McKinsey’s reputation has taken a beating over the past year, largely thanks to a flurry of New York Times’ stories detailing the secretive consulting giant’s work with authoritarian governments, while exposing conflicts of interest involving the firm’s bankruptcy business and its internal hedge fund (the former led to a wrist-slap fine from the DoJ).
Unwilling to countenance another PR hit, McKinsey has apparently tried to head off more questions about the firm’s commitment to ethical business practices by announcing that it has cut ties with Purdue Pharma and all other businesses involved in the sale of opioid pain pills.
The fact that McKinsey and other consulting firms haven’t faced more of a backlash for their work with opioid makers is, frankly, surprising, as details from the Massachusetts AG’s lawsuit against Purdue would suggest: During Mckinsey’s decade-long relationship with Purdue, the consulting firm helped the OxyContin maker boost sales and circumvent government efforts to tighten restrictions.
According to Bloomberg, which quoted from the Massachusetts lawsuit, McKinsey even formulated a pitch that it said would help Purdue “turbocharge” sales.
But McKinsey isn’t the only big firm cutting ties with Purdue this week. JP Morgan, which was among the banks that treid to ‘limit’ ties to gun-makers and sellers after the Parkland shooting, has told Purdue that it will need to do its banking somewhere else.
JPM’s decision makes it “the most high-profile corporation known to have distanced itself from Purdue and its wealthy owners, the Sackler family,” Reuters said. JPM reportedly informed Purdue back in March that it had six months to find another bank. It has reportedly tapped Dallas-based regional bank Comerica to handle its financial transactions. JPM reportedly told Purdue that its decision was motivated by ‘reputational risks’. Though it never lent money to Purdue, JPM’s commercial bank manged the company’s cash and bill payments.
Many museums and nonprofits have already cut ties with the Sacklers, who were known for their philanthropy.
Unfortunately for Purdue (and maybe for McKinsey given its bankruptcy business), cultivating new banking relationships might not be a problem in the very near future: The company is reportedly considering filing for bankruptcy to avoid payouts in the roughly 2,000 lawsuits accusing it of misleading doctors and patients about the addictive qualities of OxyContin. The company and its owners, the Sackler family, have already reached a nearly $300 million settlement with the state of Oklahoma.
via ZeroHedge News http://bit.ly/2K4o2bF Tyler Durden