[HN Gopher] McKinsey unit will pay $123M to settle claims it bri...
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McKinsey unit will pay $123M to settle claims it bribed South
African officials
Author : donsupreme
Score : 85 points
Date : 2024-12-05 20:24 UTC (2 hours ago)
(HTM) web link (www.cnbc.com)
(TXT) w3m dump (www.cnbc.com)
| sharpshadow wrote:
| Amazing the punishment is a bribe itself.
| therobot24 wrote:
| payment isn't bad, just need to make sure everyone gets their
| cut
| some_random wrote:
| Do you genuinely believe that fines are the same as bribes?
| languagehacker wrote:
| "McKinsey is a very different firm today than when these matters
| first took place"
|
| No they are most certainly not. Corruption is in McKinsey's DNA.
| Outside of the specific harms that McKinsey has caused across the
| country and across the world, management consulting groups in
| general have been utilized to sidestep legal protections against
| corporations within a shared industry colluding against each
| other. Companies like McKinsey, Bain, Accenture, etc., have been
| instrumental in the rapid increase of executive compensation,
| flat comp for workers compared to inflation, intentionally unsafe
| practices and corner-cutting to save money, and just generally
| creating as many negative externalities as possible in the name
| of feeding the beast that Milton Friedman created with his
| rhetoric about the primacy of the shareholder.
|
| A good read on this topic is "When McKinsey Comes to Town" by
| Forsyth and Bogdanich. There's a whole chapter dedicated to the
| South African bribery scandal. Sagar was not just a bad apple --
| the company itself is the rot.
| awanderingmind wrote:
| Thank you for this, I agree.
| vundercind wrote:
| Yuuuup. They launder both corporate espionage and collusion as
| "best practices" (where'd they learn those? Your company! And
| your competitors!)
| alexashka wrote:
| This.
|
| More broadly, anyone that claims you can improve _anything_ by
| sending randoms who read some books to companies and 'consult'
| there is selling you a fantasy.
| asdff wrote:
| Part of that is the side effect that the companies themselves
| are not giving their own employees time to actually pause
| from the slog in the trenches for a second and you know, read
| the book themselves. Instead book readers are brought in to
| consult on operations.
| StableAlkyne wrote:
| There is some value in that they can ignore whatever dumb red
| tape exists at your company.
|
| Also politically harder for middle managers to just ignore
| what the expensive consultants are suggesting
| moshegramovsky wrote:
| Am I correct in remembering that they had some kind of
| involvement in the Purdue Pharmaceutical debacle? It seems like
| you are exactly right: McKinsey is not really a good company.
| mateus1 wrote:
| They weren't just involved. They were the brains behind some
| evil moves such as giving bonuses per opioid OD rates and
| bribing the best pill pushing doctors with bribes disguised
| as speaker fees.
| awanderingmind wrote:
| As a South African, this is good news (it would have been nice if
| the payment was higher and more people at McKinsey were held
| accountable). Unfortunately we are unlikely to see accountability
| locally for whoever actually paid this bribe. The background is
| that this was part of the program of State Capture enabled by our
| former president (Jacob Zuma) and a very dubious family from
| India: https://en.wikipedia.org/wiki/Gupta_family. Our country
| was basically sold to the highest bidder - people speak of 'ten
| lost years'.
| fallingknife wrote:
| Why is the US DOJ wasting time and money enforcing other
| countries laws for them? They broke the law in South Africa. Let
| South Africa handle it.
| OnlineGladiator wrote:
| Because they also broke the law in the US.
| vkou wrote:
| Because US companies bribing foreign officials is anti-
| competitive against US companies which don't.
| mountainb wrote:
| https://www.justice.gov/criminal/criminal-fraud/foreign-corr...
| ClumsyPilot wrote:
| In that case will USA honour guilty verdict of a foreign court
| and extradite bosses of McKenzey or you propose we just shelter
| criminals?
| bdangubic wrote:
| this comment would only makes sense if all US companies were
| strictly forbidden from doing any business of any kind outside
| the country's borders...
| vundercind wrote:
| Bribing foreign officials is illegal _in the US_. It prevents
| our country from becoming a haven and hot-spot for activity
| that harms the rule of law overseas and destabilizes foreign
| states, because we generally prefer that other countries _not_
| worry about that when setting their trade policies with us.
| paulddraper wrote:
| US law prohibits this behavior.
|
| This is because the US wants other countries to confidently
| allow free trade or event privileged relations with it.
| blackhawkC17 wrote:
| Of course, the company of concern is Eskom, the underperforming
| state electricity monopoly whose incompetence has dragged the
| South African economy down.
| swifthesitation wrote:
| When the settlement cost is just the price of doing business...
| you know they made many times more than the fine.
| pluc wrote:
| It's a fee not a fine
| paulddraper wrote:
| You think they made more than $123M profit from this??
|
| HN numbers are wild.
| echoangle wrote:
| That's not strictly necessary for the claim. You have to
| factor in the odds of getting caught. If you do this and only
| get caught 10% of the time, you can make slightly less than
| 1/10 of the fine per case and still make money.
| paulddraper wrote:
| Fair.
|
| Speeding isn't worth a $100 fine.
|
| But if you only get caught 1/100 times you speed...
| RandallBrown wrote:
| The article says they made approximately 85 million from
| this. Since it happened 10 years ago, they may very well have
| made money on this deal.
| yieldcrv wrote:
| Foreign Corrupt Practices Act is a Domestic Corrupt Practices Act
| sitkack wrote:
| Money shouldn't an allowed remedy for bribery.
|
| I think community service by the c-suite, at $10/hr should
| suffice.
| moshegramovsky wrote:
| Bribery. So someone's going to jail?
| Aeolun wrote:
| McKinsey pays a bribe to settle claims it bribed in the past.
|
| Very convincing.
| some_random wrote:
| A fine levied by a sovereign nation is different from under the
| table bribes to government officials.
| blindriver wrote:
| No jail for anyone of importance as usual.
| WangComputers wrote:
| It's impossible to do business in Africa without bribing people,
| all these laws do is put Western companies at a tremendous
| disadvantage compared to Chinese ones.
| mmooss wrote:
| How do we justify deregulation with situations like McKinsey,
| Boeing, FTX, Silicon Valley monopolies, etc.? It doesn't make
| sense to me that people who want competitive, safe markets and
| consumer protection don't use these endless examples.
| Beijinger wrote:
| AFAIK Ursula von der Leyen was minister of defense, she funneled
| gov consulting contract to McKinsey without an obligatory bidding
| process. Even some public employees were shocked by her
| behaviors. Worse, her son works for McKinsey.
|
| In the end, who cares?
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