MPs call on McKinsey to disclose clients to dispel concern about conflicts of interest

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Opposition MPs are asking McKinsey and Co. to disclose its private sector client list to address possible conflicts of interest involving tens of millions of dollars of work for the Canadian government.

U.S. court files show the global consulting giant, which has counselled Ottawa on refashioning its military and defence computer systems, has also advised American defence and information technology companies.

Court documents filed by McKinsey in Puerto Rico in May and October of last year list Lockheed Martin, Leidos and Northrop Grumman, IBM and Microsoft as clients. McKinsey has won numerous contracts for the Department of National Defence to modernize the Royal Canadian Navy, upgrade technology and improve readiness, among other purposes.

“I find the situation deeply troubling. We know that there have been instances in other parts of the world where there have been conflicts of interest,” Conservative MP Garnett Genuis said. “We want to see the full range of potential conflicts of interest by accessing that client list.”

U.S. lawmakers have investigated McKinsey for advising Purdue Pharma on how to boost sales of opioids at the same time the Federal Drug Administration (FDA) was relying on the company’s advice to ensure drug safety and protect American lives. The company was also criticized by Republican Senator Marco Rubio for advising the U.S. defence department while working for a Chinese state-owned enterprise that helped build China’s artificial islands in the South China Sea – a major point of military tension between Beijing and Washington.

NDP MP Matthew Green said McKinsey’s work with U.S. defence contractors and IT giants is “an absolute red flag,” which he said is another reason the House of Commons committee on government operations and estimates wants the list of all its clients.

Alley Adams, head of external relations for McKinsey & Co. Canada, suggested that MPs may not obtain a full list, saying “we rigorously protect our clients’ confidential information.”

But she insisted that McKinsey follows strict protocols to prevent conflicts of interest in its work with all its clients.

“In addition, we are subject to our government clients’ conflict of interest requirements and review potential conflicts – both actual and potential – accordingly,” she said.

The Globe and Mail has reported that the total value of federal contracts awarded to McKinsey since 2015 is at least $116.8-million, up from a previous estimate of $101.4-million provided by the government earlier this month.

On Wednesday, the Commons committee on government operations will hear from Dominic Barton, the former global managing director of McKinsey. It’s expected he will be asked about his relationship with the government, including Prime Minister Justin Trudeau and Finance Minister Chrystia Freeland.

The opposition parties allege that McKinsey got many of its federal contracts because of Mr. Barton’s Liberal connections.

“It’s irrefutable that these connections occurred – that the contracts came at a time when, you know, he was able to wield his influence, at a time when they were under investigation on the Purdue stuff,” Mr. Green said.

Mr. Genuis posted a video clip Tuesday of the Prime Minister praising Mr. Barton during a 2017 gala dinner hosted by the Public Policy Forum. “When I went to the World Economic Forum in Davos, just a few months after having been elected, I had the privilege of meeting a number of world business leaders,” Mr. Trudeau said in the clip. “Who set that up? Dominic Barton … They all knew Dominic. I came to appreciate, maybe even envy, Dominic’s contact list. So we recruited him.”

Mr. Trudeau told the 2017 audience that he and his then-finance minister Bill Morneau offered Mr. Barton $1 a year to lead an advisory council on economic growth.

“I don’t think anyone can argue that we’re not getting our money’s worth from Dominic. In fact, it’s probably the best dollar that the Government of Canada has ever spent,” he said, describing Mr. Barton as modest, accessible, accomplished and “ridiculously humble.”

Liberal Immigration Minister Sean Fraser rejected the accusations of special treatment for McKinsey on Tuesday, saying Conservatives “are trying to create a bogeyman.”

Mr. Barton has also strongly dismissed the notion that his former company received favourable treatment.

“I think the idea that there’s some sort of a cozy relationship whereby McKinsey, because they know the Prime Minister and they know the Liberal government, they therefore get consulting fees, is just a complete crock,” he said in an interview that aired Jan. 23 on former CBC anchor Peter Mansbridge’s The Bridge podcast.

“I think the notion that there was some special nefarious relationship between the Liberal government and McKinsey I think it’s just wrong. The facts don’t corroborate it,” he said.

Mr. Barton said the growth in federal outsourcing generally, and to McKinsey in particular, is part of a larger trend in which governments and private companies are increasingly turning to consultants.

During the podcast, Mr. Mansbridge asked Mr. Barton to comment on the fact that McKinsey paid a US$600-million court settlement over its role in the promotion of opioids.

“On the opioid crisis, I think there are things that I’m not proud of and I feel very sorry for the impact that … the opioid crisis had. I also think it’s important to be clear about what it is that McKinsey did and didn’t do,” He said. “McKinsey gets thrown under the bus for a lot of different things that are out there.”

Mr. Barton ran McKinsey for nine years, until 2018.

In the early years of the Liberal government, Mr. Barton acted as both the head of McKinsey and the chair of Mr. Morneau’s advisory council on economic growth. The council was supported by McKinsey staff and made several major policy recommendations, many of which were enacted by the government to some degree.

Among those suggestions was that the government dramatically increase Canada’s annual immigration targets and create a Canada Infrastructure Bank, both of which it did.

In September, 2019, after leaving McKinsey, Mr. Barton was named Canada’s ambassador to China. His foreign posting ended in December, 2021.