Consulting Giant Walks Away From ICE Contracts, Works With Chinese Government

Managing partner said company would not work anywhere 'at odds with our values'

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• August 9, 2018 4:00 pm


A U.S. consulting company that walked away from doing business with Immigration Customs and Enforcement citing ethical concerns continues to carry out contracts with governments and government-owned businesses in China, according to one of the company's websites.

McKinsey, one of the so-called "Big Three" management consulting companies, was featured in a New York Times article that quoted managing partner Kevin Sneader making a blanket guarantee in an employee memo that the company "will not, under any circumstances, engage in any work, anywhere in the world, that advances or assists policies that are at odds with our values."

The memo indicated McKinsey would end its relationship with ICE, even though Sneader acknowledged the contracts were not specifically "focused on developing, advising or implementing immigration policies, including the child-separation policy."

McKinsey's decision to part ways with ICE is attributable to the political uproar that followed President Trump's "zero tolerance" immigration policy, which led to some children being separated from their parents when apprehended at a border crossing.

McKinsey's "About Us" page on a China-specific website indicates that 30 percent of its business in the country is with state-owned enterprises and another 10 percent is with "government and non-profits." It further states McKinsey is an "advisor to some of the region's major businesses, governments, and institutions."

"We've also advised several central government ministries on a range of high impact issues, from designing healthcare reform policies, to providing talent and leadership development programs for the next generation of government leaders, to crafting policies and specific measures aimed at spurring more domestic consumption," the same webpage said.

The authoritarian nature of the Chinese regime along with human rights concerns have made doing business in the country a distasteful proposition for many companies.

For example, in 2010 Google pulled its search engine out of China. Sergey Brin, one of the co-founders of the search engine said, "in some aspects of their policy, particularly with respect to censorship, with respect to surveillance of dissidents, I see some earmarks of totalitarianism."

Google ultimately re-entered the Chinese market and is now facing accusations of hypocrisy for citing ethical concerns when withdrawing from a Pentagon contract.

"That Google would seek re-entry to a country whose efforts at totalitarian control are increasing while the company ostentatiously separates itself from a U.S. defense program is more than a contradiction," the Wall Street Journal‘s editorial pages said. "It is naïve. What kind of world does Google think we live in?"

"The Chinese Communist regime is the worst human rights abuser in the world but you don't hear a word of criticism of China's human rights records from this ‘ethical' consulting firm," said Dr. Lianchao Han, a visiting fellow with the Hudson Institute and the vice president of Initiatives for China/Citizen Power, a Chinese pro-democracy nongovernment organization.

"Instead, you can find one policy recommendation after another to show its collusion with Beijing's strategy such as ‘one-belt-one-road' to ensure the success of its global expansion. Kleptocracy and systematic corruption are another serious illness in China but no McKinsey report touches it. Clearly, McKinsey's ethical standard is highly selective," Han concluded.

The "one-belt-one-road" strategy is a massive infrastructure build-out plan by the Chinese government first aimed at strengthening trade routes between China, Central Asia, and Europe, but which some also see as potentially strengthening China's military hand as well over the long term.

When the Washington Free Beacon asked McKinsey if the continued work for the Chinese central government and other state-owned enterprises was in alignment with the company's values, a spokesperson would only reiterate how the relationship with ICE ended.

"Regarding our work with U.S. Immigration and Customs Enforcement: From 2016 until June 2018, we supported the agency on a long-term program," the spokesperson said by email. "Consistent with what we have stated previously, and as the agency has confirmed, our support for the agency ended because the work required was completed. Neither party changed the terms or shortened the contract."

The controversy originated internally with McKinsey, after an earlier report in June from the Times examined a government corruption scandal the company in involved with in South Africa, but also mentioned that McKinsey had $20 million in contracts with ICE.

"The disclosure that McKinsey was working with ICE 'caused a lot of discussions and alumni reactions,' one former partner said in an interview. It 'caused a bit of drama,'" the Times reported.

Published under: China, ICE