McKinsey’s French headquarters raided as part of a tax evasion laundering investigation

by time news
McKinsey’s French headquarters raided as part of a tax evasion laundering investigation
Four police officers leave the premises of the McKinsey firm, in Paris, Tuesday, May 24, 2022.

A search was underway, Tuesday, May 24 in the afternoon, at the French headquarters of the consulting firm McKinsey located on the Champs-Elysées in Paris, learned Agence France-Presse (AFP), from the National Financial Prosecutor’s Office (PNF). AFP journalists had noted, Tuesday in the middle of the day, the presence of police officers with customs armbands at the reception of McKinsey’s headquarters.

This search is part of the preliminary investigation opened on March 31 for aggravated money laundering of aggravated tax evasion, confirmed the PNF, requested by AFP. The PNF opened this investigation following the report of the Senate inquiry committee on the influence of private consulting firms on public policy, during Emmanuel Macron’s first five-year term.

In the afternoon, the company confirmed “the holding of visit operations (…) during which all the required information has been provided”. “The firm cooperates fully with the public authorities”McKinsey said reaffirming “that the firm respects the French tax and social rules applicable to it”.

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A record amount of contracts with consulting firms

The French entities of the McKinsey firm were accused in a senatorial report published in mid-March of having put in place a tax arrangement allowing them to pay no corporate tax between 2011 and 2020. McKinsey defended itself by claiming to respect French tax rules, specifying that one of its subsidiaries had paid corporation tax for six years over the period mentioned by the Senate.

The latter had noted the growing influence of the cabinet and more generally of consulting firms in the state apparatus. In this report submitted on March 16, this commission assured that the contracts signed between the State and several consulting firms had “more than doubled” between 2018 and 2021, reaching a record amount of more than one billion euros in 2021. A “sprawling phenomenon” which, according to the senators, runs the risk of private consultants gradually taking precedence over civil servants of the administration.

The government’s use of this American cabinet to support the executive in the policy of vaccination against Covid-19 had already sparked controversy in January 2021, in addition to that of the end of the presidential campaign. Olivier Dussopt and Amélie de Montchalin, then ministers of public accounts and the civil service, had even led a press conference on March 30 to justify the expenditure of the State.

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“Let it go to the criminal”

The revelations of the commission of inquiry had sparked heated controversy during the presidential campaign over the use of public funds. The opposition had repeatedly called for the opening of an investigation into what it considers to be favoritism which the Macronist majority would show for the benefit of this consulting firm.

Then candidate, Emmanuel Macron had estimated that the non-payment of corporate tax by McKinsey was explained by the tax rules in force. “If there is evidence of manipulation, let it go to the criminal court”he had declared, on March 27, to those who reproached him for these numerous contracts.

The Head of State has maintained close ties with several leaders of the cabinet, some of whom participated in his campaign in a personal capacity in 2017. Among them, the head of the cabinet’s public service department, Karim Tadjeddine, is in turmoil since his hearing before the Senate Committee on January 18: he had affirmed under oath that McKinsey was indeed subject to corporation tax – which led the Senate to take legal action on March 25 on suspicion of perjury.

The PNF investigation was finally launched on March 31, after an internal assessment of the file, which consisted of carrying out initial cross-checks and verifications on the nature of the revelations in the Senate report. It was entrusted to the judicial finance investigation service, the tax police created in 2019 in Bercy.

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The World with AFP

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