Tue. Jul 5th, 2022

Financial prosecutors in France have opened a preliminary investigation into allegations raised in a Senate inquiry into the government’s use of private consulting firms.

The prosecutors’ office did not name the targets of the inquiry, which follows a Senate report published on March 16 that criticized “the influence of consultancies” on the state and called their use both “broad and opaque”. Central government ministries alone spent € 893.9mn on them in 2021, more than double the amount in 2018, according to the report.

The probe represents a setback for Emmanuel Macron, France’s president, only days before he goes before voters to seek re-election in first-round voting on Sunday. Polls show that he looks set to make the run-off, but his lead over far-right candidate Marine Le Pen, now in second place, has narrowed to within the margin of error in some polls.

His political rivals have seized on the issue to criticize Macron’s government for spending too much on consultancies when France already has a large public sector staffed with career civil servants.

McKinsey, which has advised the French government on the Covid-19 vaccine rollout, technology projects and education, has come in for particular focus, although it is only one of many firms which work for the state.

The controversy surrounding McKinsey deepened on March 25 when the Senate alleged in a statement that it had not paid corporate tax in France for at least the past 10 years.

The company has denied wrongdoing and said it respects the applicable tax and social security rules. It said it had paid more than € 422mn in tax and social charges related to its employees in France from 2011 to 2020, or roughly one-fifth of its sales in the period.

“If it is asked, McKinsey will make itself available to the administration and relevant authorities,” it said on Wednesday.

Macron, a former investment banker, has sought to defuse the controversy for more than a week, initially sending out his ministers to argue that the use of consultancies was “widely spread and in the great majority of useful cases” and that France did not rely on them more than other European countries.

He later said there was nothing improper about the use of outside advisers, adding that his government had advocated for reform of the international tax system for years to limit tax optimization techniques. “If there’s abuse, on a case-by-case basis, then it must be punished,” he said on France Inter radio.

Macron’s presidential rivals have sought to use what they call the scandal McKinsey to paint the president as a technocrat in thrall to international consultants so as to remind voters of how the former Rothschild employee has ruled as the “president of the rich”.

“Macron appears to be a head of state that has no confidence in the state or the civil servants who work for it,” Le Pen said at a rally at the weekend in eastern France “Who’s really running this country?”

Separately, a police investigation into the death of a young Jewish man named Jérémy Cohen has also become a campaign issue after his family asked far-right candidate Eric Zemmour to call public attention to the incident in February in which he was killed by a tram. They say that attackers chased Cohen to his death in Bobigny because he was Jewish.

Le Pen, Zemmour and conservative candidate Valérie Pécresse have in recent days used the Cohen case to criticize Macron’s record on crime.

Additional reporting by Victor Mallet in Paris

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