McKinsey & Co. worked with Russian weapons maker even as it advised Pentagon

The consulting giant had previously come under scrutiny for its work with state-owned companies in China and with opioid manufacturers.

Russia has fired more than 2,000 missiles on Ukraine since invading in February. The engines for many of these missiles were manufactured by a massive state-owned enterprise called Rostec, and executives for that company hired the global consulting giant McKinsey & Co. in recent years for advice. 

At the same time McKinsey was advising the Russian defense conglomerate, though not on any work directly involving weapons, the firm was carrying out sensitive national security contracts for the Defense Department and the U.S. intelligence community, according to an NBC News investigation.

McKinsey has come under scrutiny in Congress for its work with state-owned companies in China, with lawmakers questioning if the company should be awarded national security-related contracts given its extensive presence in China. McKinsey also faces accusations of ignoring possible conflicts of interest when it advised both opioid manufacturers and officials regulating opioids at the U.S. Food and Drug Administration.

By carrying out consulting work with a company like Rostec, McKinsey placed itself in a potentially risky position, given its work with the U.S. government, according to Scott Blacklin, a former head of the U.S. Chamber of Commerce in Russia and president of the consultancy Blacklin and Associates.

“It’s really hard to understand how an American consulting firm ... would want to be involved in sensitive areas of the Russian defense or intelligence or scientific establishment. And when you talk about Rostec, you’re talking about all of those mixtures,” Blacklin said.

Sen. Maggie Hassan, D-N.H., told NBC News that McKinsey has displayed a “pattern of behavior” in its consulting abroad and in Washington that raised “grave concerns about conflicts of interest.”

“Whether it be the substance misuse crisis or work for state-owned enterprises in places like Russia and China, I am deeply concerned by McKinsey’s choices and by the fact that the U.S. government continues to contract with McKinsey despite those potential conflicts,” the senator said.

But the company, which has its headquarters in New York, says it does not see its recent work in Russia as posing a conflict with its consulting for the Pentagon and other federal agencies. When asked by NBC News, a company spokesperson, Neil Grace, said McKinsey has strict rules and firewalls to safeguard against conflicts of interest, and that its work abroad is walled off from its work in Washington.

“As we have stated previously, McKinsey complies with all applicable U.S. contracting laws, including those regarding conflicts of interest,” Grace said. “When we serve the U.S. government, we do so through a separate legal entity with separate operational structures and separate information technology where required.”

As for McKinsey’s consulting for Rostec, Grace said, “Our past work for Rostec subsidiaries did not concern weapons systems. This work concerned core commercial and operational topics of the sort that we routinely advise our clients on all over the world.”

“For example, our work for one subsidiary concerned buses used in public transit systems,” said Grace. “It would not be fair or accurate to describe this work as benefiting the Russian military.”

McKinsey also provided research on the global helicopter market and advice on a project related to an engine for commercial aircraft, he said.

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