Russia fired more than 2,000 missiles on Ukraine since invading in February. The engines for many of these missiles were manufactured by a massive state-owned enterprise called Rostec, and executives for that company hired the global consulting giant McKinsey & Co. in recent years for advice. 

At the same time McKinsey was advising the Russian defense conglomerate, though not on any work directly involving weapons, the firm was carrying out sensitive national security contracts for the Defense Department and the U.S. intelligence community, according to an NBC News investigation.

McKinsey has come under scrutiny in Congress for its work with state-owned companies in ChinaThe lawmakers are questioning whether the company should receive national security contracts due to its large presence in China. McKinsey is also facing accusations of ignoring possible conflicts of interest when it advised both opioid manufacturers and officials regulating opioidsAt the U.S. Food and Drug Administration.

McKinsey’s consulting work for Rostec put it in a risky situation, due to its relationship with the U.S. government. Scott Blacklin is a former president of Blacklin and Associates and was also the head of U.S. Chamber of Commerce Russia.

“It is really difficult to comprehend how an American consulting company… would wish to get involved in sensitive Russian defence, intelligence, or scientific establishment areas.” Blacklin explained that Rostec refers to all those combinations.

Sen. Maggie Hassan, D-N.H., told NBC News McKinsey displayed “a pattern of behavior” when it was consulting in Washington, both abroad, that raises grave concerns about conflict of interest.

McKinsey’s choice and that of the U.S. government continuing to contract with McKinsey, despite possible conflicts, are deeply troubling.

However, the New York-based company says its work in Russia is not a problem for its services to the Pentagon or other federal agencies. When asked by NBC News, a company spokesperson, Neil Grace, said McKinsey has strict rules and firewalls to safeguard against conflicts of interest, and that its work abroad is walled off from its work in Washington.

Grace stated that McKinsey adheres to all U.S. contracting laws. We serve the U.S. government through separate legal entities with different operational structures, and independent information technology.

Grace stated that McKinsey’s Rostec consulting did not include weapons systems. It was core commercial and operational issues of the type that we advise clients all around the world.

Grace said, “For example our work with one subsidiary was bus use in public transit system.” This work was not meant to benefit the Russian military.

McKinsey provided additional research and assistance on a project relating to an engine for commercial aviation.

McKinsey’s conflicts of interest were investigated by NBC News. NBC News reviewed McKinsey’s Federal Contracting Documents, Court Filings, Statements from McKinsey and Russian Media Reports. NBC News also interviewed lawmakers, former officials and experts.

Federal law requires companies to disclose potential conflicts of interest, and how they intend to deal with them. McKinsey, who was granted four federal contracts by NBC News to the Defense Department and the Navy as well as Customs and Border Protection did not find any conflicts of interest for its involvement with Russia-owned state enterprises.

U.S. authorities have not charged McKinsey with violating federal contracting laws related to its work in Russia or China, and there are no allegations that McKinsey has damaged U.S. national security due to its work with governments hostile to the United States.

McKinsey is being accused of sharing information from FDA regulators that it gleaned with drug companies in its work on opioids. McKinsey denied these allegations and denies any wrongdoing.

It is unclear whether McKinsey employees shared information between accounts in the cases of McKinsey’s consulting in Russia, and Washington. There’s also no evidence to support this.

McKinsey was interviewed by McKinsey along with two of the consulting firms who make up the so called Big Three, Bain Consulting Group (BCG) and Boston Consulting Group (BCG). This happened just a week after Russia invaded Ukraine. pulling out of Russia and suspending business operations. McKinsey along with two other firms of consultants decided to not withdraw from Russia when Russian forces invaded Ukraine in 2014. There was no international response and corporate exodus.

McKinsey was known for its promotion of work with 21 out of 30 largest firms in the nation. And according to a 2020 bankruptcy court filing and documents filed this week in Puerto Rico’s bankruptcy proceedings, the firm did consulting work for Russia’s largest bank, SberBank, VTB bank and state energy companies Gazprom and Rosneft, all of which are closely tied to the Kremlin. The value of McKinsey’s work consulting for these firms has not been revealed.

McKinsey does not represent the only consulting firm or accountant that has worked in Russia with government-owned businesses. 

The firm is distinguished by its work with Russia’s top political and military players, however.

Rostec is an enormous defense conglomerate that dominates Russia’s military-industrial complex. It manages hundreds of businesses and manufactures a variety of weapons and military hardware. Its subsidiaries make military attack helicopters, which are currently operating in Ukraine. They also produce engines for lethal and non-lethal weapons. cruise missiles now raining down on Ukraine and Russian naval frigatesAs well as electronic warfare systems and night vision goggles.

In the aftermath of Russia’s seizure annexation of Ukraine’s Crimean Peninsula in 2014, the company’s subsidiaries have sought to build energy plants in Crimea and take over defense manufacturers to cement the region’s ties to Russia, according to the British government. McKinsey links to Rostec go back to at most 2010According to several sources, reports in Russian media. They were in 2015 hired to implement “large-scale reform” at Russian Helicopters, a Rostec subsidiary that manufactures a range of civilian and military helicopters. 

Rostec CEO Sergei Chemezov is a supporter staunch of Russian President Vladimir Putin, who also served as a KGB officer. officer with him in Dresden during the Soviet era. Spain recently took a 153 million superyacht. linked to Chemezov, Reuters reported.

Blacklin said that Rostec can “reach any territory it wishes in Russia” with its unlimited state funds and is capable of capturing anything. It’s almost like if Raytheon, Lockheed, and Cisco Systems decided to join forces with the Pentagon and CIA.

Rostec didn’t respond to our request for comment.

State-owned companies in Russia are under tight control by the Kremlin and are routinely plundered by government officials, according to Bill Browder, an outspoken critic of Putin who once ran the largest foreign investment fund in Russia.