French prosecutors open tax evasion probe after reviewing government use of consultancy firms


French financial prosecutors have opened a preliminary investigation into allegations of tax evasion brought against the American McKinsey as part of a Senate investigation into the government’s use of private consulting firms.

The prosecution did not name the target of the investigation but, in an interview with Le Figaro newspaper, Emmanuel Macron, President of France, confirmed that it was McKinsey.

“We will know at the end of this judicial investigation whether there has been tax evasion by this company or not,” he said.

The investigation represents a setback for Macron just days before he is due to stand before voters seeking re-election in the first round of voting on Sunday. Polls show he looks set to run in the second round, but his lead over far-right candidate Marine Le Pen, now second, has shrunk to the margin of error in some polls.

Macron’s political rivals have taken over what they call the McKinsey scandal to criticize his government for spending too much on consultancy when France already has a large public sector made up of career civil servants.

The investigation follows a March 16 Senate report that criticized the “influence of consulting firms” on the state and called their use “broad and opaque.” Central government ministries alone spent 893.9 million euros there in 2021, more than double the amount in 2018, according to the report.

McKinsey, which has advised the French government on the deployment of the Covid-19 vaccine, technology projects and education, has received particular attention, although it is only one of the many companies that work for the state.

On March 25, the Senate alleged in a statement that McKinsey had not paid corporation tax in France for at least 10 years.

The company denied any wrongdoing and said it complied with applicable tax and social security rules. It said it had paid more than 422 million euros in tax and social charges related to its employees in France from 2011 to 2020, or around a fifth of its turnover over the period.

“If requested, McKinsey will make itself available to the administration and to the relevant authorities,” he said on Wednesday.

Macron, a former investment banker, sought to defuse the controversy for more than a week, first sending his ministers to argue that the use of advice was “widespread and in the vast majority of cases useful” 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 years for reform of the international tax system to limit tax avoidance techniques. “If there is abuse, on a case-by-case basis, then it must be sanctioned,” he said on France Inter radio.

Macron’s presidential rivals have sought to use the episode to portray the president as a technocrat in the grip of international consultants to remind voters of how the former Rothschild employee ruled as “president of the rich”.

“Macron comes across as a head of state who has no confidence in the state or the officials who work for him,” Le Pen said at a weekend rally in eastern France. “Who really runs this country?

Separately, a police investigation into the death of a young Jewish man named Jérémy Cohen also became a campaign issue after his family asked far-right candidate Eric Zemmour to draw public attention to the February incident in which he was killed by a streetcar. They say assailants pursued Cohen until his death in Bobigny, northeast of Paris, because he was Jewish.

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

Additional report by Victor Mallet in Paris


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