[HN Gopher] McKinsey never told the FDA it was working for both ...
___________________________________________________________________
McKinsey never told the FDA it was working for both the FDA and
opioid makers
Author : danso
Score : 358 points
Date : 2021-10-04 13:38 UTC (9 hours ago)
(HTM) web link (www.propublica.org)
(TXT) w3m dump (www.propublica.org)
| shkkmo wrote:
| The people jumping on here to say "of course McKinsey didn't need
| to disclose, it should have been obvious because consultants
| always have these conflicts of interest and don't disclose them."
| need to take a while to reevaluate their ethical guidelines.
|
| Failing to disclose conflicts of interest (and the details of the
| exact steps yaken to mitigate those conflicts) is unethical. In
| this case, the contract requiring disclosure takes this beyond
| unethical and it becomes a breach of contract that indicates
| possible fraudulent or deceptive intent.
| pempem wrote:
| These are details that ProPublica was unable to get. That
| doesn't mean they weren't communicated, as spywaregorilla (sp?)
| has indicated above.
|
| Every law firm, accounting firm, consulting firm once it hits a
| certain size has clients which conflict, but the same employees
| - the same _teams_ of employees - are barred from serving a
| conflict of interest. It is assured that: 1. the FDA asked 2.
| the FDA knew 3. the FDA agreed
|
| Its also probable that the person from the FDA working with the
| person from McKinsey had either already worked with them or
| been referred to them by a colleague that had worked with them.
| htrp wrote:
| It's technically not a conflict of interest, as long as the
| revenue streams roll through different offices or partners. /s
|
| Or as McKinsey puts it
|
| > "across more than a decade of service to the FDA, we have been
| fully transparent that we serve pharmaceutical and medical device
| companies. McKinsey's work with the FDA helped improve the
| agency's effectiveness through organizational, resourcing,
| business process, operational, digital, and technology
| improvements. To achieve its mission, the government regularly
| seeks support from additional experts who understand both the
| government's mission and the industries' practices. We take
| seriously our commitment to avoid conflicts and to serve the best
| interests of the FDA."
|
| In practice, just another example of questionable behaviour from
| McKinsey
| shkkmo wrote:
| > "the Contractor agrees it shall make an immediate and full
| disclosure, in writing, to the Contracting Officer of any
| potential or actual organizational conflict of interest or the
| existence of any facts that may cause a reasonably prudent
| person to question the contractor's impartiality because of the
| appearance or existence of bias."
|
| So "it should have been obvious" or "technically it wasn't a
| real conflict of interest" is really not a defense here.
| cycomanic wrote:
| > > "the Contractor agrees it shall make an immediate and
| full disclosure, in writing, to the Contracting Officer of
| any potential or actual organizational conflict of interest
| or the existence of any facts that may cause a reasonably
| prudent person to question the contractor's impartiality
| because of the appearance or existence of bias."
|
| > So "it should have been obvious" or "technically it wasn't
| a real conflict of interest" is really not a defense here.
|
| Exactly the key sentence that many people overlook is:
| "actual organizational conflict of interest or the existence
| of any facts that may cause a reasonably prudent person to
| question the contractor's impartiality"
|
| Like i said above it's not if you think you can be impartial
| it's if others might think you might not be impartial, in
| other words if they perceive that you could have a conflict
| of interest.
| refurb wrote:
| This isn't a very fair take. Investment banks do the same. How
| many companies ask Goldman to help with their IPO? How many are
| competitors? Plenty.
|
| The company has firewalls to separate different work products
| and have _way more to lose_ by violating company
| confidentiality than by leveraging it.
| 7952 wrote:
| If there is a potential conflict of interest you should tell
| the client and let them decide.
| tamade wrote:
| So-called firewalls at i-banks and consulting firms are
| routinely circumvented. These conflicts are self-policed and
| waivers are doled out more often than not
| cycomanic wrote:
| When reviewing goverment grant proposals I am not allowed to
| review anything coming from the same university, even if I
| work in a completely different department/campus etc. same
| goes for conference reviews, but somehow if there is much
| more money involved the rules don't apply anymore?
|
| Generally the rule for declaring a conflict of interest is
| not if you think that you have a conflict of interest, but if
| your role could be perceived as a conflict of interest. I
| would say this is clearly the case here.
| throwawaycities wrote:
| Your example is an investment bank that was caught and fined
| for advising clients to buy toxic assets during the 2008
| housing bubble, while it simultaneously unloaded the same
| assets.
|
| Of course they too publicly claimed that wasn't a conflict or
| even evidence of a conflict, but then the communications were
| leaked showing Goldman employees knew the assets were toxic
| and the company needed to push on them on customers to keep
| the price up while the bank liquidated its own positions.
| burkaman wrote:
| Does Goldman sign contracts promising to disclose all
| potential conflicts of interest when they help with an IPO?
| Does Goldman have a history of violating those contracts and
| paying $30 million to settle the case? Does Goldman have a
| very recent documented history of corrupting government
| officials and leveraging them to make money?
|
| I guess it wouldn't surprise me, but all those things are
| definitely true of McKinsey.
| htrp wrote:
| Consulting is more about long-term multi-year projects to
| shape things like policy (for regulators) or strategy (for
| companies). IPOs are very transactional by nature.
|
| The walls you speak of are usually between the trading side
| and the capital markets side of the firm, where there is very
| little overlap. In this case though, I would wager people who
| worked on the regulatory side were constantly being restaffed
| onto the pharmaceutical side and vice versa.
| briffle wrote:
| I'm pretty sure Goldman discloses that, and the probably
| exlains/demonstrates to the client their controls to enusre
| the areas stay seperate. Not disclosing it is at least a bit
| sketchy.
| pacija wrote:
| Aaah, it is much clearer now how come FDA approved COVID
| vaccines. I guess we'll soon also find out that Biden got loads
| of money for mandating them.
|
| /ducks
| cm2187 wrote:
| Though it would be naive on the side of the FDA to assume
| McKinsey didn't advise some pharma companies. The list of
| Fortune 500 companies they don't advise is probably shorter
| than the one they advise. That doesn't excuse bad disclosure if
| it is the case, but it is hard to argue the FDA would have done
| anything differently.
| cde-v wrote:
| Exactly, just like there was no conflict between the consulting
| and accounting arms of Arthur Andersen.
| boh wrote:
| Sorry but I have a hard time believing the FDA didn't know
| anything about McKinsey's ties to pharmaceuticals.
|
| The scenario here is likely ProPublica coming to the FDA and
| asking why they hired McKinsey since it has ties to Pharma. FDA
| comes back and says McKinsey never "technically" told them. So
| that's the story.
|
| Any public agency that hires McKinsey can assume a conflict,
| since McKinsey has clients in every industry. That's partially
| why they hire them, to get insider views on the industry they
| regulate/deal with.
| mousetree wrote:
| Agreed. It's very clear on McKinsey's website that they do work
| for pharma companies.
| conductr wrote:
| > The news of McKinsey's opioid work apparently did little to
| dampen the FDA's enthusiasm for the consultancy. In March 2019,
| just after the news broke, the agency signed a new contract
| with McKinsey -- extending the firm's multiyear effort to help
| the FDA "modernize" the process by which it regulates new
| drugs.
|
| I agree too. I think the FDA hires them exactly because of
| their clients. They want to modernize their processes, they
| need intel from industry. How else does McKinsey get this intel
| besides working with industry?
|
| It's very much a meet in the middle process. The FDA doesn't
| want to completely disrupt industry and they'd like to know
| their new regulations are able to be implemented and probably
| also care to some degree how painful they are for industry.
| However as regulators, they could never Work side by side with
| the industry in this effort.
|
| It wasn't disclosed likely because it was part of the value and
| McKinsey, through conversation with FDA, thought it was
| understood. FDA hired them again, so I'm interpreting that as a
| sign of them not actually thinking a COI occurred, or a
| material lack of disclosure.
| dillondoyle wrote:
| Another gross thing they did: A former DEA council in charge of
| regulating distributors then worked with them to pass a law by
| unanimous consent neutering this single enforcement tool the DEA
| had.
|
| The former DEA attorney "gave the industry intimate knowledge of
| the DEA's strategy."
|
| Below links have gross records that reveled among other things
| that a Rep. sponsoring the bill emailed the lobbyists asking for
| questions he can ask the DEA...
|
| If you haven't watch Gibney's "Crime of the Century" on HBO it
| touches on this incident. The context is that the DEA used a stop
| order against McKesson, it was one of the only tools they had.
| McKesson did not like this. They pushed back HARD. I understand
| concerns that legit non-opiate meds were held up for a few days,
| but this was the only tool DEA had to send a message.
|
| Of course.... "Purdue was very active in influencing the ultimate
| definition of an 'imminent danger to the public health or
| safety.' "
|
| Humans, hell even the most obvious 'AI', could flag ginormous
| amounts of pills going to tiny zip codes. They put profits over
| people's lives. They violated the law, minimally in spirit, I
| believe in conservative textual reading.
|
| "the sponsors and co-sponsors have received $1.4 million in
| campaign contributions from the industry and the alliance,
| according to campaign finance records."
|
| It's shocking how relatively tiny amounts of money open access to
| decision makers.
|
| Gibney's doc also reveals this addiction pushing behavior is
| endemic: Purdue had a government regulator sit in a motel and
| draft their label - which gave them the excuse to market a
| potentially 'less addictive' drug and we all know what happened
| from there.
|
| https://archive.is/bmCiD
| https://www.cbsnews.com/news/whistleblowers-dea-attorneys-we...
|
| I have very strong feelings about what I consider crimes of big
| pharma & opiates. To me, our for-profit system is a root cause of
| human misery. Obviously complicated issue, but I think there has
| to be some type of semi competitive socialized healthcare.
| thecleaner wrote:
| Is there anything useful which consulting as an industry does ? I
| have been hard-pressed to find examples.
| Grustaf wrote:
| I'm sure they did tell the opioid makers though.
| tharne wrote:
| > I'm sure they did tell the opioid makers though.
|
| That was probably one of the big selling points they
| highlighted in their RFP PowerPoint.
| DSingularity wrote:
| It was part of their pitch. "And here is the water cooler where
| the consultants working for the FDA are known to discuss the
| details of the FDA investigation into the pharmaceuticals role
| in the opioid crisis".
| MattGaiser wrote:
| Doesn't McKinsey frequently work for different clients in the
| same industry even? I never got the impression that consulting
| firms really limited themselves in that way.
| mrep wrote:
| Bain supposedly does not work with competitors:
| https://en.wikipedia.org/wiki/Bain_%26_Company#Reception
| zubiaur wrote:
| They do. I would be surprised if they don't operate in
| compartmentalized teams. I work with a company that has clients
| in competing markets. We have "conflict houses", organizations
| within the organization that compartmentalize clients, sets
| firewalls and prevents information leak between employees. I
| would be surprised if McK doesn't do anything similar.
| shkkmo wrote:
| And nothing in those practices excuses McKinsey from failing
| to disclose such possible conflicts.
| dachryn wrote:
| Indeed, the 'cool-off' time is even part of the statement of
| work, and negotiable. Its just part of the game. There are
| maybe 10 companies active in a given region/content that have
| the fame to pull off this high level of consulting (I am not
| claiming they are the only capable ones, or even that they
| are capable, just saying that the shortlist is rather ...
| short)
|
| Its known that they work for the competitors. You just want
| to handle the exposure and limit the risk of your super
| realistic super important strategy leaking 3 months before
| you make it public.
| burkaman wrote:
| > Federal procurement rules require U.S. government agencies to
| determine whether a contractor has any conflicts of interest.
| If serious enough, a conflict can disqualify the contractor
| from working on a given project. McKinsey's contracts with the
| FDA, which ProPublica obtained after filing a FOIA lawsuit,
| contained a standard provision obligating the firm to disclose
| to agency officials any possible organizational conflicts. One
| passage reads: "the Contractor agrees it shall make an
| immediate and full disclosure, in writing, to the Contracting
| Officer of any potential or actual organizational conflict of
| interest or the existence of any facts that may cause a
| reasonably prudent person to question the contractor's
| impartiality because of the appearance or existence of bias."
|
| > Over the past couple of years, for example, McKinsey's
| bankruptcy-advisory practice has paid more than $30 million to
| the Justice Department and one client's creditors to settle
| allegations that it failed to disclose potential conflicts, as
| required by the federal bankruptcy rules.
|
| I don't know how frequent it is, but when they do it to the
| government it's at least a breach of contract and possibly
| criminal: https://www.nytimes.com/2019/11/08/business/mckinsey-
| crimina...
| kevingadd wrote:
| Lack of disclosure is a serious problem
| Grustaf wrote:
| The problem here wasn't that they worked for both sides but
| that they didn't disclose it.
| tharne wrote:
| > Doesn't McKinsey frequently work for different clients in the
| same industry even?
|
| They do. It's a well-known way for companies to get inside info
| on their competitors. You can't legally/ethically hire an
| employee away from a competitor and then say, "tell us
| everything you know about company X". But, you can hire a
| McKinsey team that worked extensively for your competitor and
| say "give us a list of 'best practices' in our industry".
| spywaregorilla wrote:
| McKinsey employee here.
|
| This isn't a scandal, and is probably required by the FDA client
| contract and the pharma client contracts. It is normative. The
| FDA is fully aware that McKinsey serves pretty much every major
| pharma company in the world. Pharma companies know McKinsey is
| likely involved with federal agencies, probably including the
| FDA. The contracts formed with all organizations will clearly
| indicate that the relationship is going to remain private. A
| really important part of working with a big consulting firm is
| that you keep it internal to the team.
|
| For example, the partnership might be serving both sides of a
| vendor/procurement situation. It is a huge conflict of interest
| if these two teams talk to each other and risk leaking their
| side's position. Thus, not only are the teams allowed to talk to
| each other, they're not allowed to communicate to others that
| they're working with that client.
|
| Nothing unique to McKinsey here. That's how consulting tends to
| work.
| burkaman wrote:
| Did you read the article?
|
| > This year ProPublica submitted a Freedom of Information Act
| request to the FDA seeking records showing that McKensey had
| disclosed possible conflicts of interest to the agency's drug-
| regulation division as part of contracts spanning more than a
| decade and worth tens of millions of dollars. The agency
| responded recently that "after a diligent search of our files,
| we were unable to locate any records responsive to your
| request."
|
| > McKinsey's contracts with the FDA, which ProPublica obtained
| after filing a FOIA lawsuit, contained a standard provision
| obligating the firm to disclose to agency officials any
| possible organizational conflicts. One passage reads: "the
| Contractor agrees it shall make an immediate and full
| disclosure, in writing, to the Contracting Officer of any
| potential or actual organizational conflict of interest or the
| existence of any facts that may cause a reasonably prudent
| person to question the contractor's impartiality because of the
| appearance or existence of bias."
|
| > Over the past couple of years, for example, McKinsey's
| bankruptcy-advisory practice has paid more than $30 million to
| the Justice Department and one client's creditors to settle
| allegations that it failed to disclose potential conflicts, as
| required by the federal bankruptcy rules.
|
| There is no evidence that McKinsey disclosed their conflicts in
| this case, and plenty of evidence that they regularly fail to
| do so when working with the government, in clear breach of
| contract. If they paid $30 million to make it go away, then by
| definition it is a scandal. It is also potentially criminal:
| https://www.nytimes.com/2019/11/08/business/mckinsey-crimina...
| spywaregorilla wrote:
| IMO, these things get poured over in great detail by legal
| teams on both sides. The firm's internal controls are strong
| and are probably considered sufficient to cover those bits,
| even if the firm is serving competitors. I'm not a lawyer. I
| don't look at contracts much, but that sounds like a standard
| clause. It seems... very unlikely to me that propublica has
| found anything noteworthy here. The bottom line is that all
| clients sign agreements forbidding them or McKinsey from
| sharing knowledge of the relationship. That comes with the
| understanding that there are similar agreements with other
| companies. McKinsey cannot disclose its relationships with
| other companies. Recall that presidential candidate who got a
| ton of flack because he wasn't able to disclose what he did
| at McKinsey? It wasn't particularly sensitive, iirc. It was
| just some work with a grocery chain and some other stuff. But
| its still hard for the firm to allow sharing that information
| because everything is NDA'd to hell.
|
| Bankruptcy, as I understand it, is a different problem, that
| tends to arise when the firm is serving the company in
| bankruptcy, or one of its subsidiaries, which is problematic
| because you don't want to do anything that could benefit your
| position as a vendor for them... I think. Not particularly
| well informed, but I get the impression its a complicated
| ordeal.
| burkaman wrote:
| > McKinsey cannot disclose its relationships with other
| companies.
|
| Ok, then it can't take a job with the government. The
| contract is clear. I'm not a lawyer either, but I do read
| contracts before I sign them, and this one doesn't sound
| very complicated. You're right that it is a standard
| clause.
|
| I don't understand why you think it's unlikely that this is
| noteworthy, and I don't understand your explanation of why
| the bankruptcy case was different. I agree it might have
| been worse, hence the criminal investigation, but it sounds
| like a breach of contract in both cases, possibly even a
| breach of the exact same standard clause.
|
| > the Contractor agrees it shall make an immediate and full
| disclosure [...] of any facts that may cause a reasonably
| prudent person to question the contractor's impartiality
| because of the appearance or existence of bias.
|
| Can you genuinely say that there are no facts in this case
| that create even the appearance of bias?
| spywaregorilla wrote:
| > Can you genuinely say that there are no facts in this
| case that create even the appearance of bias?
|
| I can say with some confidence that nobody involved in
| the agreement, on either side, would be surprised by this
| article's findings. And I am assuming that there is
| sufficient nuance around the concept of "appearance of
| conflict of interest" is covered by the mutual
| understanding of the firm's internal controls. I'll bet
| that the FDA has no interest in suing McKinsey over this.
|
| I don't think your casual reading of this snippet is
| enough to understand how this works. You're welcome to
| disagree.
| burkaman wrote:
| I am involved in the agreement, because the FDA is part
| of my government. I don't want my government ignoring
| conflicts of interest with a wink because "everybody
| knows". I don't want my government ignoring contracts
| because of an unwritten "mutual understanding". Based on
| my understanding of human nature and your own posts in
| this thread about how easy it is to move between projects
| at McKinsey, I don't believe "firewalls" are effective
| and I don't want an unethical organization with an
| extremely recent national corruption scandal and blatant
| conflicts of interest working for my government's
| regulators.
| spywaregorilla wrote:
| You're missing the point. It's not "wink wink everybody
| knows". It's "we explicitly understand you're working
| with pharma companies whose interests may differ from
| ours but that these teams will be isolated and thus under
| no conflict of interest". It's not under the table.
|
| I'm not sure what you mean by how easy it is to move
| between projects. It's not. You don't just get to say
| "hey I wanna work for tesla, anybody doing a project on
| tesla?". That information is secret. But you do have the
| ability to say "I would like to work in energy, and I
| don't want to serve anyone working on oil".
|
| I'm not entirely interested in changing your mind. Just
| showing some context.
|
| edit: cannot respond to the below, but the FDA does not
| disclose all the details of its operations. I too would
| like if government entities were fully transparent. But
| that's another issue. You'll have a hard time getting ALL
| the details of every decision made with FOIA acts. And
| finally, there are consequences to breaking these
| contracts. That should be obvious.
| pfortuny wrote:
| _In writing_ being the operative term. _In writing_ , not
| just in "discussions".
| spywaregorilla wrote:
| In writing would only be the operative term if the
| discussions concluded things were a conflict of interest.
| They're not required to provide non-issues in writing.
| burkaman wrote:
| "the Contractor agrees it shall make an immediate and
| full disclosure [...] of any facts that may cause a
| reasonably prudent person to question the contractor's
| impartiality because of the appearance or existence of
| bias."
| spywaregorilla wrote:
| You can run in this circle as long as you want. If the
| FDA execs and the McKinsey execs reach a mutual
| understanding of the circumstances, including the fact
| that McKinsey is going to be simultaneously serving
| unnamed third parties with contrary interests, and that
| this is ok, then the reasonably prudent person will
| conclude that these are not factors to cause them to
| question the contractor's impartiality. It would not be
| surprising to me at all if additional language in the
| contract explicitly address this point.
| burkaman wrote:
| Explicitly understood, but not documented, not disclosed
| to the public, and no measures taken to ensure that
| McKinsey is staying honest and no personnel or
| information was shared between teams during the 12+ year
| engagement. No concern that what they got caught for in
| South Africa might not have been a one-time deal. Just
| took their word for it and kept their secrets.
| tharne wrote:
| If I see McKinsey on someone's resume, it's a huge red flag.
| Similar to "Head of marketing for children's sales at Phillip
| Morris". Sure, all companies do some bad things, but the complete
| lack of ethics required to succeed at McKinsey is next-level.
| leroy_masochist wrote:
| That's interesting. On whose behalf are you reviewing resumes?
| kevmo314 wrote:
| If you're getting their resume, maybe they didn't succeed and
| they might have ethics :)
| short_sells_poo wrote:
| I'd agree with you. Basically the way these companies work is
| that either you make partner in a specific timeframe, or you
| are encouraged to go elsewhere. Almost by definition, people
| who have a big consultancy on their resume did not make it to
| partner for one reason or another.
| elliekelly wrote:
| Part of the business model is farming out "alumni" to
| lucrative management roles at large companies (usually
| clients) with the expectation they'll turn around and
| engage the firm for even more consulting work.
| wil421 wrote:
| Most people I know who worked for the Big 4 left because
| they were treated like dogs and worked endless hours. It's
| not that they couldn't make partner it's that they didn't
| want to. This applies to both the accounting and IT
| consulting practices. A few of the accounting people have
| very successful careers that pay much more than consulting,
| including being a CFO.
|
| A lot of others left for smaller consultancies where they
| are able to have a say in the company versus being a cog in
| the wheel.
|
| I've debated going to McKinsey or the Big 4 but I'm not
| traveling Sunday-Thursday. Smaller shops pay more. Speaking
| with other consultants I've found that working with medium
| sized Software Vendors means great benefits including sweet
| RSUs and they don't travel as much.
| tharne wrote:
| That's a good a point, and something I honestly hadn't
| thought of. They could be ethical folks who got sick of the
| BS.
| DrBenCarson wrote:
| If you're interviewing a former McKinsey employee who
| didn't spend any time at Partner, there is a very good
| chance you're interviewing someone who 1. has at least as
| much distate for McKinsey as you do and 2. cannot say so
| before being hired because badmouthing employers isn't a
| great interview approach.
|
| The reason you hate McKinsey is not the people who leave,
| it's the people who don't.
| burkaman wrote:
| I've worked with a lot of former "big 3" consultants and
| they universally hated it and got out once they realized
| how toxic the culture and organization was. Remember that
| they recruit people right out of college and they're very
| good at selling themselves, as that's what they do for a
| living. People won't want to badmouth their former employer
| in an interview, but this is definitely something you
| should keep in mind.
| jollybean wrote:
| McKinsey is an interesting place, but I think this is very much
| the wrong take - and the headline is out of context.
|
| McKinsey is a conglomerate of silos, and it's entirely possible
| for McKinsey NY to be working on something that's related to
| something McKinsey Atlanta is working on - that doesn't make it
| a conflict of interest.
|
| In any more than banks advise and act for all sorts of clients
| who have related interests.
|
| There are reasons to maybe having Red Flags (or points of
| concern really) about McKinsey people but I don't think that
| this is generally it.
|
| I would hire everyone from McKinsey that I know if there were a
| role for them, and their 'integrity' wouldn't remotely be an
| issue. The issue frankly is how applicable their skills would
| be in most operational environments.
| teachrdan wrote:
| It seems that you didn't even read three paragraphs into the
| article:
|
| "At times, McKinsey consultants helped those drugmaker
| clients fend off costly FDA oversight -- even as McKinsey
| colleagues assigned to the FDA were working to bolster the
| agency's regulation of the pharmaceutical market. In one
| instance, for example, McKinsey consultants helped Purdue and
| other opioid producers push the FDA to water down a proposed
| opioid-safety program. The opioid producer ultimately
| succeeded in weakening the program, even as overdose deaths
| mounted nationwide."
|
| McKinsey was actively helping opioid manufacturers minimize
| government oversight. The misconduct in question by McKinsey
| isn't hypothetical.
| jollybean wrote:
| You've provided evidence that supports my position.
|
| Different McKinsey teams were hired by different entities
| to do different things.
|
| To the extent that those teams are not related or
| coordinating, that's understandable and not a breach of
| ethics.
|
| An Accenture division can be helping to the IRS build tax
| compliance software while another division help companies
| write tax minimization software.
|
| There are only a small number of 'Big Accounting' firms,
| and they all have overlapping interests.
|
| Banks to similarly.
|
| McKinsey, Goldman, Accenture, all the big accounting firms
| are always working with 'Big Pharma' and 'Government' at
| the same time and all of the parties know this.
|
| While we do need to be wary and cautious about backchannel
| information passing etc. - the notion that there's a breach
| of public interest as it is being presented is hyperbole.
| alistairSH wrote:
| Except US government contracts have specific language
| requiring disclosure of conflicts. That Kinsey ignores this
| language and instead pays fines indicates both that Kinsey
| lacks some morals and also that the contract process with the
| US is broken (at minimum, the fines should be higher to
| discourage this behavior).
| boh wrote:
| Not sure what "next level" means.
|
| McKinsey is a consultant. If a company asks it to figure out
| how to make the world a better, happy place, it'll consult on
| that, but they don't. McKinsey has been used as an excuse for a
| host of evil activity but it's their clients that asked them to
| advise them and the clients that execute on the suggestions.
| alistairSH wrote:
| That sounds very close to "just following orders".
|
| Enabling evil is itself evil.
|
| Whether or not McKinsey is, when taken as a whole, evil is
| debatable. But, they certainly do enough work with dictators
| and other known bad actors that we should have the debate.
| pempem wrote:
| We should have that debate about every organization.
|
| McKinsey primarily (not exclusively) works with actors who
| have the ability to pay fees, and those tend to be actors
| in power.
|
| The number of organizations whose leaders have had intimate
| dealings with saudi arabia or other nation states with
| dictators at the helm would include most of our employers.
| wgj wrote:
| It's a little bit like intent laundering, isn't it.
| boh wrote:
| Yes that's why they hire them. Often managers hire McKinsey
| to legitimize their own ideas and then use them as
| scapegoats if things go sideways. That's one of their main
| selling points.
| jacobr1 wrote:
| Even in the benign case it usually intent laundering.
| Consultants are often brought in to deal with
| organizational inability to do something that a substantial
| chunk of the employees already knows they need to do. It is
| one of the reasons they can be successful hiring people
| straight from school and putting them on big accounts. The
| basic formula for many of these jobs is to interview
| employees, figure out the way forward that the sponsoring
| exec really wanted anyway in the form a synthesis of what
| the employees suggested, add some data and pretty graphs to
| a report, and then lend the idea external credibility (and
| future blamability if it fails).
| buggythebug wrote:
| Is this anecdotal or is it well known?
| IMTDb wrote:
| Well known, based on personal experience with these folks.
|
| But most of the time, it's due to how these guys are managed
| by their client. When you bring in an individual from a top
| consulting firm, they will fight tooth and nail to get the
| results you want. Or at least not "fail" at getting those.
|
| If this means doing a great job, they will definitely do
| that. If - due to factors they can't really control - they
| need to endanger the rest of the project so that their part
| is successful, they will avoid to do it if they can. But they
| will do it if they need to. Failing is just not an option.
|
| This is the danger of hiring consultants: incentives are not
| fully aligned between you and them. You want the whole
| project to be successful - on the long run. They want their
| part to be successful - right now.
|
| If you are careful enough, these two absolutely coexist. If
| you aren't it can be dangerous for you whole organisation.
| tharne wrote:
| Anecdotal, based on personal experience with these folks
| xadhominemx wrote:
| Seems like you are a mid-level technical person, no? So I doubt
| you'd ever see the resume of McKinsey consulting staff.
| burkaman wrote:
| McKinsey has hundreds (thousands?) of software engineers and
| data scientists.
| xadhominemx wrote:
| Sure but who really cares about back office staff in this
| context
| burkaman wrote:
| I had a CS professor in college who every year would give
| a speech about a hypothetical engineer designing pipe
| fittings that are eventually used in concentration camp
| gas chambers. The point is not that if something you make
| is used for evil that makes you a bad person, but that
| you should pay attention to the broader consequences of
| your work even if it appears innocuous, and if you find
| out it's being misused, do something about it. Quit or
| complain to your boss or tell the media or alter your
| design or something.
|
| I'm sorry to jump to Nazis, I know you're not supposed to
| do that on the internet. I'd like to explicitly state
| that I don't think McKinsey employees are as bad as
| Nazis. This comment just reminded me of that very
| valuable lesson in engineering ethics.
|
| In this case it's not really relevant - engineers on
| consulting projects are not "back office staff". They're
| part of the team, on site, in meetings, making decisions.
| rkk3 wrote:
| Or you could work for IBM
|
| > https://en.wikipedia.org/wiki/IBM_and_the_Holocaust
| nwatson wrote:
| The "pipe fittings" reminds me of the first season of
| "Patriot", an Amazon Prime show whose first season was
| excellent, a spy/engineering thriller (I only watched the
| first two episodes of season two, not sure whether it's
| good or not, seemed weak by comparison).
|
| In any case, watch
| https://www.youtube.com/watch?v=P5-9Rfrui9A "'Patriot'
| Piping Lingo, The McMillan Way (Amazon Prime)", where a
| seasoned CEO / engineer talks about pipe fittings at
| length. I'm sure software/devops engineers sound just as
| obtuse to those not familiar with software.
| robocat wrote:
| That is the long running "Turbo Encabulator" trope, the
| original is here
| https://www.youtube.com/watch?v=Ac7G7xOG2Ag but there are
| some wonderful rerenditions and tributes if you search
| for those keywords on YouTube.
| ecf wrote:
| > If I see McKinsey on someone's resume, it's a huge red flag
|
| I can't wait for the day when engineers from Facebook or Google
| are treated the same way after all the harm those companies
| have caused is revealed.
| spywaregorilla wrote:
| I work for McKinsey. In my opinion, the ethical costs of
| working for Facebook are far worse. In some way, if you work
| for facebook, you are supporting the product Facebook, which
| I find unethical. If you work for McKinsey, it's a
| decentralized org. You might not like that there's a team
| serving oil or cigarette or saudi clients, but the work you
| do won't have any bearing on them. You can work on helping
| clients in spaces that you think are good to serve and refuse
| to serve clients in spaces you don't. There's an element in
| that money goes to the top, enriching partners whose work you
| may disagreement. But... eh, I would say the flow of money is
| much less interesting than the individual impacts of my work.
| Am I enabling more work to be done in oil and cigarettes? In
| my opinion, not really.
|
| It's pretty cool to be able to turn down projects because you
| disagree with them ethically. I can't say I agree with the
| other doom and gloom posts that say everyone leaving hates
| the company. I would say the average employee leaves on
| positive terms.
| bboylen wrote:
| Of course people who choose to work at McKinsey in the
| first place feel good about it. Says more about them than
| it does about McKinsey being moral
| spywaregorilla wrote:
| What if your priors aren't fully informed and asking
| questions to people with first hand experience could
| provide useful information?
| burkaman wrote:
| If you don't care about the money, couldn't you do the same
| work for an organization that doesn't work for Saudi
| Arabia? Job market is pretty good right now, and it's not
| like it's difficult to find a company that doesn't have
| seven chapters in its Wikipedia Controversies section.
| spywaregorilla wrote:
| Money is pretty good. Probably less than tech equivalent.
| When I said I don't care about the money flow I meant I
| don't care if the work ultimately enriches people whose
| ethics I don't agree with in part.
|
| Short answer is I like my job. I like the work that I do.
| I think it directly helps the world be better. I get to
| operate at a very high level working with CEOs of
| important companies. The company is genuinely interested
| in advancing my career. It's a rare mix of tech and
| business. Coworkers are pleasant. Leadership is good and
| listens to its people.
|
| The controversies don't bother me that much. the firm is
| decentralized. It bothers me about as much being
| associated with American problems. On a whole I think the
| firm helps things more than it hurts. The same
| confidentiality rules prevent us from sharing our
| successes. ymmv
| Matticus_Rex wrote:
| The organizations where you can do the same work that
| aren't McKinsey (assuming you're in the strategic
| management consulting side) tend to not be much better
| than McKinsey on that front. You could go niche, but you
| might end up making half the money (or double, or both
| depending on the year).
| ativzzz wrote:
| I work as a database engineer at FB. Do I contribute to the
| issues FB causes? not really.
|
| I work as an accountant at FB. Do I contribute to the
| issues FB causes? Not really.
|
| I work as a product manager at FB that isn't a
| "problematic" project. Do I contribute to the issues FB
| causes? Not really.
|
| Your mental gymnastics are on par for a McKinsey type
| consultant.
| RhysU wrote:
| In all cases, yes, the hypothetical employee contributes
| to FB-spread societal damage.
|
| For example, if I design a boring mechanical part for a
| bomb my labor is integral to when that bomb kills
| civilians. So, if you are in the defense industry,
| believe in the net benefits of the missions that you
| support. And likewise for FB.
|
| Claiming one is a meaningless cog in a machine, FB or
| otherwise, and one is therefore absolved of the
| responsibility of one's downstream impact is disgusting
| cowardice.
| spywaregorilla wrote:
| I don't agree though. That's my point. A database
| engineer, accountant, and PM all enable the product they
| support. That is the ultimate goal of the work.
|
| If I work on a project to help a pharma company set up
| its supply chain to produce rare disease treatments, does
| that enable some guy in Asia to work on oil projects?
| Vaguely, yes in the sense that there is more money in the
| system. But not much, and certainly far less than it does
| on building the local capability to support other pharma
| companies on similar supply chain problems.
|
| Personally I feel the direct impact of my work is
| positive, and likely orders of magnitude more positive
| than I would see working in tech for "engagement" or
| spyware or whatever. If I decide to leave, I'll go to one
| of the companies working on these same sets of problems.
|
| And on a wider spectrum, no I don't believe the firm is
| bad on a whole. I think it nets good, trending towards
| banal average.
|
| edit: putting it another way Facebook could not run (or
| would run less effectively) if it had 0 database
| engineers or PMs. McKinsey's oil division could work just
| fine if it had 0 pharma consultants. And its not that
| much of an anathema for some people to work on oil
| clients.
| MisterBastahrd wrote:
| That's an amazing amount of ethical gymnastics that one
| would expect from someone who works for McKinsey.
| rfriedman99 wrote:
| "Am I enabling more work to be done in oil and cigarettes?
| In my opinion, not really."
|
| Your opinion is not borne out by facts: it is a way of
| letting you rationalize working for an organization that is
| corrupt and corrupts other.
| colinmhayes wrote:
| On the margins this really isn't true. I know a couple
| people working on Mckinsey's renewable energy team.
| They're directly responsible for billions of dollars of
| solar and wind farm build out that likely wouldn't have
| happened to anywhere near the same extent if the
| generators hadn't brought in consultants. I also know
| someone who was on the Tyson chicken team whose job was
| to remodel the slaughterhouse so they could fire
| everyone.
|
| Mckinsey absolutely lets you choose the team you work on,
| there is zero expectation to work on teams that service
| immoral industries or companies.
| Talanes wrote:
| >there is zero expectation to work on teams that service
| immoral industries or companies.
|
| Except for management consulting, of course.
| caturopath wrote:
| I'd be surprised if McKinsey hadn't been hired by every large
| pharma company.
| robg wrote:
| First rule for conflicts of interest: Even the appearance of a
| conflict is itself a conflict.
|
| Knowing the good folks at FDA, this reality is protected against,
| but glad to have ProPublica shining a light.
| mannykannot wrote:
| While I do not doubt the integrity of the good folks at the
| FDA, it is unclear to me that they could in any way protect
| against the real conflict of interest in McKinsey telling the
| opioid makers what the folks at the FDA were thinking, doing or
| being advised to do, or giving the manufacturers advice
| predicated on that knowledge.
| chirau wrote:
| It seems everytime McKinsey is in the press it's for the wrong
| reasons.
|
| I will never forget what they did to South Africa. Fascinating
| read
|
| https://www.nytimes.com/2018/06/26/world/africa/mckinsey-sou...
| leroy_masochist wrote:
| I bet McKinsey also never told the Department of Transportation
| that it was working for both the DoT and major car manufacturers.
|
| Executives senior enough to approve hiring McKinsey to study
| something, whether they're F500 CEOs or government agency heads,
| know full well that the top consulting firms are all advising
| their competitors, counterparties, and regulators/regulatees. The
| facts reported in this article would indeed be scandalous if they
| included evidence that the FDA team at McK was tipping the pharma
| teams on private FDA plans or discussions, but that is not the
| case. If anything, this case is merely illustrative of why major
| consulting firms have borderline-paranoid cultural norms around
| never discussing client work outside of the respective client
| team, even (and especially) to one's own colleagues at the firm
| who are not staffed on said team.
| burkaman wrote:
| Did anybody here read the article? I don't want to keep pasting
| the same quotes on every comment, but McKinsey just paid $30
| million to settle a case where they did the exact same thing to
| the Department of Justice. Why would they do that if this is
| normal and nobody cares? The contract language is very clear:
| they have to disclose potential conflicts (even if "everybody
| already knows"), and they didn't.
| throwaway0a5e wrote:
| >but McKinsey just paid $30 million to settle a case where
| they did the exact same thing to the Department of Justice.
| Why would they do that if this is normal and nobody cares?
|
| Yes and?
|
| This is normal. Nobody cares as long as you do it right. Just
| because the desk that deals with DOJ did it wrong doesn't
| mean the desk that deals with FDA did. You see these kinds of
| complicated, seemingly conflicting, relationships in high
| finance all the time. In practice it's a non-issue because of
| how these companies are structured and because they try to
| keep clients at arms length as a matter of routine business.
| The business relationship here is very similar to one that
| AWS and Azure may have with a 3rd party datacenter
| contractor. Sure one could pay the contractor for tips but in
| practice that doesn't happen except very rarely because of
| how everything is structured.
| burkaman wrote:
| > Just because the desk that deals with DOJ did it wrong
| doesn't mean the desk that deals with FDA did.
|
| But...they did. They didn't disclose their conflicts,
| unless the FDA is lying for some inexplicable reason.
| Again, it's in the article, it's not that long.
|
| > You see these kinds of complicated, seemingly
| conflicting, relationships in high finance all the time.
|
| You sure do.
|
| > it's a non-issue because of how these companies are
| structured
|
| These companies are structured to make money by any means
| necessary. Just a few years ago McKinsey corrupted
| government officials and used them to get contracts with
| utilities and infrastructure providers. Was there a
| firewall between the government desk and the utilities
| desk?
| notyourday wrote:
| These as fines are too small. It is just a cost of doing
| business. The fines should be _devastating_ so getting 5-6 of
| such fines should be a death penalty for the company
| jacobr1 wrote:
| The fines aren't big enough to change their business, but
| they are quite possibly big enough to change their
| _proceedures_. I can easily imagine there becomes more
| stringent internal rules and processes on disclosures, even
| if they keep doing business the same way in general.
|
| If we are talking about fines that could cause the firm to
| go out of business, we need evidence of actual abuse of
| position. I'm not sure failure to disclose, by itself, is a
| sufficient transgression. On the other hand, it seems that
| it might be fair to penalize firm their fee on the
| contract, or a meaningful portion of it, on the basis of
| breach of contract. I'm not sure if that would be higher or
| lower than the current penalty.
| eesmith wrote:
| And staff should go to jail.
| twobitshifter wrote:
| Mckinsey is paying 600 million to states which is 10-20% of
| yearly profits.
|
| https://www.forbes.com/sites/r
| obertzafft/2021/02/07/mckinseys-573-million-absolution--
| value-for-money--but-for-whom/?sh=517a72c56429
| nawgz wrote:
| Yes, which is his point, 10-20% of yearly profits is a
| literal cost of doing business, and not a particularly
| damaging one. Most companies would gladly trade 20%
| profit in order to control information from every side of
| their industry...
| danso wrote:
| Sure, but the requirement for disclosure seems pretty
| straightforward:
|
| > _. McKinsey's contracts with the FDA, which ProPublica
| obtained after filing a FOIA lawsuit, contained a standard
| provision obligating the firm to disclose to agency officials
| any possible organizational conflicts. One passage reads: "the
| Contractor agrees it shall make an immediate and full
| disclosure, in writing, to the Contracting Officer of any
| potential or actual organizational conflict of interest or the
| existence of any facts that may cause a reasonably prudent
| person to question the contractor's impartiality because of the
| appearance or existence of bias."_
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