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Dominic Barton, and the Damage Done. Part 1.
All the king's horses aren't going to make a difference. Not this time. It's too late.
The seismic aftershocks will persist well into the future and there will be all kinds of creative, campaign-jingle attempts to explain them away as they erupt, but the great unraveling has begun. Seven years of hubris got us into this predicament and it’s not like the vandals behind liberal democracy’s worldwide implosion will be owning up to what they’ve done anytime soon.
But it’s over.
It’s not clear when the Americans finally read the riot act - the Liberal establishment’s creepy intimacies with Huawei, for instance, have been an annoyance to the Americans since the Obama years - but the Biden administration has clearly had quite enough. The Trudeau government is now going out of its way in the effort to convince Washington that it’s genuinely committed to the duties of liberal democracy over the inducements of state-capitalist thug regimes.
It’s all “friendshoring” with democratic allies now, and “decoupling” from China, and in a 180-degree reversal Innovation Minister François-Philippe Champagne has just ordered three Chinese firms to divest themselves of their interests in Canadian mining companies with holdings in the critical minerals required for the production of wind turbines, electric cars, laptops, rechargable batteries and what have you.
Mind you, it would have been a hell of a thing for Champagne to have ignored the clear recommendations that came from Canada’s national security and intelligence agencies during the “multi-step” Investment Canada Act review sitting on his desk, but still, it’s something.
It’s a certainly a departure from practice, and I see our friend Sam Cooper over at Global News has got an absolute ripper today about how the Trudeau government has been ignoring the most shocking intelligence about Bejing’s covert interference in Canadian elections. You can bet these disclosures, too, will make the Americans sit up and take notice.
It wasn’t just Dominic Barton, of course, and it wasn’t just McKinsey & Company, the global management consulting firm he led to fabulous wealth and sinister influences among and between the elites in Beijing, Moscow, Riyadh, New York and Montreal. But there is no one more than Barton who quite personifies the swagger and self-aggrandizement that got us into this mess.
And if there’s any Canadian more deeply and directly implicated in the dysfunctions that have divided the world into the fabulously rich and the crushingly poor, into state-capitalist tyranny and precarious freedom, I don’t know who it is.
I touched on some of the damage done to Canada in my column in the National Post and the Ottawa Citizen this past week, so do please read so I don’t have to repeat myself. I’ve been digging deeper since then, which is why a full week has passed since my last newsletter. I’ve got some wholly unreported skinny on Barton and McKinsey here and to come. For today, no paywall, but this work does takes time and effort. You know what to to do.
It is a strange thing that Barton’s role in the slow collapse of the “rules based international order” is perhaps least understood in Canada, where his reach and grasp and status have been greatest. Maybe it’s that the Liberal establishment’s very own Mephistopheles has been the Trudeau government’s golden boy. Maybe it’s simply that this exalted world-class wunderkind of capitalism is himself a Canadian that impudent questions are so rarely allowed to intrude upon the hagiography, the Bay Street tributes and the business-class galas in his honour.
Here’s one of those impudent questions, from the House of Commons Special Committee on Canada-China Relations: During his time in Shanghai as McKinsey’s Asia chairman from 2004 to 2009 and during his subsequent nine years as McKinsey’s global boss, who were McKinsey’s Chinese clients, exactly?
The answer to Parliament from Barton and McKinsey: None of your business. Read on if you want to know who those clients were. You’ll see why Barton and McKinsey were so adamanant that Canadians, particularly, shouldn’t find out.
Here’s how the China Economic Weekly described how deeply Barton’s McKinsey had entrenched itself within China’s state-capitalist kleptocracy. McKinsey was the “foreign brain behind the 12th Five-Year Plan,” the Chinese Communist Party’s 2011-2015 blueprint that coincided with Xi Jinping’s ascension to the throne as the Supreme Leader of the People’s Republic. Barton and McKinsey were also simultaneously the brains behind Trudeau’s Advisory Council on Economic Growth, which has set the tone for Canada’s economic policy, trade policy and foreign policy from the beginning.
You’ll want to turn to the Atlantic magazine for How McKinsey Destroyed the Middle Class to get an inkling of the broad-scale damage the firm has done in the American scheme of things.
By the time Barton moved from his post as McKinsey’s global managing director into his new job as Canada’s ambassador to China, McKinsey had ensconced itself into management roles in 90 of the world’s 100 largest corporations, and the income of a typical multinational CEO had risen from 20 times a production worker’s income to 300 times as much. You couldn’t have done a better job inciting populist discontent with globalization if you tried.
On the Fortune 500 list of the world’s biggest companies, McKinsey can now count 70 of its alumni among the companies’ chief executive officers. During Barton’s time at the helm, McKinsey’s revenues doubled to more than $10 billion. Quite separately, by 2019 McKinsey was running its own private $12.3 billion hedge fund for its alumni in a jumble of companies tucked away in offshore tax havens.
Throw in its scandalous double-dealing with federal tobacco regulators at the same time as procuring immensely lucrative deals with tobacco producers that required McKinsey to pay out $438 million earlier this year. Add to that the firm’s work for the federal Food and Drug Administration while at the same time teaching Purdue Pharma in the dark arts of turbocharging sales of the killer drug OxyContin that required McKinsey to pay out $641 million in claims settlements last year. Heap on a few more scandals and you’ll get an idea why Dominic Barton is no hero in the United States.
But to get some detailed answers to the questions Barton refused to provide the House of Commons two years ago, you’ll have to turn to the just-published 368-page When McKinsey Comes to Town: The Hidden Influence of the World’s Most Powerful Consulting Firm by the New York Times reporters Michael Forsythe and Walt Bogdanich.
The Chinese state-owned enterprises McKinsey kept adding to its client list during Barton’s tenure included nine of the top fifteen Chinese contractors in Xi’s Belt and Road project, the globe-girdling imperialism that’s leaving infrastructure debt traps all over the Global South, and 26 of the 96 state-owned enterprises directly controlled from Beijing. These are the weapons manufacturers, the agri-food empires, the telecommunications giants, the oil companies, the coal companies, the steel companies, and the road-and-bridge construction companies “that build ports around the world as an instrument of Chinese foreign policy.”
These are the zhongyang qiye, the conglomerates that serve at the vanguard of Xi’s global ambitions: China Mobile, China Telecom, Shandong Steel, Shanxi Liheng Iron & Steel and so on. That was McKinsey’s client list during Barton’s reign.
One the greasiest of McKinsey’s arrangements was its contracts with the Communications Construction Company, the giant that built those militarized islands in the South China Sea that violate international law and pose a direct threat to free commerce of the seas. That’s the kind of thing that gives Pentagon planners nightmares.
In a more direct threat to Canada’s national security interests among the Chinese zhongyang qiye that were secured by McKinsey when Barton was boss were Sinopec, PetroChina, the China National Petroleum Corporation and the Chinese National Offshore Oil Corporation. These were the firms that embarked on a campaign to buy up strategic spigot points in the Alberta oilpatch before Stephen Harper’s Conservatives put a stop to it in 2013. These were the clients Barton and McKinsey didn’t want to tell the House of Commons about two years ago.
CNOOC’s $15.1 billion acquisition of Calgary’s Nexen Inc. was the biggest overseas acquisition in the history of the People’s Republic. Running for the Liberal leadership at the time, Justin Trudeau declared his support for CNOOC’s bid. The deal would be good for Canada, Trudeau said, because it would somehow create “middle-class Canadian jobs.”
In Canada, McKinsey is known in polite establishment circles as the principled company that took a stand during the mass protests following the murder of George Floyd. Among Hongkongers, McKinsey is remembered for refusing to say a thing when Hong Kong’s mass pro-democracy uprising was being crushed on orders of Xi Jinping.
Also among Barton’s Chinese client acquisitions: the Chinese Commerce Ministry itself, along with Beijing’s State-Owned Assets Supervision and Administration Commission - the agency that oversees the Chinese Communist Party’s state-owned enterprises. Quite the accomplishment, achieved while Barton was also chair of the Trudeau government’s Advisory Council on Economic Growth. And Trudeau was quite clear about where he intended Canada’s economic growth to come from: China.
Barton is still there in Foreign Affairs Minister Melanie Joly’s Indo-Pacific Advisory Committee, which is supposed to be crafting Canada’s new China policy, which we’ve been promised for nearly five years now. And McKinsey alumni are situated comfortably in Ottawa still, too.
There’s more about that, and about McKinsey and Russia, and about Barton’s time as our ambassador to China and his other business interests, to come.