PARIS (AP) — As French President Emmanuel Macron prepares to hold his first major rally in his re-election race on Saturday, his campaign has taken a hit.
It was dubbed the “McKinsey affair,” named after an American consulting firm hired to advise the French government on its COVID-19 vaccination campaign and other policies. A new report from the French Senate questions the government’s use of private consultants and accuses McKinsey of tax evasion. The problem is mobilizing Macron’s rivals and stalking him at campaign stops ahead of the April 10 first round vote.
His supporters hope he can boost his campaign and drown out his critics at Saturday’s rally in a huge arena west of Paris. Macron, a centrist who has spearheaded diplomatic efforts to end the war in Ukraine, has held a comfortable lead over far-right leader Marine Le Pen and other challengers in polls so far.
But the word “McKinsey” is becoming a rallying cry for those trying to overthrow him. Critics describe the government spending of one billion euros for consulting firms like McKinsey last year as a kind of privatization and Americanization of French politics and call for more transparency.
The French Senate, in which the opposition Conservatives hold a majority, released a report last month examining the government’s use of private consultancies. The report found that government spending on such contracts has doubled over the past three years, despite mixed results, and warned that this could create conflicts of interest. Dozens of private companies are involved in the consulting activities, including giants such as Irish-based multinational Accenture and French group Capgemini.
Most damningly, the report states that since at least 2011, McKinsey has stopped paying corporate income taxes in France, instead using a system of “tax optimization” by its Delaware-based parent company.
McKinsey issued a statement saying it “respects the French tax rules that apply to it” and defended its work in France, but didn’t elaborate.
McKinsey notably advised the French government on its COVID vaccination campaign, which started hesitantly but eventually grew into one of the most comprehensive in the world. External advisers have also advised Macron’s government on housing reform, asylum policy and other measures.
The Senate report found that such companies generate lower revenues in France than in the UK or Germany, and found that spending on outside consultants was higher under conservative former President Nicolas Sarkozy than under Macron.
Budget Secretary Olivier Dussopt said state money spent on McKinsey was about 0.3% of what the government spent on public sector salaries last year, and that McKinsey earned a tiny fraction of that. He accused campaign competitors of inflating the affair to improve their own ratings.
“We have nothing to hide,” said Amelie Montchalin, the government’s civil services secretary.
The affair still hurts Macron.
Macron, a former investment banker who was once accused of being “president of the rich,” saw his ratings surge as his government spent heavily to protect workers and businesses early in the pandemic, promising to do “whatever it takes.” to do to cushion the blow. But his rivals say the McKinsey affair is reviving concerns that Macron and his government are beholden to private interests and out of touch with the concerns of ordinary voters.
Everywhere Macron goes now, he’s being asked about it.
“The campaign should be about purchasing power, solving security problems and ending the war (in Ukraine),” he told voters on Thursday. “Don’t make it the wrong topic.”
In a talk show last Sunday he said defensively: “If there is evidence of manipulation, let them go to court.”
A woman who lost her father to COVID-19 filed a lawsuit on Friday accusing McKinsey and other consulting firms of misusing public funds when they were tasked with asking the government over mask and vaccine supplies advise. Julie Grasset now runs a support group for people who have lost loved ones during the pandemic.
“It’s a serious problem. We’re talking about public health,” Grasset told The Associated Press.
The finance prosecutor’s office did not comment. It could be weeks before prosecutors decide whether to take up the case, one of several Grasset and others affecting the government’s handling of the pandemic.