Monday, February 6, 2023

Eureka we have the smoking gun, Trudeau's in bed with the Chinese via/McKinsey

Eureka we have the smoking gun, Trudeau's in bed with the Chinese via/McKinsey

Dominic Barton and McKinsey have been China's best friends in Canada

A new book by two New York Times reporters casts the company — and Canada's former ambassador to China —in a new light.

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Apart from Prime Minister Justin Trudeau, if you had to pick one man whose ideas have formed and shaped the Liberal government’s global outlook and economic policies more than any other fella, you probably wouldn’t choose Dominic Barton.

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Most Canadians will know Barton only as our ambassador to China through the nearly three-year ordeal of Beijing’s kidnapping of Michael Kovrig and Michael Spavor. When that humiliation was over, quite a few Canadian opinion-makers fell for the story that Barton played some key role in negotiating the Michaels’ release.

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He didn’t, as an exhaustive investigation undertaken by the Wall Street Journal, published last week, amply proves. But it is a new book by New York Times reporters Michael Forsythe and Walt Bogdanich, When McKinsey Comes to Town: The Hidden Influence of the World’s Most Powerful Consulting Firm, that casts Barton in an even clearer light.

It was during Barton’s decade as global managing director for McKinsey and Associates that the company became notorious for serving kleptocrats and oligarchs from Moscow to Riyadh and from Beijing to Johannesburg. While Trudeau’s infatuation with China was already a family tradition, Barton’s formulae situating Chinese markets and money as the keys to Canada’s prosperity were built into Trudeau’s program long before he was prime minister: it was all right there and ready to go when he was running for the Liberal Party leadership.

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It was Barton who served as chair of Finance Minister Bill Morneau’s Advisory Council on Economic Growth, and McKinsey provided the council’s research and resources — for free. When Trudeau first drew the adulation of the rich and famous at the World Economic forum in Davos — the heyday of Trudeau’s fancy-socks phase — it was Barton who introduced him.

The tatters of Barton’s Canadian legacy do not feature prominently in When McKinsey Comes to Town, but they’re worth noticing here, if only in passing. The headlines this week – Ottawa reveals plan to welcome 500,000 immigrants per year by 2025 — come from Barton’s blue-chip advisory council on big ideas. The Canada Investment Bank was another of the advisory council’s inventions, although that institution was quickly beset by scandals about secret bonuses to directors and its general uselessness. Last month, the all-party House of Commons transport committee recommended that it be abolished.

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But McKinsey’s Canadian legacy, particularly the Trudeau government’s catastrophic early zealotry in the cause of normalizing relations with Russia and integrating the Canadian economy with China’s appetites and requirements, may be most evident in the recent declamations from Trudeau, Deputy Prime Minister Chrystia Freeland and Innovation, Science and Industry Minister François-Philippe Champagne. We’ve changed, honest we have, the three of them have been lately yelling at President Joe Biden’s administration in Washington.

Trudeau is now extolling Canada’s virtues as a place where the free world can obtain vital mineral resources without having to bend the knee to Russian or Chinese gangsters and slave holders. One half-expects him to invoke the dreaded Reform Party term “ethical oil.” Freeland has been loudly echoing every sentence U.S. Treasury Secretary Janet Yellen has ever uttered that contains the word “friendshoring.” Champagne has gone so far as to resort to the term “decoupling” in relation to trade with China — a word that not long ago would get you dismissed in Liberal circles as some sort of grubby eccentric from the McCarthy era.

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It’s not just outrageous but otherwise run-of-the-mill corporate sleaziness that makes When McKinsey Comes to Town such a necessary guidebook to corporate depravity.

It’s not just the double-dealing — such as taking contracts 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 to settle government investigations into its marketing practices. Or its 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, which resulted in Barton being called to testify in proceedings that cost McKinsey $641 million in claims settlements last year. And incidentally, McKinsey is facing criminal charges in South Africa in the corruption case involving the government’s freight rail contracts there.

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It’s that McKinsey’s army of 40,000 consultants around the world have served as the corporate shock troops that brought down the same “rules-based international order” the Trudeau government has persistently exhorted us to defend, and Barton was McKinsey’s commander-in-chief during the darkest hours, and now it’s too late.

While Barton was McKinsey’s big boss, the company played a foundational role in transforming China’s miserable Maoist collective-farm economy into a ravenous, coal-burning state-capitalist empire, the sworn enemy of liberal democracy everywhere. McKinsey took contracts with dozens of Beijing’s state-owned enterprises, including the behemoths that militarized terraformed islands in the South China Sea and put the U.S. and China at the edge of military confrontation.

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It was all very exciting for Canadians to watch the news when former U.S. president Donald Trump’s campaign chairman Paul Manafort was convicted of financial fraud and all his greasy dealings with Vladimir Putin’s puppets in Ukraine were laid bare. But little if any notice was paid to the role Barton’s McKinsey was playing at the same time in Ukraine, pimping Moscow’s man in Kyiv, Viktor Yanukovych, as the candidate to vote for. Ukrainians have been paying the price for that episode ever since.

While tinpot regimes in the Global South were being drawn deeper into the leg-hold traps of crippling debt through Beijing’s Belt and Road initiative, Barton was serving as Xi Jinping’s megaphone, regurgitating the lie that the Chinese Communist Party’s imperialist project had nothing to do with its geopolitical strategies; it was just good business.

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A mere few months elapsed between his departure from McKinsey and his job as Canada’s ambassador to Beijing, but it was enough time for Barton to take on the job as chairman of Teck Resources, a Canadian coal-mining giant partly owned by China’s sovereign wealth fund. Teck’s main clients: China’s coal-burning steel mills. A fun fact you’ll find in When McKinsey Comes to Town: When you take into account the coal its customers burn, Teck produces the equivalent of 10 per cent of Canada’s entire greenhouse-gas output.

Barton has since gone on to serve as chairman of the board of Rio Tinto, the world’s second-largest mining company. In keeping with policies Barton championed when McKinsey was running Morneau’s advisory panel on economic growth, the federal government is paying out $220 million to Rio Tinto to help “decarbonize” its operations in Sorel-Tracy, Qué.

Meanwhile, last week, the varsity-league consultancy Eurasia Group announced that it will be taking on Barton as its “strategic counsellor.” Barton will be joining Gerald Butts, Trudeau’s former principal secretary, who resigned in the wake of the SNC-Lavalin scandal, and Evan Solomon, the CTV “Power Play” and “Question Period” presenter who joined the Eurasia Group’s media wing last month.



Trudeau's top pick as new envoy to China unlikely to fill key role

Dominic Barton, the managing director of McKinsey, was Justin Trudeau’s top choice for the job. Nabbing Mr. Barton, an executive with global connections and expertise on China, would have been a coup for Mr. Trudeau.

Justin Trudeau heads off next week for his crucial first trip to China in a bid to reset relations with the rising power. But in the aftermath, the ambassador's post in Beijing will likely sit empty for months. The Trudeau team had held out hope for a long time that it would be successful in plugging in Dominic Barton for the job.

Mr. Barton, the London-based managing director of global consulting giant McKinsey & Co., is already chair of Ottawa's advisory council on economic growth. But Mr. Trudeau's inner circle would prefer the high-powered consulting executive to serve his native land full-time, sources say. In particular, they wanted Mr. Barton, known as a Chinese strategist, as envoy in China.

Some senior government officials still believe he will be the next ambassador. But Mr. Barton is now unlikely to fill the Beijing vacancy.

Current ambassador Guy Saint-Jacques agreed to stay through the PM's trip and the G20 summit in September, but he has served four years in Beijing and is to retire in October – so a new ambassador must be ready within months. And after repeated efforts to persuade him, Mr. Barton – who was elected by McKinsey partners to a third term that ends in 2018 and is spearheading firm reforms this fall – has indicated he is not ready to leave yet, according to sources.

Now Mr. Trudeau's government is seeking another candidate for Beijing – although the PM's inner circle hopes Mr. Barton will eventually take some kind of public-service appointment.

That means the immediate follow-up to Mr. Trudeau's inaugural China trip, with its trade and political fallout, will probably be temporarily handled in Beijing by a chargé d'affaires, or interim ambassador, perhaps Mr. Saint-Jacques's current deputy, Cindy Termorshuizen.

But the courting of Mr. Barton shows Mr. Trudeau is looking to send a signal to China – an indication he is looking outside the ranks of the foreign service to send a "political" appointee to the People's Republic of China for the first time, the kind often dispatched to the traditional first-tier diplomatic postings of Washington, London and Paris. In China, where an official's own power and connection to the leader is carefully judged, that will open doors.

Landing Mr. Barton, a man with global connections with China, would have been a particular coup.

At McKinsey, Mr. Barton heads a global firm known for whispering advice to national leaders and CEOs of major corporations. And before that, he led the firm's operations in South Korea, then across Asia, and he has written books and articles about China and built an impressive contact list. A decade ago, South Korea's then-president Lee Myung-bak named Mr. Barton chair of his international advisory council; in February, he was welcomed in Pakistan by Prime Minister Nawaz Sharif.

When Mr. Trudeau travelled to the World Economic Forum in Davos in January to tout the merits of investing in Canada, Mr. Barton organized two breakfasts and a lunch so the new Prime Minister could meet major money managers and investment bankers such as BlackRock Inc. chief executive Larry Fink and UBS AG chair Axel Weber.

And although Mr. Barton is a part-time, volunteer adviser on economic growth, he has also steered Mr. Trudeau's approach to China.

When Mr. Trudeau speaks publicly about China as he prepares to leave for the trip on Aug. 29, you can hear the themes Mr. Barton has expounded in articles, and in presentations to the Liberal cabinet: that the crucial trend is the rise of the middle class, and that business opportunities lie with China's consumers, and not just its industry.

Now, however, the government is seeking someone else to help build that strategy in Beijing. Some people have privately floated the names of a few former premiers – Ontario's Dalton McGuinty and PEI's Robert Ghiz – although one insider dismissed the names as more the list of Liberal usual suspects than the shortlist for China.

It is not easy to find a candidate who comes with experience of China and can carry the imprimatur of a high-level envoy from the leader. Stephen Harper tried in 2012, but former cabinet ministers such as David Emerson declined, and he turned again to the foreign service.

For prominent business executives such as Mr. Barton, the public service would mean a drastic pay cut. But he has become an influential figure in the Liberal government's thinking, and the Trudeau team plans to keep courting him to sign on full-time somewhere, even if it is not Beijing.

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