5 ms·

It's technically not a conflict of interest, as long as the revenue streams roll through different offices or partners. /s Or as McKinsey puts it > "across mo

by htrp 5y ago

It's technically not a conflict of interest, as long as the revenue streams roll through different offices or partners. /s Or as McKinsey puts it > "across more than a decade of service to the FDA, we have been fully transparent that we serve pharmaceutical and medical device companies. McKinsey’s work with the FDA helped improve the agency’s effectiveness through organizational, resourcing, business process, operational, digital, and technology improvements. To achieve its mission, the government regularly seeks support from additional experts who understand both the government’s mission and the industries’ practices. We take seriously our commitment to avoid conflicts and to serve the best interests of the FDA." In practice, just another example of questionable behaviour from McKinsey

shkkmo 5y ago
> “the Contractor agrees it shall make an immediate and full disclosure, in writing, to the Contracting Officer of any potential or actual organizational conflict of interest or the existence of any facts that may cause a reasonably prudent person to question the contractor’s impartiality because of the appearance or existence of bias.” So "it should have been obvious" or "technically it wasn't a real conflict of interest" is really not a defense here.
- cycomanic 5y ago
  > > “the Contractor agrees it shall make an immediate and full disclosure, in writing, to the Contracting Officer of any potential or actual organizational conflict of interest or the existence of any facts that may cause a reasonably prudent person to question the contractor’s impartiality because of the appearance or existence of bias.” > So "it should have been obvious" or "technically it wasn't a real conflict of interest" is really not a defense here. Exactly the key sentence that many people overlook is: "actual organizational conflict of interest or the existence of any facts that may cause a reasonably prudent person to question the contractor’s impartiality" Like i said above it's not if you think you can be impartial it's if others might think you might not be impartial, in other words if they perceive that you could have a conflict of interest.
cde-v 5y ago
Exactly, just like there was no conflict between the consulting and accounting arms of Arthur Andersen.
refurb 5y ago
This isn't a very fair take. Investment banks do the same. How many companies ask Goldman to help with their IPO? How many are competitors? Plenty. The company has firewalls to separate different work products and have way more to lose by violating company confidentiality than by leveraging it.
- briffle 5y ago
  I'm pretty sure Goldman discloses that, and the probably exlains/demonstrates to the client their controls to enusre the areas stay seperate. Not disclosing it is at least a bit sketchy.
- burkaman 5y ago
  Does Goldman sign contracts promising to disclose all potential conflicts of interest when they help with an IPO? Does Goldman have a history of violating those contracts and paying $30 million to settle the case? Does Goldman have a very recent documented history of corrupting government officials and leveraging them to make money? I guess it wouldn't surprise me, but all those things are definitely true of McKinsey.
- throwawaycities 5y ago
  Your example is an investment bank that was caught and fined for advising clients to buy toxic assets during the 2008 housing bubble, while it simultaneously unloaded the same assets. Of course they too publicly claimed that wasn’t a conflict or even evidence of a conflict, but then the communications were leaked showing Goldman employees knew the assets were toxic and the company needed to push on them on customers to keep the price up while the bank liquidated its own positions.
- htrp 5y ago
  Consulting is more about long-term multi-year projects to shape things like policy (for regulators) or strategy (for companies). IPOs are very transactional by nature. The walls you speak of are usually between the trading side and the capital markets side of the firm, where there is very little overlap. In this case though, I would wager people who worked on the regulatory side were constantly being restaffed onto the pharmaceutical side and vice versa.
cm2187 5y ago
Though it would be naive on the side of the FDA to assume McKinsey didn’t advise some pharma companies. The list of Fortune 500 companies they don’t advise is probably shorter than the one they advise. That doesn’t excuse bad disclosure if it is the case, but it is hard to argue the FDA would have done anything differently.
pacija 5y ago
[flagged]
akudha 5y ago
There is this TV show called Goliath, on Amazon. In the latest season, a drug company gives work to many attorneys, with the sole aim of preventing them from being on the opposite side later on. I had no idea this was a thing. Companies do all kinds of shady shit to go around the law. They will push and stretch laws to the max, if there is profit to be made.

by htrp 5y ago

shkkmo 5y ago

> “the Contractor agrees it shall make an immediate and full disclosure, in writing, to the Contracting Officer of any potential or actual organizational conflict of interest or the existence of any facts that may cause a reasonably prudent person to question the contractor’s impartiality because of the appearance or existence of bias.” So "it should have been obvious" or "technically it wasn't a real conflict of interest" is really not a defense here.

cycomanic 5y ago
> > “the Contractor agrees it shall make an immediate and full disclosure, in writing, to the Contracting Officer of any potential or actual organizational conflict of interest or the existence of any facts that may cause a reasonably prudent person to question the contractor’s impartiality because of the appearance or existence of bias.” > So "it should have been obvious" or "technically it wasn't a real conflict of interest" is really not a defense here. Exactly the key sentence that many people overlook is: "actual organizational conflict of interest or the existence of any facts that may cause a reasonably prudent person to question the contractor’s impartiality" Like i said above it's not if you think you can be impartial it's if others might think you might not be impartial, in other words if they perceive that you could have a conflict of interest.

cde-v 5y ago

Exactly, just like there was no conflict between the consulting and accounting arms of Arthur Andersen.

refurb 5y ago

This isn't a very fair take. Investment banks do the same. How many companies ask Goldman to help with their IPO? How many are competitors? Plenty. The company has firewalls to separate different work products and have way more to lose by violating company confidentiality than by leveraging it.

briffle 5y ago
I'm pretty sure Goldman discloses that, and the probably exlains/demonstrates to the client their controls to enusre the areas stay seperate. Not disclosing it is at least a bit sketchy.
burkaman 5y ago
Does Goldman sign contracts promising to disclose all potential conflicts of interest when they help with an IPO? Does Goldman have a history of violating those contracts and paying $30 million to settle the case? Does Goldman have a very recent documented history of corrupting government officials and leveraging them to make money? I guess it wouldn't surprise me, but all those things are definitely true of McKinsey.
throwawaycities 5y ago
Your example is an investment bank that was caught and fined for advising clients to buy toxic assets during the 2008 housing bubble, while it simultaneously unloaded the same assets. Of course they too publicly claimed that wasn’t a conflict or even evidence of a conflict, but then the communications were leaked showing Goldman employees knew the assets were toxic and the company needed to push on them on customers to keep the price up while the bank liquidated its own positions.
htrp 5y ago
Consulting is more about long-term multi-year projects to shape things like policy (for regulators) or strategy (for companies). IPOs are very transactional by nature. The walls you speak of are usually between the trading side and the capital markets side of the firm, where there is very little overlap. In this case though, I would wager people who worked on the regulatory side were constantly being restaffed onto the pharmaceutical side and vice versa.

cm2187 5y ago

Though it would be naive on the side of the FDA to assume McKinsey didn’t advise some pharma companies. The list of Fortune 500 companies they don’t advise is probably shorter than the one they advise. That doesn’t excuse bad disclosure if it is the case, but it is hard to argue the FDA would have done anything differently.

pacija 5y ago

[flagged]

akudha 5y ago

There is this TV show called Goliath, on Amazon. In the latest season, a drug company gives work to many attorneys, with the sole aim of preventing them from being on the opposite side later on. I had no idea this was a thing. Companies do all kinds of shady shit to go around the law. They will push and stretch laws to the max, if there is profit to be made.