explanation as “misleading,” arguing that McKinsey “essentially controls” both organizations.
The lawmakers wrapped up their demands by insisting on a briefing from both Garland and Austin by December 1, seeking answers on McKinsey’s potential legal violations and its continued role as a Department of Defense contractor.
