Governor Laura Kelly decried the use of no-bid contracts earlier this year, but now her administration won’t answer questions about an $860,000 contract awarded to McKinsey & Company.  The consultancy firm was hired by the Department of Commerce to develop strategies to accelerate economic growth in Kansas.  The Sentinel asked Commerce for information about the deal, but so far, they are not responding.

Questions asked by The Sentinel include:

  • Was there a competitive bid process for the consulting contract that went to McKinsey?
  • If so, please provide copies of their proposals and your rationale for selecting McKinsey.
  • Who are the members of the steering committee mentioned in the press release?
  • The contract says a great deal of information on state and local incentives will be provided to consultants.  Will you also provide that information to the public?
  • Are you concerned that McKinsey’s connection to authoritarian international regimes is counter-productive to Kansas values?

The Sentinel has submitted an Open Records request to force the Kelly administration to respond.

In 2018 the New York Times wrote multiple articles on McKinsey highlighting the firm’s work with China and Russia, and controversy over a McKinsey-managed hedge fund. A picture accompanying the article on the company’s China work shows a red carpet winding through the desert floor in Kashgar, China, where McKinsey was holding a corporate retreat not far from where thousands of Uighurs, a Muslim minority group, are being held in concentration camps.

Regionally, McKinsey came under fire in Missouri for a Medicaid consulting contract that cost taxpayers $2.7 million, when McKinsey’s price was greater than the sum of the three lowest bids. Concern was also raised that Missouri’s Chief Operating Office Drew Erdman is a former McKinsey employee. The New York Times also reports on McKinsey’s efforts to help drugmakers boost opioid sales.  According to the story, the firm advised a pharmaceutical company to “get more patients on higher doses of opioids” and study techniques “for keeping patients on opioids longer.”

The contract, which is available for download from the Office of Procurement and Contracts, says Commerce “…will provide information to the consultant regarding its current economic development programs and incentive tools, as well a listing of complementary retention and recruitment programs and tools provided at the local level. Commerce will also provide a complete listing of incentives provided by other State agencies including Network Kansas, KDOT, KDA, etc.”  That information currently isn’t available to the public, even with Open Records requests.

There is currently no way to track incentives and their effectiveness in the state of Kansas. During the 2019 legislative session, a new law was passed that requires transparency on state incentives. However, as of yet, that information has not been made available to the public. There is no legal requirement in Kansas for cities and counties to publish information about the depth and breadth of local tax incentives they hand out.

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