DOJ Fines McKinsey Subsidiary Over $122 Million for Violations of the Foreign Corrupt Practices Act

On December 5, 2024, the U.S. Department of Justice (DOJ) announced McKinsey & Company Africa (Pty) Ltd (McKinsey Africa) will pay over $122 million in connection with a scheme to bribe South African government officials between 2012 and 2016. According to court documents, McKinsey Africa agreed to pay bribes to then-officials of Transnet SOC Ltd. (Transnet), South Africa’s state-owned custodian of ports, rails and pipelines, and Eskom Holdings SOC Ltd. (Eskom), South Africa’s state-owned energy company, in exchange for confidential information that earned McKinsey & Company, Inc. (McKinsey) and McKinsey Africa $85 million in profits.

McKinsey Africa is a wholly owned and controlled subsidiary of Illinois-based international consulting company McKinsey. Court documents reveal that a senior partner of McKinsey Africa agreed to pay bribes to South African government officials in exchange for non-public information regarding multimillion-dollar consulting engagements. McKinsey Africa and the former senior partner were both charged with one count of conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practice Act (FCPA).

The DOJ reached this resolution with McKinsey Africa based on several factors, including the nature and seriousness of the allegations as well as McKinsey Africa’s cooperation with the DOJ’s investigation. DOJ credited McKinsey Africa with immediately and proactively cooperating with the investigation, separating from the former senior partner, promptly reporting discovery of documentation-deletion efforts by the former senior partner, preserving and producing documents, conducting anti-bribery training of its employees, and enhancing due diligence processes.

This action underscores DOJ’s commitment to pursing violations of the FCPA regardless of the country in which they occur.

Violations of the FCPA can be severe and may result in hefty fines and potential criminal consequences. Ensuring a company has adequate due diligence measures, training, and policies in place are crucial to avoiding potentially serious penalties.

Buchanan’s team of National Security attorneys has extensive experience advising on the FCPA and is well-equipped to provide counsel on navigating the complex issues surrounding its enforcement.