In its latest broadcast, the investigative program Cash Investigation revealed certain conflicts of interest existing between the French government and consulting firms, in particular McKinsey & Co. But the extent of these conflicts of interest goes beyond what the show reveals.
Consulting firms have long been criticized for their intervention with governments. Investigative journalists and academics have reported the growing influence of these companies over public administrations, citing cases such as daily spending of up to £1 million on private consultants under the UK’s Covid service -19 Test-and-Traceor the 10.7 million euros in contracts paid to McKinsey & Co by the French government during the same crisis.
Concerning McKinsey, the investigation into the French government’s excessive use of this firm gave rise to a Senate report and, ultimately, to a scandal called the McKinsey Gate. On September 18, 2024, journalist Élise Lucet brought the subject to the forefront in her show Cash Investigation. The episode focused on links between McKinsey and Emmanuel Macron’s 2017 presidential campaign, as well as allegations of fraud and tax evasion.
Criticism of consultants
Cash Investigation is a television show famous – or infamous, if you’re the subject of an episode – for its deep dives into controversies surrounding corporations and political figures. Hosted by investigative journalist Élise Lucet, the show has revealed a myriad of scandals, whether environmental or tax fraud. In this episode, Élise Lucet set out to unravel the network of influence that McKinsey allegedly wove during Emmanuel Macron’s rise to the presidency.
Consultants who took the time to watch the show were not impressed. “I found it stupid,” said a former strategy consultant on social networks, for example, summarizing the indifference felt by many players in the sector. For consultants, criticism surrounding the financing of the 2017 presidential campaign remains limited to the relationship between French President Emmanuel Macron and Karim Tadjeddine, the McKinsey partner who managed the firm’s relationship with the French government. Likewise, accusations of fraud and tax evasion were seen as issues limited to McKinsey’s financial practices, rather than something that specifically implicated consultants.
As a senior manager who works for the public sector explained to us by email, Élise Lucet’s angle of attack is “a rather hackneyed criticism”. With the consulting industry growing at least 10% annually, consultants say they are only meeting demand. According to an insider working for one of these strategy consulting firms, Élise Lucet misses the real target: criticizing the consultants when the fault lies with the French government, which mismanaged the use of their services.
Has the council lost its way?
However, there is broader criticism that consultancy firms have lost their professional ethics. Investigative journalist Duff McDonald, in his 2014 book about McKinsey, argued that the firm has strayed from the ethical standards established by its founder, Marvin Bower, in the 1950s, who invented management consulting by imitating the legal profession. While the consultancy initially focused on working in the primary interest of its clients, by the 1990s the focus shifted towards that of maximizing profits for the firm’s partners.
This development has given rise to a long series of scandals involving corruption, unethical work and conflicts of interest. Other consulting firms, such as Bain & Co. or BCG, have also experienced their share of scandals. In 2022, Bain & Co. was banned from bidding for South African government contracts due to its role in a state capture scandal, and BCG recently admitted to a scandal of corruption in Angola and agreed to forfeit $14 million in profits.
If the documentary Cash Investigation highlights Emmanuel Macron’s ties to McKinsey and highlights the French government’s excessive spending, it pays little attention to a crucial distinction: unlike elected officials, who are accountable to the public, consultants operate in the private sphere, motivated by financial interests that do not always align with the government’s responsibility to ensure social well-being. This potential conflict of interest casts doubt on the objectivity and reliability of consultants in policymaking.
A closer look at recent scandals that strategy consulting firms have faced in advising governments reveals four types of conflicts of interest.
- Personal interests and relationships
The financial and non-financial interests of consultants can often influence their actions and judgment. As revealed Cash InvestigationKarim Tadjeddine’s links with Macron’s party have allowed McKinsey to establish itself firmly in the government’s decision-making process. This not only advanced Tadjeddine’s career as head of McKinsey’s public sector practice, but also exposed a deeper conflict, where consultants build relationships or reach out to critical networks to secure contracts , bonuses or other rewards in the future. One of the most common forms for such conflicts is the pro bono work often carried out by consulting companies, including Cash Investigation revealed that it was a tool used by Tadjeddine to build relationships which then led to profitable contracts.
- Working with conflicting clients and missions
Consulting firms often find themselves advising clients with conflicting interests. McKinsey’s involvement in the opioid crisis is a prominent example of this recurring problem. The firm has provided strategic advice to both opioid manufacturers like Purdue Pharma and Food and Drug Administration (FDA), which regulates the opioid market in the United States. A House investigation found that McKinsey failed to disclose these conflicts of interest over a ten-year period, impacting 37 FDA contracts at a cost of more than $65 million. .
well that Cash Investigation has not addressed the issue of overlapping contracts, it is likely that similar conflicts exist in France, where McKinsey’s work with public and private clients raises concerns. According to the Senate, those who advise the government are legally required to declare potential conflicts of interest, but McKinsey has in most cases not submitted these declarations.
- A company focused above all on business
Consultancy firms can prioritize profit over the public good, as illustrated by the ban on Bain & Co from working for the South African government for ten years (and in response, for three years in the UK) . The company has been embroiled in allegations of state capture after restructuring the South African tax administration and centralizing procurement procedures.
In a high-profile case, the South African Government Commission found that Bain & Co had acted illegally by partnering with private companies to manipulate government procedures and shape policies in their favor. This case highlights a crucial problem neglected by Cash Investigation : Private consultants often pursue financial interests that conflict with the government’s responsibility to serve the public good. When companies like Bain & Co work for governments, these profit-driven motivations can undermine social good goals.
- The “revolving door” phenomenon
Another common conflict of interest is leveraging personal connections within government to influence decisions. This question, largely neglected in Cash Investigationis significant: around 1% of McKinsey employees in France have previously held high-level positions in the French government, and several former McKinsey consultants have moved on to government positions. In a sector where networks create opportunities, these “revolving doors” between consulting firms and government raise serious concerns about the impartiality of the actors involved.
A notable example outside of France is the role of Deloitte in the UK Covid-19 program. Test and Traceas detailed in the work The Big Con. Deloitte’s close links with government officials, including minister Chloe Smith – who previously worked for Deloitte – are likely to have helped speed up the signing of a £279.5 million contract with the firm during the pandemic.
A missed opportunity
In its attempt to expose the relationship between McKinsey and the French government, Cash Investigation fails to address deeper questions. The show does not fully explain how consultants have become invisible actors within governments, weakening the transparency necessary for democratic functioning. The documentary also downplays the extent of conflicts of interest, which are far more widespread than it shows. If the former Minister of Transformation and Civil Service, Stanislas Guerini, explains in the documentary that he avoided the use of voluntary work following the Senate investigations, he raises the following question: why focus on just one form of conflict of interest when there are many others at stake?
This article was co-written with Juan Carlos Javier Sakr, alumni of EM Lyon Business School.
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