French government says ‘nothing to hide’ in hiring of McKinsey

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© Reuters. FILE PHOTO: French Junior Minister of Public Action and Accounts Olivier Dussopt attends a news conference to present French government 2022 budget at the Bercy Finance Ministry in Paris, France, September 22, 2021. REUTERS/Gonzalo Fuentes
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PARIS (Reuters) – The French government on Wednesday said it had “nothing to hide” regarding its use of private consultants including U.S.-based McKinsey & Co, which has come under increased scrutiny in the country.

The government’s use of private consultants has emerged as a surprise issue in the presidential campaign less than a fortnight before the election, as rivals accuse French President Emmanuel Macron’s administration of lavishly spending taxpayers’ money on international firms that pay little or no taxes in the country.

“We have nothing to hide”, Budget Minister Olivier Dussopt told a news conference in Paris on Wednesday, adding that “no consultancy has ever taken any decision on reforms” because the state would always retain the last word.

Although the use of consultants by governments is common in many other countries, French voters view the practice with suspicion as private-sector interference.

According to a French Senate report last week, French ministries have more than doubled spending on outside consultants from 379 million euros ($417 million) in 2018 to 894 million euros last year.

Last week, the French Senate, which is dominated by the conservatives, said it was launching legal action against McKinsey, suspecting an executive of giving false testimony when he told senators the company was paying corporate taxes in France.

Far-right pundit Marine Le Pen, who in polls is Macron’s main competitor for the top job, called the controversy about McKinsey a “scandal”.

“McKinsey’s behaviour is very similar to Emmanuel Macron’s programme in the presidential election: it is totally empty, it does not solve any problems but it costs the French people a lot of money”, said Le Pen earlier this month https://www.facebook.com/MarineLePen/posts/512533296908245.

McKinsey said its French arm had paid 422 million euros ($465 million) in taxes and social charges from 2011 to 2020, without specifying whether that included corporate taxes.

Dussopt said on Wednesday that payments to McKinsey last year made up 5% of all state spending on consultancies.

French Finance Minister Bruno Le Maire earlier told Europe 1 radio that his ministry had launched a special tax audit of McKinsey before the Senate report was published, adding that the controversy around McKinsey was mainly aimed at “destabilising” Macron.

The first election round in France, the euro-zone’s second-biggest economy, will be held on April 10 followed by parliamentary elections later this year.