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News February 24, 2023

David Hutton warns parliamentary committee of dangers of weak protection for whistleblowers

CFE Senior Fellow David Hutton testified before the House of Commons Standing Committee on Government Operations and Estimates (OGGO) on February 13 in connection with its study of Federal Government contracts awarded to McKinsey and Company.

The trigger for the study was the massive, exponential increase over the past few years in the dollar amount of government contracts awarded to McKinsey, the largest management consulting firm in the world in terms both of number of employees and revenue.

In his testimony, Hutton noted that McKinsey leverages its prestigious 'top dog' reputation to secure contracts with senior decision-makers at very high fee rates, often with little due diligence. “Some of McKinsey's engagements have been serious failures, causing reputational and financial harm, and even loss of life,” said Hutton.

He indicated that there is considerable scope for things to go wrong in consulting engagements even when everyone involved is honest and playing by the rules, but, because of Canada’s ineffective whistleblower protection laws, governments and the public often are not alerted to the problems until it is too late.

 “Our ineffective whistleblower protection laws also hamper the work of all oversight bodies including the OGGO committee,” said Hutton.

He added that without ready access to the knowledge of front-line employees, governments can never fully know and understand what is going on.

Members of the committee questioned whether the Canadian government should be contracting with a firm that has a history of ethically dubious engagements, such as McKinsey’s development of Purdue's "Wildfire" strategy for marketing Oxycontin, which contributed to the opioid crisis and led to McKinsey paying $600 million (US) in settlements to over 50 US states and territories.

A recording of the OGGO hearing can be viewed here.