Business & trade, Lobbying law, Middle East, New in Lobbying

US consulting giants reveal $7.5 million in work for Saudi crown prince’s reform agenda

Two of the world’s biggest consulting firms have just registered as Saudi foreign agents for work they did for the kingdom several years ago.

McKinsey & Company and the Boston Consulting Group International were hired to boost business ties between the United States and Saudi Arabia on behalf of the Saudi Council of Economic and Development Affairs (CEDA), according to documents filed with the Department of Justice. They were paid $4.8 million and $2.8 million respectively by the Saudi Arabian Oil Company (Saudi Aramco) for work conducted between December 2015 and June 2016.

The disclosures come six weeks after Booz Allen Hamilton likewise registered under the Foreign Agents Registration Act (FARA) for work it conducted on behalf of the Saudi Embassy in Washington in 2017. The firm was paid $3 million, bringing the total Saudi Arabia paid to US consulting firms to around $10.5 million. This the first time any of the three firms registers under FARA.

The registrations come as the Department of Justice has been aggressively enforcing the FARA law in recent years (read our coverage of all the latest trends here). Of note, none of the three firms were involved in reaching out to US officials or agencies, the traditional definition of lobbying.

“McKinsey’s FARA registration relates to work in 2015-2016 in which we helped support the Government of Saudi Arabia’s efforts to grow and diversify the Saudi economy and to reduce barriers to outside investment,” a McKinsey spokesperson told Foreign Lobby Report in an emailed statement. “As part of this work, we and others helped organize discussions between US business leaders and think tank experts, and Saudi officials. Our role in this project has long been public and did not involve lobbying or any outreach to US public officials.”

Department of Justice spokesman Marc Raimondi said the latest registrations “are a further demonstration that our efforts to improve FARA compliance are working.” Boston Consulting in an emailed statement said: “As a matter of policy, BCG does not discuss client work. We strive to comply with all laws and regulations relevant to our work, including filing under FARA.”

The Saudi council that McKinsey and Boston Consulting worked for was created by royal decree in January 2015 to oversee the kingdom’s domestic affairs. Crown Prince Mohammed bin Salman presides over the council, which is also in charge of implementing Prince Mohammed’s plan to transition the economy away from oil, according to a report by New York law firm Shearman & Sterling.

“CEDA is also responsible for the implementation of Saudi Vision 2030 and development of mechanisms, policies and programs necessary to achieve the goals set out in Saudi Vision 2030,” according to the report. “CEDA has established a number of committees and offices to facilitate the implementation of Saudi Vision 2030 including a Finance Committee, Media Team, Strategic Committee, Strategic Administration Office and Project Management Office.”

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According to its filing, McKinsey was hired to assist in setting up a strategic partnership office to help improve “manage and improve Saudi Arabia’s relationships with numerous countries around the world.” This later became the Saudi Center for International Strategic Partnerships.

The firm was also involved in :

  • market testing of various sectors of the Saudi economy and analyzing and exploring investment opportunities in Saudi Arabia;
  • commissioning a third-party public opinion survey of American attitudes towards Saudi Arabia;
  • preparing Saudi officials for engagement with certain US private and public sector counterparts in Saudi Arabia; and
  • assisting in arranging and supporting meetings in the United States in February 2016 and June 2016 between Saudi officials and think tanks and/or corporations in various sectors including finance and technology, in order to explore potential investment opportunities in Saudi Arabia.

As for Boston Consulting, the firm said it was hired to “develop a 21st Century Saudi-US Partnership” and “assess reactions and aspirations of key U.S. stakeholders to such a partnership.” The firm notably suggested ways to engage leaders from different sectors including education, entertainment, manufacturing, infrastructure, finance and defense to deepen ties. Key deliverables included:

  • assisting and supporting meetings between US stakeholders and the Saudi Delegation (February 2016 and June 2016);
  • targeting industry participants and stakeholders to engage;
  • establishing aspirations (e.g., help develop framework and key considerations to boost social and economic collaboration); and
  • program design (e.g., design sector specific enablers, incentives, change agenda and required commitments across priority opportunities).

McKinsey registered six partners and senior partners based in New York, California, Dubai and Paris on the account. Boston Consulting registered seven partners and one associate located in the Washington, DC area and New York, California and Massachusetts as well as Beirut and Dubai.