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Speaker 1: You know, we talk about it occasionally on our show

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Speaker 1: here the kind of stuff we would be doing if

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Speaker 1: we weren't doing podcast.

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Speaker 2: Yeah, consulting about podcasts.

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Speaker 3: Join our new podcast consultancy.

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Speaker 2: Which is actually kind of part of our job descriptions,

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Speaker 2: which is weird.

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Speaker 4: Technically is it?

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Speaker 1: Technically is we do develop shows? And it's not because

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Speaker 1: we are some you know, moseses on the mountaintop who

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Speaker 1: know what, who know everything. It's because we've been around

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Speaker 1: long enough that if there is a mistake, we have

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Speaker 1: made that mistake.

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Speaker 2: Yeah, we're the idea guys, because we messed up a

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Speaker 2: lot pretty often.

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Speaker 3: Yeah.

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Speaker 1: And one of the one of the questions we got

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Speaker 1: in correspondence several years ago was about consultancy, right, the

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Speaker 1: idea of being a consultant. It's a heck of a

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Speaker 1: group term, and it means it can mean a lot

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Speaker 1: of things.

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Speaker 2: I don't want to spoil this one at all, this one,

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Speaker 2: this episode unfolds. I think we should just let it happen.

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Speaker 3: From UFOs to psychic powers and government conspiracies, history is

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Speaker 3: riddled with unexplained events. You can turn back now or

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Speaker 3: learn the stuff they don't want you to know.

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Speaker 2: Hello, Welcome, back to the show. My name is Matt

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Speaker 2: Our co host Noel Is on Adventures.

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Speaker 4: They call me Ben.

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Speaker 1: We are joined with our super producer Paul Mission Control

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Speaker 1: dec At most importantly, you are you, You are here,

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Speaker 1: and that makes this stuff they don't want you to know. Matt,

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Speaker 1: do you ever contemplate alternative timelines or alternate timelines? Do

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Speaker 1: you ever think of who you might be and what

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Speaker 1: you might be doing in a universe just to the

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Speaker 1: left of ours.

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Speaker 2: Yes, I have a similar thing to that. It's a

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Speaker 2: it's a it's a yes but which is a weird thing.

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Speaker 2: Shouldn't shouldn't do yes butts. But my wife and I

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Speaker 2: have this theory that we jumped timelines sometime in twenty sixteen,

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Speaker 2: that all of Earth jumped the timeline, and somehow we've

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Speaker 2: were in this alternate reality now where where just things

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Speaker 2: are a little bit off of what they were before,

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Speaker 2: and we we don't really know because it's that whole

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Speaker 2: Mandela effect thing where our memories are a little different.

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Speaker 2: But in this timeline, it's all been this way forever.

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Speaker 1: And that's that's an interesting argument. It's more common than

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Speaker 1: you might think, especially here in the West. Quite a

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Speaker 1: few people have on an individual level floated something like

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Speaker 1: that with me. I'm I guess my timeline question for

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Speaker 1: you and for you listeners today is hinging on these

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Speaker 1: these sorts of thought experiments that we have, these Walter

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Speaker 1: Mitti esque moments where we think, you know, what is

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Speaker 1: my life in this other universe, like where I am

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Speaker 1: an astronaut or where I am a touring percussionist for

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Speaker 1: I don't know what. What's a dream band that people

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Speaker 1: want to play percussion for.

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Speaker 2: I always knew that you were going to do that

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Speaker 2: one day. I knew it. Dave Matthews Man.

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Speaker 1: Oh yeah, I met one of their touring drummers, not

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Speaker 1: the main guy, but I met one of their touring

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Speaker 1: drummers a while back. Really nice guy. Uh That is

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Speaker 1: the end of that story. But the reason I ask

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Speaker 1: is because you met Carter. What's you met Carter?

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Speaker 4: No, not the main drummer.

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Speaker 3: Oh okay, no, no, one of the like one of

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Speaker 3: the bongo guys.

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Speaker 2: Oh yeah, the percussionist gus Yeah.

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Speaker 1: Uh So, way back in a different version of my

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Speaker 1: own life, I was on track to be an employee

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Speaker 1: of something very much like the company that we are

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Speaker 1: examining today. Thankfully, this is just my opinion. Thankfully I

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Speaker 1: didn't do it, and my thoughts and prayers go out

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Speaker 1: to whatever Benboland lives in an a version of the

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Speaker 1: timeline where the cards fell differently.

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Speaker 2: And instead we got into this.

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Speaker 1: And instead we ended up doing this. Yes, when we

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Speaker 1: think of global powers, we usually think of nations, right, governments, religions,

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Speaker 1: huge multinational corporations and so on, and we understand in

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Speaker 1: a very general way how all of these work. You

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Speaker 1: don't need to be a president or prime minister to

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Speaker 1: understand that nations on paper seek to make life better

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Speaker 1: for their citizens.

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Speaker 4: On paper, and you.

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Speaker 1: Don't need to or maybe a certain segment of their citizenry.

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Speaker 1: You don't need to be a priest, a patriarch or

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Speaker 1: a pope to understand that religions typically strive to make

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Speaker 1: new converts and spread their teachings, their philosophies and souls

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Speaker 1: and save souls, yeah, depending on the religion, while a

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Speaker 1: corporation will work to expand its market share and ultimately

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Speaker 1: its bottom line. And all of these things are fine

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Speaker 1: in theory, right, but none of them are inherently good

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Speaker 1: or evil, which I know can ruffle some feathers, especially

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Speaker 1: when we talk about religion. We're not talking about a

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Speaker 1: specific religion, just the concept none are inherently good or evil.

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Speaker 1: Because some nations might improve life for their citizens or

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Speaker 1: some percentage of their population by making things worse for

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Speaker 1: other people in another country, or indeed in the same country.

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Speaker 1: And some religions may advocate slavery or death for non

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Speaker 1: believers that may be the best way to save their souls,

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Speaker 1: according to some teaching or interpretation thereof. And as we know,

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Speaker 1: some corporations may reak tremendous havoc chasing that bottom line

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Speaker 1: and even ultimately shoot themselves in the foot, you know

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Speaker 1: what I mean.

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Speaker 2: But today's story is about something else entirely, not a religion,

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Speaker 2: not a nation, perhaps not even really a corporation, at

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Speaker 2: least in the way that we would traditionally think about

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Speaker 2: one of those. Today's episode is about a mysterious consultancy

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Speaker 2: firm called the McKenzie Group, but to those in the know,

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Speaker 2: it's simply called the Firm. Ooh, I like that movie

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Speaker 2: with Tom Cruise, right.

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Speaker 1: Yeah, there's also the book, a book The Firm. There's Chrishiam. Yeah,

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Speaker 1: and there's a documentary about Mackenzie called The Firm. So

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Speaker 1: let's look at the history first. Here are the facts.

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Speaker 1: This thing is very, very old. The Mackenzie Group was

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Speaker 1: founded in nineteen twenty six by a fellow named James O.

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Speaker 4: McKenzie.

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Speaker 1: He was a University of Chicago professor and an expert

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Speaker 1: on what's known as management accounting. He worked his way

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Speaker 1: up from the bottom.

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Speaker 2: Okay, management accounting, So I guess a manager of sorts?

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Speaker 2: Mart I guess in this case he is a consultant.

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Speaker 1: High level accounting. Right, how do we best understand a

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Speaker 1: budget for an organization?

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Speaker 2: Right?

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Speaker 1: How do we streamline that budget? How do we grow

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Speaker 1: certain parts of it?

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Speaker 4: And so on.

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Speaker 1: He was born way back in eighteen eighty nine. He

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Speaker 1: grew up in fairly modest means in a three room

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Speaker 1: house in the Ozarks. And this kind of these kind

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Speaker 1: of humble beginnings are talking points that a lot of

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Speaker 1: companies of this nature love to hit, you know what

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Speaker 1: I mean? Large corporations love to talk about the humble

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Speaker 1: beginnings and therefore the implied genius of their founder. Right,

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Speaker 1: this was an extraordinary person, whatever their name is, because

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Speaker 1: through nothing but their own intellect and gumption they rose

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Speaker 1: to the top.

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Speaker 2: Yeah, his grip on his bootstraps is very strong.

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Speaker 1: This is this is very popular. This is this is

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Speaker 1: an iteration of the American myth, you know what I mean.

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Speaker 1: So it's no wonder that that's one of the first

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Speaker 1: things you'll read about the founder in any of the

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Speaker 1: official literature.

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Speaker 2: It is interesting he started as a professor. That that

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Speaker 2: fascinates me.

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Speaker 4: Mm hmmm.

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Speaker 2: He's a learned man who's already teaching people something there.

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Speaker 2: I feel like this may be just completely naivete on

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Speaker 2: my part, but to be a professor or a teacher

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Speaker 2: of any kind, I feel like there has to be

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Speaker 2: a certain amount of selflessness in somebody. But maybe I'm

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Speaker 2: wrong about that.

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Speaker 1: I'm professors are people, Matt. You know, people have a

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Speaker 1: terrible track record, Okay, but which I mean?

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Speaker 2: I'm not.

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Speaker 1: I share the same I share the same bias in

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Speaker 1: many ways because I am one of those people who,

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Speaker 1: like you, I believe, looks up to professors, people who

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Speaker 1: dedicate such a large portion of their life to learning

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Speaker 1: a specific discipline or even a specific subset of a

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Speaker 1: specific discipline, you know.

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Speaker 2: And then not necessarily using all of that hard work

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Speaker 2: for your own means, you're using it to teach other

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Speaker 2: people to do what you have learned so much about

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Speaker 2: I don't know that. To me, it speaks to somebody's

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Speaker 2: character and I guess at a base level.

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Speaker 4: Yeah, yeah, I agree.

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Speaker 1: It also brings us to I mean, this may be

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Speaker 1: a story for a different day, but it brings us

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Speaker 1: to the idea of academic wars, wars of ideology, which

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Speaker 1: are fought in the ivory towers as we record this episode.

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Speaker 1: You know what I mean, what is the nature of humanity?

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Speaker 1: How does that translate philosophically to the best economic model?

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Speaker 1: Things like that, right, people have been People still choose

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Speaker 1: which hill they want.

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Speaker 4: To die on in this debate.

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Speaker 1: And it can sound dry and academic, but we have

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Speaker 1: to remember that the same people who are opposing one

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Speaker 1: another in these sorts of things, anywhere from more political

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Speaker 1: philosophy to more economic philosophy, these people end up in

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Speaker 1: the halls of power. They end up making laws, you

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Speaker 1: know what I mean, or having a very very strong

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Speaker 1: influence on the laws that are made. So it can

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Speaker 1: seem dry, but at the end of the day, it

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Speaker 1: does impact you, and it impacts everyone around you, at

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Speaker 1: least who lives in that government, and sometimes often people

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Speaker 1: who at least in the case of the US, people

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Speaker 1: who don't have anything to do with the US get

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Speaker 1: impacted by these beliefs. McKenzie's original, I guess breakout single

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Speaker 1: was the principles of what's called scientific management. It was

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Speaker 1: an early practitioner this and this will sound very familiar

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Speaker 1: understandable to all of us. It's just the detailed study

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Speaker 1: of workflow and the division of labor. So we have

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Speaker 1: X amount of employees, why amount of task? How do

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Speaker 1: we translate this into the most efficient process?

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Speaker 2: Right?

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Speaker 1: Which you know we're explaining in a very simple way,

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Speaker 1: but you can see how this becomes incredibly complicated incredibly quickly.

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Speaker 1: But it turns out mackenzie was really good at it.

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Speaker 1: And we all know when we heard that date nineteen

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Speaker 1: twenty six, we all know that there was a context.

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Speaker 1: There was a disaster looming on the horizon. Just a

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Speaker 1: few years after the foundation of the McKenzie group.

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Speaker 2: Yeah, it's not really a great time to found something.

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Speaker 4: Right, the Great Depression occurred.

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Speaker 2: But here's the deal. Under Mackenzie's leadership, this group, this

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Speaker 2: organization that he created, it didn't just survive the depression.

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Speaker 2: It didn't just make it through. This sucker thrived When

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Speaker 2: the founder, James O. McKenzie died in nineteen thirty seven,

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Speaker 2: a gentleman named Marvin Bauer took the firm, and he

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Speaker 2: took it basically beyond what James had been able to

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Speaker 2: take it to some would say glory over the next

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Speaker 2: thirty years. In part, though, this is part of an

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Speaker 2: obsession with being quote unquote professional in appearance and tone

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Speaker 2: and conduct, so really creating an outward image of what

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Speaker 2: this firm is, what a representative of the McKenzie group

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Speaker 2: would be.

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Speaker 1: And an pretty specific, right and pretty meticulous. One word

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Speaker 1: that you would use in a corporate boardroom to describe

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Speaker 1: this would be granular.

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Speaker 2: Yeah, so let's talk about some argyle socks. Who gets

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Speaker 2: to wear them? Who doesn't get to wear them? Argyle?

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Speaker 2: What's your take, mister, mister Bauer.

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Speaker 1: Yeah, mister Bauer once forbade all junior consultants from wearing

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Speaker 1: argyle socks because he thought they would distract clients, And

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Speaker 1: the firm's consultants were all required to wear fedoras at

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Speaker 1: this time. They were all if we were all probably

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Speaker 1: dudes until President Kennedy stopped wearing them.

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Speaker 2: Wow, I see now that I don't know why it

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Speaker 2: just reminds I do know why. It reminds you of

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Speaker 2: the peaky blinders. That's what I'm seeing in my head.

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Speaker 4: Well.

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Speaker 1: Also, this is interesting because it feels like the guy's

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Speaker 1: creating a uniform, right, Yeah, he is creating a uniform,

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Speaker 1: not just a fabric, but also of minds. Marvin Bauer

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Speaker 1: Is can be considered the head brand visionary or propagandist

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Speaker 1: internal propagandist for McKenzie. He's the one who told everybody

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Speaker 1: to start calling it the firm. He established the terminology, jargon, nomenclature,

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Speaker 1: or whatever you want to call it that the employees

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Speaker 1: would use going forward. One example would be the all

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Speaker 1: employees of a certain type were called partners.

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Speaker 4: That was him.

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Speaker 1: It gives everybody some prestige, especially from a client basis.

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Speaker 1: You know, I'm not working with an employee now, I'm

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Speaker 1: not spending millions of dollars on that.

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Speaker 2: I'm working with a partner. That's my partner man.

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Speaker 1: And additionally, he is responsible for a corporate culture that

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Speaker 1: continues by all reports today, you'll hear former mckensey employees

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Speaker 1: say things like there are only three great institutions remaining

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Speaker 1: in the world, the Marines, the Catholic Church and mackenzie

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Speaker 1: and they're serious.

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Speaker 4: Whoa they believe it.

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Speaker 1: Yeah, this kind of loyalty, fervent loyalty and belief in

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Speaker 1: the company is baked into every single employee. He also

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Speaker 1: established a set of rules, rules of engagement and rules of.

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Speaker 2: Conduct, and let's just listen, these off consultants should put

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Speaker 2: the interests of clients before McKenzie's revenues. That's a big change,

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Speaker 2: at least if you're a corporation that is for profit,

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Speaker 2: you are basically saying, in a way, the customer is

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Speaker 2: always right in this situation. But in this case, the

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Speaker 2: customer is your partner.

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Speaker 1: And then he said, of course, Omerta, do not discuss

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Speaker 1: client affairs. That makes sense absolutely. He also said, tell

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Speaker 1: the truth as you see it, even if this means

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Speaker 1: challenging the client's opinion. So let's say that you are

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Speaker 1: working with a large beverage company and they want to

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Speaker 1: make a new kind of product that you know, as

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Speaker 1: McKenzie partner, it's just not going to work. Then it's

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Speaker 1: your job to instead of just taking their money, it's

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Speaker 1: your job to tell them that this ranch dressing flavored

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Speaker 1: soda is a terrible idea.

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Speaker 2: But I'm going to stop you there. That is one

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Speaker 2: of the most disgusting things I've heard in a while.

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Speaker 3: It's also a real thing. Oh god, it's a real thing.

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Speaker 2: So did you do that in the Natural Flavorings episode?

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Speaker 3: No, I was.

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Speaker 1: I went to visit our friends Lauren and Annie over

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Speaker 1: at Savor, Yeah, to do an episode with them about Ranch. Okay,

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Speaker 1: so check that out if you are, if you are,

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Speaker 1: like forty percent of the American public, a diehard fan

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Speaker 1: of Ranch.

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Speaker 4: Wow, can you believe.

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Speaker 2: That my son's in there? Yeah, I'm definitely not.

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Speaker 1: No, neither, I like my buttermilk and mayonnaise separate. Oh

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Speaker 1: I'm kidding. I mean that's what it was originally. Anyway,

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Speaker 1: Just you could check out that episode. Another example's let's

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Speaker 1: say you're a McKinsey partner working for a strong man

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Speaker 1: or dictator an authoritarian regime, and they say, look, the

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Speaker 1: best way to subjugate this ethnic minority is to, I

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Speaker 1: don't know, shoot them all. And then you say, no,

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Speaker 1: the best way to subjugate this ethnic minority is to

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Speaker 1: imprison all of them, but call them re education camps

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Speaker 1: or summer camps. You know, we'll work on the phrasing.

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Speaker 1: That's the stuff you're supposed to do as a McKenzie consultant.

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Speaker 1: You're supposed to stick by what you think is the

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Speaker 1: correct answer, even if your clients, some of whom may

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Speaker 1: be quite dangerous people will disagree with you. And then

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Speaker 1: they said, only perform work that is both necessary and

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Speaker 1: that McKenzie can do.

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Speaker 2: Well, Okay, only stuff that's necessary. I wonder, I wonder

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Speaker 2: why that one is so important. But I guess that's

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Speaker 2: the idea of we're only going to outwardly show good wine.

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Speaker 2: So if we don't know that we can perform this

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Speaker 2: task like to perfection, then we're not even going to

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Speaker 2: attempt it that way, nothing ever, dings our reputation. Yeah.

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Speaker 1: Yeah, there's some self preservation there, right, And it makes

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Speaker 1: sense when you think about it. The idea of only

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Speaker 1: doing work that is necessary also also makes sense. It's

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Speaker 1: a matter of professionalism. You're not doing unneeded work and

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Speaker 1: then finding the client or giving them a fee for that,

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Speaker 1: you know what I mean. It's the difference between a

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Speaker 1: good mechanic and an unscrupulous one.

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Speaker 2: Yeah. Absolutely, here's another rule that mackenzie set for itself.

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Speaker 2: They only work with CEOs and They only work with

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Speaker 2: clients that the firm itself feels will follow the advice

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Speaker 2: of the firm, So they're not trying to get somebody

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Speaker 2: in there that's maybe just wealthy enough, but won't actually

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Speaker 2: heed their advice. Again, they're so selective with how they're viewed.

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Speaker 2: I think we keep painting this picture here and so

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Speaker 2: far since what what was the year nineteen six, it's

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Speaker 2: just been working for them.

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Speaker 1: Yeah, they keep a very very low profile. They did

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Speaker 1: expand their restriction on CEOs to include CEOs of subsidiaries

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Speaker 1: and divisions of larger companies.

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Speaker 2: Isn't that nice?

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Speaker 4: Yeah, so it's a.

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Speaker 1: It's a little bit of a bigger pull than it

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Speaker 1: was originally. But the changes over the years have not

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Speaker 1: fundamentally changed the rules of engagement or the core values

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Speaker 1: of the company. And as you said, Matt, this has

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Speaker 1: been a winning formula.

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Speaker 4: There was a profile story on.

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Speaker 1: McKenzie in nineteen ninety three and said McKenzie and Company

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Speaker 1: was quote the most well known, most secretive, most high priced,

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Speaker 1: most prestigious, most consistently successful, most envied, most trusted, most

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Speaker 1: disliked management consulting firm on Earth.

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Speaker 2: Wow. Love. They threw that most disliked in there right

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Speaker 2: at the end, I wonder who dislikes it.

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Speaker 1: A lot of people, competitors dislike it, victims or I

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Speaker 1: guess you would say unsatisfied clients, right, or people who

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Speaker 1: as a result of a project maybe lost their livelihood.

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Speaker 2: Yeah. I bet there's some law enforcement agencies that don't

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Speaker 2: like them so much, just because they're probably so good at,

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Speaker 2: you know, keeping a face on whatever situation is going on.

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Speaker 1: It's true, but they you know, you can't be this

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Speaker 1: large without having critics as well as fans, right, opponents

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Speaker 1: as well as supporters.

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Speaker 2: Yeah. According to BusinessWeek, the firm is ridiculed, reviled, and

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Speaker 2: revered depending on one's perspective, which makes complete sense. That's

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Speaker 2: what we're talking about. If you're on the front lines

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Speaker 2: with McKenzie, or rather mackenzie is on your front lines,

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Speaker 2: you're probably liking them a lot because it does seem

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Speaker 2: like they're pretty accommodating and are going to get whatever

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Speaker 2: job done you need done.

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Speaker 1: There's one quote that I kept seeing float around which

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Speaker 1: said that amidst the leaders of the business world, I

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Speaker 1: was just saying that you can't be fired for hiring mackenzie.

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Speaker 1: Oh so they also seem to be dependable, at least

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Speaker 1: in certain circles. Let's talk about some of these statistics.

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Speaker 1: They have over one hundred and twenty offices, they have

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Speaker 1: a force of fourteen thousand consultants. They've been in business

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Speaker 1: for almost a century now, ninety plus years. And one

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Speaker 1: of the key murky pieces of Mackenzie is it's alumni

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Speaker 1: who are hugely influential, more current and former fortune five

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Speaker 1: hundred CEOs are alumni of Mackenzie than any other company.

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Speaker 1: I think they have the highest chance of becoming CEOs

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Speaker 1: in general. It's like one on six hundred and ninety,

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Speaker 1: which sounds like tough odds, but that's a hugely favorable number.

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Speaker 2: Okay, so two things here. They're they're being consultants and

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Speaker 2: partners and then they end up becoming CEOs. That's what

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Speaker 2: we're saying here of these giant corporations. Okay, we're not

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Speaker 2: talking about like a pod people situation like CIA infiltration

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Speaker 2: replacing CEOs with Mackenzie are we I don't know.

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Speaker 1: I mean, it is a there is a revolving door argument,

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Speaker 1: but it's not it's not a public private revolution.

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Speaker 4: It's private private.

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Speaker 2: Yeah, it really is. I geah, that's true.

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Speaker 4: So people do. Also, alumni do also go into public service.

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Speaker 2: That's what I was gonna say, alumni go into public service.

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Speaker 2: But then I wonder, I do wonder how many public

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Speaker 2: servants end up at the McKenzie group as like a

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Speaker 2: side gig. But it seems like it would be a

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Speaker 2: very demanding job and not exactly a retirement.

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Speaker 1: It's yeah, it's a pretty rigorous system. Internally. They have

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Speaker 1: a churn of about one fifth of their workforce a

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Speaker 1: year because they practice something called up or out, which

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Speaker 1: means that you're either getting promoted or being kicked out.

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Speaker 1: Dang they know, which is another part of the lens

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Speaker 1: to their credibility.

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Speaker 2: Right yeah, Okay, no dying on the vine there, just

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Speaker 2: GTFO or you hired and promote it.

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Speaker 1: If you search on YouTube now you'll see a lot

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Speaker 1: of pretty fascinating videos from people who we're talking about

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Speaker 1: how to get through the mckenzy hiring process. Oh man,

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Speaker 1: that's Those are the number one hits, more so than

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Speaker 1: the any idea of a McKenzie cover.

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Speaker 2: Up, first step hack person that you're going to be

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Speaker 2: interviewed by.

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Speaker 1: How do you know they haven't already hacked you. How

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Speaker 1: do you know you weren't already selected?

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Speaker 2: You know what I mean.

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Speaker 1: So officially, let's look at their official stance. Officially, McKenzie

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Speaker 1: describes itself as what you said, Matt, a quote, global

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Speaker 1: management consulting firm that serves a broad mix of private, public,

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Speaker 1: and social sector institutions. So they're active in nonprofits, they're

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Speaker 1: active in private corporations, and they're active in mechanisms of

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Speaker 1: the state. It also it doesn't make a secret of

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Speaker 1: its alumni actions. It's pretty proud of the work of

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Speaker 1: its former employees.

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Speaker 2: Yeah. According to its own website, quote, alumni number more

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Speaker 2: than thirty four thousand and work in virtually every business

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Speaker 2: sector in one hundred and twenty countries. Through formal events

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Speaker 2: and informal networking, former Mackenzie consultants make and sustain professional relationships.

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Speaker 2: This dynamic network is a lasting benefit of a Mackenzie career.

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Speaker 4: So once you're in, you're in.

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Speaker 2: Ah.

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Speaker 1: Yeah, And there's another thing that's weird here. The clients

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Speaker 1: were not meant to be recruited in like a cold

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Speaker 1: call situation. As a Mackenzie person, you are expected to

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Speaker 1: be active in community events beyond the boards of things

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Speaker 1: go to religious events and religious services and informally become

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Speaker 1: friends with people people in power obviously, and then build

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Speaker 1: a relationship from there. So nepotism is nepotism, and informal

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Speaker 1: social relationships are a huge part of the process of

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Speaker 1: the workflow, wow, of the management accounting.

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Speaker 2: Yeah, do you think we've ever run into somebody from

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Speaker 2: the Mackenzie group?

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Speaker 4: I have.

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Speaker 2: Yeah, you have had one of these things from your

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Speaker 2: past life or your current life.

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Speaker 1: So at Firslance, Mackenzie appears to be a powerful multinational company.

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Speaker 4: Right.

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Speaker 1: They have interest in everything from cancer research to nonprofit initiatives,

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Speaker 1: agricultural and stuff and much much more. This is not

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Speaker 1: particularly unusual in the modern day. McKenzie is not the

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Speaker 1: only game in town here. But the thing is, critics

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Speaker 1: alleged there's much much more to Mackenzie than a shining

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Speaker 1: public image may lead you to believe.

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Speaker 2: And we'll learn about that after a quick word from

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Speaker 2: our sponsor.

442
00:26:39,800 --> 00:26:41,600
Speaker 4: Our sponsor was the McKenzie.

443
00:26:42,320 --> 00:26:44,840
Speaker 2: Yeah, this episode of stuff they don't want you to

444
00:26:44,880 --> 00:26:49,320
Speaker 2: know is brought to you by the firm.

445
00:26:49,400 --> 00:26:53,919
Speaker 1: Here's where it gets crazy. There's a net of nepotism.

446
00:26:54,000 --> 00:26:56,880
Speaker 1: That's what we're describing and much of the criticism concerning

447
00:26:57,000 --> 00:27:02,560
Speaker 1: Mackenzie comes from the activities of its former employees. We

448
00:27:03,840 --> 00:27:08,600
Speaker 1: mentioned that they have a noticeably significantly higher chance of

449
00:27:08,760 --> 00:27:15,040
Speaker 1: becoming CEOs of very prestigious companies, but they do end

450
00:27:15,160 --> 00:27:18,640
Speaker 1: up having their hands in a lot of pots, their

451
00:27:18,680 --> 00:27:21,919
Speaker 1: fingers in a lot of pies. And most of the

452
00:27:22,000 --> 00:27:26,720
Speaker 1: time that you hear someone criticizing this organization, they're going

453
00:27:26,760 --> 00:27:31,280
Speaker 1: to be talking about one of any number of scandals.

454
00:27:32,400 --> 00:27:36,080
Speaker 1: As we explore this, to be absolutely fair, we have

455
00:27:36,119 --> 00:27:39,840
Speaker 1: to point out that Mackenzie can make an argument where

456
00:27:39,880 --> 00:27:44,960
Speaker 1: they say, well, this was happening because some member of

457
00:27:45,000 --> 00:27:47,439
Speaker 1: our company or some group within our company did this,

458
00:27:47,560 --> 00:27:49,880
Speaker 1: but the company overall did not know about this.

459
00:27:50,359 --> 00:27:51,320
Speaker 4: We are unaware.

460
00:27:51,680 --> 00:27:54,720
Speaker 2: Yeah, when you have all those tendrolls, fourteen thousand of

461
00:27:54,760 --> 00:27:58,080
Speaker 2: them or so, it's hard to point the finger, and

462
00:27:58,160 --> 00:28:01,119
Speaker 2: especially if they're a consultant for or somebody else.

463
00:28:01,560 --> 00:28:06,280
Speaker 1: Right, and that that is a valid argument to make.

464
00:28:07,200 --> 00:28:12,359
Speaker 1: They'll also say that, look, we just advise these clients,

465
00:28:12,520 --> 00:28:16,840
Speaker 1: we don't decide things for them. And while that is true,

466
00:28:17,119 --> 00:28:24,800
Speaker 1: it is also true that since for years Mackenzie has

467
00:28:24,960 --> 00:28:28,600
Speaker 1: either been directly involved in or closely associated with a

468
00:28:28,800 --> 00:28:35,399
Speaker 1: number of huge scandals. Reuters even described these incidents entire

469
00:28:35,600 --> 00:28:40,000
Speaker 1: as indicative of not a few bad apples, not a

470
00:28:40,040 --> 00:28:43,400
Speaker 1: couple of unscrupulous people in the company, but instead as

471
00:28:43,520 --> 00:28:47,920
Speaker 1: a culture of corruption. So we can we can look

472
00:28:48,000 --> 00:28:49,720
Speaker 1: through a few of these and.

473
00:28:49,640 --> 00:28:50,880
Speaker 4: We'll give.

474
00:28:52,440 --> 00:28:55,880
Speaker 1: Let's give the bare bones, the one oh one, because

475
00:28:56,040 --> 00:29:02,120
Speaker 1: each of these subjects that we're about to mention, each

476
00:29:02,200 --> 00:29:05,080
Speaker 1: one is the tip of a much larger iceberg, right,

477
00:29:05,120 --> 00:29:07,240
Speaker 1: and then there's a lot going on under the water.

478
00:29:07,600 --> 00:29:09,960
Speaker 2: Let's start with South Africa, is that okay?

479
00:29:10,080 --> 00:29:10,360
Speaker 4: Yeah?

480
00:29:10,880 --> 00:29:13,640
Speaker 2: Talking about Eskom, the power company that was kind of

481
00:29:13,640 --> 00:29:14,840
Speaker 2: in dire straits at the.

482
00:29:14,800 --> 00:29:19,880
Speaker 1: Time, and Transnet as well. So the story starts with

483
00:29:20,240 --> 00:29:27,280
Speaker 1: the Gupta family, no relation to the former head of McKinzie,

484
00:29:27,320 --> 00:29:30,400
Speaker 1: a guy who also had the last name Gupta, totally unrelated.

485
00:29:30,800 --> 00:29:35,400
Speaker 1: This Gupta family's a wealthy Indian born South African family

486
00:29:36,160 --> 00:29:38,960
Speaker 1: who are best known for owning a business empire that

487
00:29:39,040 --> 00:29:43,480
Speaker 1: spans computer equipment, media mining and so on, and it

488
00:29:43,560 --> 00:29:48,040
Speaker 1: had close ties to Jacob Zuma during his presidency.

489
00:29:48,520 --> 00:29:49,400
Speaker 4: Here's what happened.

490
00:29:49,640 --> 00:29:53,680
Speaker 1: They found out the Gupta family had strategically placed corrupt

491
00:29:53,800 --> 00:29:58,520
Speaker 1: people in various parts of the South African government and

492
00:29:58,680 --> 00:30:03,520
Speaker 1: if it's infrastructure and its utility sectors, and the idea

493
00:30:03,760 --> 00:30:07,840
Speaker 1: is that McKenzie was complicit in this corruption and they

494
00:30:07,840 --> 00:30:11,440
Speaker 1: were using their connection with this family to get consulting

495
00:30:11,560 --> 00:30:15,640
Speaker 1: contracts from places like s Com and Transnet, these are

496
00:30:15,720 --> 00:30:22,360
Speaker 1: state owned companies. And then they provided they worked with

497
00:30:22,400 --> 00:30:30,000
Speaker 1: someone called Trillion Capital Partners tr ll an to provide

498
00:30:30,440 --> 00:30:34,720
Speaker 1: like seventy five million dollars worth of services, and then

499
00:30:34,800 --> 00:30:38,200
Speaker 1: Trillion got a commission off that for facilitating the business.

500
00:30:38,800 --> 00:30:44,840
Speaker 1: And then they were found I don't want to say

501
00:30:44,840 --> 00:30:52,120
Speaker 1: caught red handed, but caught pink handed, light red handed

502
00:30:53,960 --> 00:30:58,200
Speaker 1: in the midst of acts of bribery and corruption and

503
00:30:58,320 --> 00:31:05,880
Speaker 1: payments to the capital partner. And eventually South Africa's government

504
00:31:06,200 --> 00:31:10,840
Speaker 1: in early twenty eighteen found that mackenzie and Trillion had

505
00:31:10,880 --> 00:31:19,040
Speaker 1: been involved in fraud, theft, corruption and money laundering. So dang, yeah,

506
00:31:19,080 --> 00:31:22,720
Speaker 1: so this is this is a big time financial crime,

507
00:31:23,000 --> 00:31:30,200
Speaker 1: right if if it's true and the like, Okay, Mackenzie

508
00:31:30,240 --> 00:31:34,400
Speaker 1: has hired legal teams to defend them. Surprised they can

509
00:31:34,480 --> 00:31:37,600
Speaker 1: afford a ton of lawyers, right.

510
00:31:37,760 --> 00:31:40,240
Speaker 2: I know that they when they were first getting in

511
00:31:40,280 --> 00:31:42,920
Speaker 2: bed with a lot of these companies, specifically with the

512
00:31:43,040 --> 00:31:45,560
Speaker 2: s Com one, they were looking at a contract for

513
00:31:45,640 --> 00:31:48,880
Speaker 2: like seven hundred million dollars for the firm to come

514
00:31:48,920 --> 00:31:51,640
Speaker 2: in And that's just one piece of it. Working with

515
00:31:52,200 --> 00:31:55,080
Speaker 2: the people that the Gupta family was involved with, Like

516
00:31:55,160 --> 00:31:58,880
Speaker 2: the money that was was at stake, and I'm thinking

517
00:31:58,880 --> 00:32:01,880
Speaker 2: about that connected up to their values about only doing

518
00:32:01,920 --> 00:32:05,400
Speaker 2: things that they know they can do and you know,

519
00:32:05,960 --> 00:32:08,280
Speaker 2: telling the client the truth all the time and all

520
00:32:08,280 --> 00:32:11,320
Speaker 2: this stuff and not putting the money above everything else.

521
00:32:12,000 --> 00:32:14,000
Speaker 2: This feels like maybe this was a slip up where

522
00:32:14,040 --> 00:32:15,960
Speaker 2: the money was above everything else.

523
00:32:16,160 --> 00:32:18,200
Speaker 1: Is it a thing where it's not about the money though,

524
00:32:18,200 --> 00:32:20,880
Speaker 1: it's about sending a message? Because what if they felt

525
00:32:20,920 --> 00:32:28,479
Speaker 1: it was necessary to purposely cripple s Com which is

526
00:32:28,520 --> 00:32:32,600
Speaker 1: an electricity provider and Transnet, which is the rail and

527
00:32:32,680 --> 00:32:34,720
Speaker 1: pipeline firm. What if they felt it was not only

528
00:32:34,760 --> 00:32:37,040
Speaker 1: necessary to do that, but what if they felt they.

529
00:32:36,920 --> 00:32:37,440
Speaker 2: Could do it?

530
00:32:37,520 --> 00:32:40,040
Speaker 4: Well, whoa, you know what I mean.

531
00:32:40,160 --> 00:32:42,720
Speaker 2: So there was an even higher level of the playing

532
00:32:42,720 --> 00:32:43,640
Speaker 2: field that was going on.

533
00:32:43,840 --> 00:32:48,520
Speaker 1: Yeah, I don't think they accidentally did this, Matt. At

534
00:32:48,520 --> 00:32:53,320
Speaker 1: this level, it's a really tall milkshake to say that

535
00:32:53,400 --> 00:32:59,480
Speaker 1: someone just consistently screwed the pooch. Yeah, multiple times at

536
00:32:59,520 --> 00:33:02,640
Speaker 1: the perfect time to make things terrible, you.

537
00:33:02,600 --> 00:33:03,160
Speaker 4: Know what I mean.

538
00:33:03,520 --> 00:33:06,320
Speaker 1: Yeah, so maybe that was part of it. But that's

539
00:33:06,720 --> 00:33:09,360
Speaker 1: just one example, and we could probably do a whole

540
00:33:09,400 --> 00:33:14,680
Speaker 1: episode on that one. There's also the Gallean insider trading scandal.

541
00:33:14,760 --> 00:33:16,880
Speaker 1: This is where the different GROUPDA comes in. So there's

542
00:33:16,880 --> 00:33:21,560
Speaker 1: a guy named Rajat Gupta who was a former McKenzie

543
00:33:21,600 --> 00:33:25,320
Speaker 1: senior executive who was running the ship no relation again

544
00:33:25,360 --> 00:33:28,520
Speaker 1: to the Gupta family in South Africa, and a guy

545
00:33:28,600 --> 00:33:32,640
Speaker 1: named Aneil Kumar. These two guys and some others were

546
00:33:32,680 --> 00:33:37,680
Speaker 1: convicted in a government investigation into insider trading for sharing

547
00:33:37,800 --> 00:33:42,560
Speaker 1: inside information with a hedge fund owner. The owner of

548
00:33:42,600 --> 00:33:44,920
Speaker 1: a hedge fund called Galian Group a guy named raj

549
00:33:45,000 --> 00:33:49,600
Speaker 1: Raja Natrum. Although McKenzie itself the company was not accused

550
00:33:49,640 --> 00:33:53,160
Speaker 1: of any wrongdoing, the convictions were incredibly embarrassing for the

551
00:33:53,200 --> 00:33:57,720
Speaker 1: firm because it prides itself on not telling its client's

552
00:33:57,760 --> 00:34:00,280
Speaker 1: business right on client confidentiality.

553
00:34:02,360 --> 00:34:06,360
Speaker 2: There's the senior partner Anil Kumar, who described or he

554
00:34:06,440 --> 00:34:10,439
Speaker 2: has been described as the protege of Gupta. He left

555
00:34:10,480 --> 00:34:13,760
Speaker 2: the firm after these allegations started servicing in two thousand

556
00:34:13,760 --> 00:34:16,040
Speaker 2: and nine, and then he ended up pleading guilty in

557
00:34:16,160 --> 00:34:21,440
Speaker 2: January twenty ten. And it's well, okay, so while this

558
00:34:21,520 --> 00:34:24,200
Speaker 2: guy and some of the other partners had been pitching

559
00:34:24,239 --> 00:34:28,640
Speaker 2: Mackenzie's like services, they're consulting services to this Gallean group,

560
00:34:29,000 --> 00:34:34,960
Speaker 2: Kumar and this Rajaratnam fellow. They reached this, they reached

561
00:34:34,960 --> 00:34:39,080
Speaker 2: a private consulting agreement, which I'm interested in. So just

562
00:34:39,280 --> 00:34:42,279
Speaker 2: kind of behind closed doors, they reached an agreement that

563
00:34:42,440 --> 00:34:47,600
Speaker 2: violated Mackenzie's policies on confidentiality, which, okay, again we see

564
00:34:47,640 --> 00:34:50,560
Speaker 2: them kind of maybe breaking their own rules a little bit.

565
00:34:51,760 --> 00:34:54,719
Speaker 3: Yeah, Yeah, that's that's the thing.

566
00:34:54,800 --> 00:34:57,400
Speaker 2: If they really are breaking the rules. If they are

567
00:34:57,400 --> 00:35:01,560
Speaker 2: breaking the rules, are the rules just out facing, I

568
00:35:01,600 --> 00:35:02,000
Speaker 2: don't know.

569
00:35:03,120 --> 00:35:07,080
Speaker 1: So in October of twenty eleven, Gupta was arrested by

570
00:35:07,120 --> 00:35:10,759
Speaker 1: the FBI on criminal charges of sharing insider information from

571
00:35:10,760 --> 00:35:15,960
Speaker 1: these confidential board meetings with Rajaratnam. Gupta was convicted in

572
00:35:16,160 --> 00:35:19,840
Speaker 1: June of twenty twelve on four counts of conspiracy and

573
00:35:19,880 --> 00:35:23,239
Speaker 1: securities fraud, and then was acquitted on two counts. So

574
00:35:23,960 --> 00:35:27,319
Speaker 1: he did ultimately get found guilty of some stuff. And

575
00:35:27,440 --> 00:35:32,759
Speaker 1: the big questions here are things like how aware was

576
00:35:32,920 --> 00:35:39,080
Speaker 1: mackenzie and company of this activity? Were they somehow complicit?

577
00:35:39,719 --> 00:35:40,160
Speaker 3: Were they?

578
00:35:41,680 --> 00:35:46,400
Speaker 1: Was he relying on the network in to some degree?

579
00:35:46,480 --> 00:35:49,480
Speaker 1: The answer is probably yes, yeah.

580
00:35:49,320 --> 00:35:52,080
Speaker 2: I would, I would think so. And it's a weird great,

581
00:35:52,280 --> 00:35:55,760
Speaker 2: it's not great, but it feels like a gray area here.

582
00:35:55,840 --> 00:36:01,120
Speaker 2: Insider trading this idea that if you have these close

583
00:36:01,160 --> 00:36:05,200
Speaker 2: connections between the company that is valued at a certain

584
00:36:05,239 --> 00:36:08,120
Speaker 2: amount that you're betting on is going to increase in value,

585
00:36:08,160 --> 00:36:12,360
Speaker 2: and then you're a hedge fund owner that is placing

586
00:36:12,360 --> 00:36:17,560
Speaker 2: those values, and somehow you've got this consultancy group that

587
00:36:17,600 --> 00:36:21,680
Speaker 2: perhaps touches both things. I don't know that it puts

588
00:36:21,719 --> 00:36:27,040
Speaker 2: tremendous power in that third party that has that connection,

589
00:36:27,719 --> 00:36:30,880
Speaker 2: because if you want to, you can pull those strings,

590
00:36:31,320 --> 00:36:35,040
Speaker 2: or you can threaten to pull those strings. I don't

591
00:36:35,080 --> 00:36:39,319
Speaker 2: know that. Hmm. They just got caught, that's it. They

592
00:36:39,360 --> 00:36:43,160
Speaker 2: got caught doing what what? Maybe they're kind.

593
00:36:43,040 --> 00:36:45,600
Speaker 1: Of set up to do Ben, That's the thing. So

594
00:36:46,520 --> 00:36:53,160
Speaker 1: insider trading is so atast at least in our country

595
00:36:53,160 --> 00:36:58,839
Speaker 1: here in the United States, insider trading is such a

596
00:36:59,000 --> 00:37:00,759
Speaker 1: hazy concept.

597
00:37:00,880 --> 00:37:04,840
Speaker 2: Yeah, you know, yeah, because it's not you sharing anything

598
00:37:04,920 --> 00:37:08,440
Speaker 2: necessarily in this setup. You know, in a way, it's

599
00:37:08,480 --> 00:37:12,920
Speaker 2: a consultancy group, it's a partner that it's connected, but

600
00:37:13,000 --> 00:37:14,200
Speaker 2: really not that connected.

601
00:37:14,360 --> 00:37:19,600
Speaker 1: And at this level the laws are pretty rigorous about this,

602
00:37:19,680 --> 00:37:25,720
Speaker 1: but they can also be fairly complicated. So insider trading

603
00:37:26,400 --> 00:37:31,880
Speaker 1: occurs all the time in the United States. For a while,

604
00:37:32,080 --> 00:37:35,279
Speaker 1: for long time, actually, members of the US Congress were

605
00:37:35,280 --> 00:37:40,480
Speaker 1: not subject to the same insider trading laws that everybody

606
00:37:40,480 --> 00:37:43,160
Speaker 1: else was in theories subject to.

607
00:37:44,239 --> 00:37:47,400
Speaker 2: That checks out. Man. Sure, if you're in the Senate,

608
00:37:47,400 --> 00:37:49,840
Speaker 2: you gotta be able to grease those poems somehow, and

609
00:37:49,960 --> 00:37:51,920
Speaker 2: if you could do it on your own time, and

610
00:37:51,960 --> 00:37:54,480
Speaker 2: it's not somebody else greasing your palm. Wait, nope, it

611
00:37:54,560 --> 00:37:57,000
Speaker 2: is somebody else. Oh wait, oh it's corruption. Oh god,

612
00:37:57,160 --> 00:37:57,560
Speaker 2: oh no.

613
00:37:57,960 --> 00:38:00,680
Speaker 4: Some of us are more well than others.

614
00:38:00,760 --> 00:38:05,239
Speaker 1: Right, yeah, So let's pause here for a word from

615
00:38:05,239 --> 00:38:11,320
Speaker 1: our sponsor and return to some more tales from the

616
00:38:11,440 --> 00:38:13,920
Speaker 1: Black Book of the McKenzie Company.

617
00:38:13,960 --> 00:38:15,359
Speaker 2: Get ready for Enron. It's coming.

618
00:38:22,520 --> 00:38:24,840
Speaker 1: We're back in how pressing And yes, you are correct,

619
00:38:25,080 --> 00:38:28,880
Speaker 1: my friends, en Ron. So Enron was the creation of

620
00:38:28,880 --> 00:38:33,719
Speaker 1: a guy named Jeff's Skilling. Jeff's Skilling was a McKenzie

621
00:38:33,719 --> 00:38:38,239
Speaker 1: consultant for twenty one years, and when Enron collapsed, he

622
00:38:38,520 --> 00:38:42,160
Speaker 1: actually went to jail. Yes, he did, relatively rare for

623
00:38:42,160 --> 00:38:47,600
Speaker 1: a lot of financial crimes. McKenzie reportedly fully endorsed the

624
00:38:47,800 --> 00:38:51,200
Speaker 1: dubious accounting methods that caused the company to implode in

625
00:38:51,239 --> 00:38:56,520
Speaker 1: two thousand and one, and Enron reportedly used McKenzie for

626
00:38:56,719 --> 00:39:02,640
Speaker 1: twenty different projects, and it became a situation where McKenzie

627
00:39:02,640 --> 00:39:05,160
Speaker 1: consultants would say, you know what, and Ron is kind

628
00:39:05,200 --> 00:39:07,960
Speaker 1: of a sandbox for us. Let's just let's shake things up.

629
00:39:08,000 --> 00:39:11,000
Speaker 1: Let's roll the dice, make it interesting. Vegas, baby, Yeah,

630
00:39:11,080 --> 00:39:13,120
Speaker 1: let's see what we can do we can get away with.

631
00:39:13,320 --> 00:39:15,920
Speaker 1: Does this make money if we just say this or

632
00:39:15,960 --> 00:39:18,160
Speaker 1: we just do this. It's pretty brilliant.

633
00:39:18,239 --> 00:39:22,480
Speaker 2: And if you've ever seen the documentary it's called Enron

634
00:39:22,520 --> 00:39:25,160
Speaker 2: The Smartest Guys in the Room. I would recommend it highly.

635
00:39:25,200 --> 00:39:26,919
Speaker 2: Go check it out if you get a chance. Find

636
00:39:26,960 --> 00:39:31,319
Speaker 2: it somewhere. We have we done an Enron episode, I

637
00:39:31,320 --> 00:39:33,920
Speaker 2: don't think. I don't know if we have. We've talked

638
00:39:33,920 --> 00:39:36,440
Speaker 2: about it a lot. I think it's worth it, like

639
00:39:36,600 --> 00:39:38,840
Speaker 2: just taking this, expanding it out in a whole episode,

640
00:39:38,880 --> 00:39:41,879
Speaker 2: just because there are a lot of details in here

641
00:39:42,320 --> 00:39:44,680
Speaker 2: about the weirdness that occurred there.

642
00:39:45,400 --> 00:39:49,640
Speaker 1: Right, Okay, so the a high level, quick and dirty

643
00:39:49,680 --> 00:39:55,400
Speaker 1: look at this. Enron was the largest bankruptcy reorganization in

644
00:39:55,400 --> 00:39:58,520
Speaker 1: American history at its time. It was also called the

645
00:39:58,520 --> 00:40:02,640
Speaker 1: biggest failure of an audit. The scandal went public in

646
00:40:02,719 --> 00:40:06,680
Speaker 1: October two thousand and one. Enron was an energy company

647
00:40:06,719 --> 00:40:11,440
Speaker 1: based in Houston, Texas, and it was formed in nineteen

648
00:40:11,560 --> 00:40:12,320
Speaker 1: eighty five.

649
00:40:13,800 --> 00:40:15,440
Speaker 2: See, you're doing the whole episode right now. This is

650
00:40:15,440 --> 00:40:18,040
Speaker 2: a whole episode, bet Yeah. Sorry, it's like the hero

651
00:40:18,080 --> 00:40:20,200
Speaker 2: of the Facts section. Yeah, I can feel it.

652
00:40:20,280 --> 00:40:22,400
Speaker 4: Yeah, Well, a lot of people went to jail.

653
00:40:25,000 --> 00:40:25,719
Speaker 2: It had.

654
00:40:27,960 --> 00:40:33,719
Speaker 1: Until I think until WorldCom went bankrupt the very next year.

655
00:40:34,680 --> 00:40:38,440
Speaker 1: Enron was the largest corporate bankruptcy in history because I

656
00:40:38,480 --> 00:40:41,120
Speaker 1: think it was valued at sixty three point four billion

657
00:40:41,200 --> 00:40:43,200
Speaker 1: dollars and then it all went could put.

658
00:40:43,760 --> 00:40:45,480
Speaker 2: Yeah, just.

659
00:40:46,320 --> 00:40:48,919
Speaker 3: So maybe we'll do an run episode. Yeah, that should

660
00:40:48,960 --> 00:40:49,760
Speaker 3: be worth it.

661
00:40:49,280 --> 00:40:52,160
Speaker 2: It might be dry a little bit, but I think

662
00:40:52,200 --> 00:40:54,440
Speaker 2: we can pull some stuff out of there, just from

663
00:40:55,400 --> 00:40:59,640
Speaker 2: I in the insanity of our financial systems, like as

664
00:40:59,680 --> 00:41:04,320
Speaker 2: they were with the energy companies and the actual energy

665
00:41:04,360 --> 00:41:07,960
Speaker 2: prices and just all of these the way it's all interconnected.

666
00:41:07,560 --> 00:41:10,920
Speaker 1: Right, the way that sometimes to turn a larger profit.

667
00:41:13,000 --> 00:41:18,319
Speaker 1: We will have tankers of oil waiting just off the

668
00:41:18,360 --> 00:41:22,680
Speaker 1: coast right. Yes, that's happening before, full of them. I

669
00:41:22,719 --> 00:41:26,239
Speaker 1: mean that's you know, during the depression, people were starving

670
00:41:26,280 --> 00:41:30,880
Speaker 1: to death in urban areas while farmers were just slaughtering

671
00:41:30,920 --> 00:41:34,600
Speaker 1: pigs wholesale and then throwing milk in a creek in

672
00:41:34,640 --> 00:41:36,360
Speaker 1: an attempt to raise the prices.

673
00:41:37,320 --> 00:41:38,440
Speaker 2: Burn that wheatfield. Man.

674
00:41:38,840 --> 00:41:41,319
Speaker 1: This is the point where a consultant would come in

675
00:41:41,400 --> 00:41:43,719
Speaker 1: and say, hey, we can improve this workflow.

676
00:41:43,840 --> 00:41:45,799
Speaker 4: Oh, and they might be right, you know what I mean.

677
00:41:45,840 --> 00:41:48,960
Speaker 1: There's a reason that the consultancy industry exists.

678
00:41:49,000 --> 00:41:51,520
Speaker 2: If only the peaky blinders excuse me, the McKenzie group

679
00:41:51,520 --> 00:41:53,719
Speaker 2: were around back then. Wait not.

680
00:41:56,160 --> 00:41:59,480
Speaker 1: So in two thousand and eight, do you remember the

681
00:41:59,520 --> 00:42:00,680
Speaker 1: financial crisis?

682
00:42:01,080 --> 00:42:03,839
Speaker 2: Oh do I You.

683
00:42:03,840 --> 00:42:04,799
Speaker 4: Have a tattoo of it?

684
00:42:05,120 --> 00:42:08,560
Speaker 2: Yeah, yeah, I really do think that just everything that happened,

685
00:42:08,600 --> 00:42:12,000
Speaker 2: and there's that's crazy because the tattoo, it's just nothing

686
00:42:12,040 --> 00:42:15,320
Speaker 2: because nothing changed. Bleak.

687
00:42:15,480 --> 00:42:16,000
Speaker 4: I love it.

688
00:42:16,560 --> 00:42:24,920
Speaker 1: So McKenzie. Mackenzie gets accused of being a prime mover

689
00:42:25,360 --> 00:42:31,560
Speaker 1: in the financial crisis, which because they were allegedly promoting

690
00:42:31,640 --> 00:42:37,840
Speaker 1: the securitization of mortgage assets and asking banks to fund

691
00:42:38,000 --> 00:42:42,600
Speaker 1: their operations with a lot of debt, and according to

692
00:42:42,880 --> 00:42:45,200
Speaker 1: you know, their critics, this led to a poisoning of

693
00:42:45,239 --> 00:42:52,360
Speaker 1: the global financial system and created ultimately that two thousand

694
00:42:52,360 --> 00:42:56,400
Speaker 1: and eight meltdown. There's a great article on this. There

695
00:42:56,400 --> 00:42:58,840
Speaker 1: are several great articles on this, but one that will

696
00:42:58,880 --> 00:43:02,600
Speaker 1: mention the financial crisis a little bit more detail is

697
00:43:02,760 --> 00:43:04,880
Speaker 1: mackenzie How does it Always get Away with It? By

698
00:43:04,880 --> 00:43:09,799
Speaker 1: a guy named Ben Cheu writing for The Independent, And

699
00:43:11,800 --> 00:43:17,000
Speaker 1: what the eventually came out in the wash about this

700
00:43:18,600 --> 00:43:24,080
Speaker 1: was something incredibly despicable that ties in with their activities

701
00:43:24,160 --> 00:43:29,600
Speaker 1: with insurance. So McKenzie and company sold major insurers at

702
00:43:29,920 --> 00:43:33,640
Speaker 1: places like Ulstate a new business model that was designed

703
00:43:33,640 --> 00:43:38,399
Speaker 1: to turn claims into profits. Their strategy was known as

704
00:43:38,520 --> 00:43:44,359
Speaker 1: good hands or boxing gloves, and yeah, this really came

705
00:43:44,400 --> 00:43:48,600
Speaker 1: into the public eye during some during Hurricane Katrina.

706
00:43:49,840 --> 00:43:51,120
Speaker 4: The idea was that.

707
00:43:52,600 --> 00:43:56,440
Speaker 1: Internally we would aim to make the process of filing

708
00:43:56,480 --> 00:44:00,360
Speaker 1: for claims too difficult for people who were policyhols holders

709
00:44:00,600 --> 00:44:03,480
Speaker 1: and too expensive and time consuming for lawyers to want

710
00:44:03,520 --> 00:44:07,759
Speaker 1: to take the case leaving insurance firms undisputed as they

711
00:44:07,840 --> 00:44:12,759
Speaker 1: delayed or denied claims. Here's how the model worked. This

712
00:44:12,960 --> 00:44:17,760
Speaker 1: is incredibly unethical. They would offer a deliberately lower settlement

713
00:44:17,880 --> 00:44:21,160
Speaker 1: to any policyholder who files a claim, much lower than

714
00:44:21,200 --> 00:44:25,000
Speaker 1: they're actually entitled to according to what their insurance agreement is.

715
00:44:26,080 --> 00:44:29,200
Speaker 1: If you accept the lower payment, then boom, your claim

716
00:44:29,239 --> 00:44:33,919
Speaker 1: is resolved lickety split. If you say, hey, this says

717
00:44:33,960 --> 00:44:36,759
Speaker 1: that I'm supposed to have X amount of cash. Why

718
00:44:36,760 --> 00:44:39,640
Speaker 1: did you give me why amount of money, they will

719
00:44:39,680 --> 00:44:44,080
Speaker 1: say we have to. If you're denying the settlement, we

720
00:44:44,239 --> 00:44:48,040
Speaker 1: have to process this claim, and that will be delayed

721
00:44:48,239 --> 00:44:53,080
Speaker 1: and delayed and delayed forever until the policy holders are

722
00:44:53,160 --> 00:44:56,040
Speaker 1: finally forced to accept the payment or just give up

723
00:44:56,120 --> 00:44:56,840
Speaker 1: all together.

724
00:44:57,600 --> 00:44:58,280
Speaker 2: That's brutal.

725
00:44:58,680 --> 00:45:03,160
Speaker 1: In addition to this, a guy named nov Deep Aurora

726
00:45:03,239 --> 00:45:07,280
Speaker 1: was convicted for a legally depleting state farm of over

727
00:45:07,480 --> 00:45:10,200
Speaker 1: five hundred thousand dollars over a period of eight years

728
00:45:10,600 --> 00:45:13,840
Speaker 1: in cahoots with a state farm employee. So, in addition

729
00:45:14,000 --> 00:45:20,400
Speaker 1: to creating this model that says, hey, you're an insurance company,

730
00:45:21,320 --> 00:45:24,640
Speaker 1: don't do your job and try to build people out

731
00:45:24,680 --> 00:45:26,799
Speaker 1: of it and then pay us for telling you to

732
00:45:26,840 --> 00:45:30,320
Speaker 1: do that. Certain employees were also stealing money from the company.

733
00:45:30,320 --> 00:45:35,680
Speaker 2: In addition, God no thank you, Yeah, no thanks.

734
00:45:36,280 --> 00:45:42,520
Speaker 1: They've also been associated with pharmaceutical I don't know if

735
00:45:42,560 --> 00:45:47,200
Speaker 1: you call them scandals but controversies. There's a company called Valiant,

736
00:45:47,239 --> 00:45:50,560
Speaker 1: a Canadian pharmaceutical company that was investigated by the SEC.

737
00:45:50,960 --> 00:45:55,000
Speaker 1: They've been accused of cooking their books and of using

738
00:45:55,080 --> 00:46:01,359
Speaker 1: predatory price hikes to boost growth. The Financial Times an

739
00:46:01,360 --> 00:46:04,920
Speaker 1: intriguing statement here, Matt. They said Valiant's downfall is not

740
00:46:05,040 --> 00:46:08,520
Speaker 1: exactly McKenzie's fault, but its fingerprints are everywhere.

741
00:46:09,080 --> 00:46:14,080
Speaker 2: Geez okay, yeah, I mean what do you do with that?

742
00:46:14,320 --> 00:46:17,080
Speaker 1: Three out of six of the senior execs were recent

743
00:46:17,160 --> 00:46:23,000
Speaker 1: McKenzie employees, and the chair of the talent and compensation

744
00:46:23,120 --> 00:46:25,000
Speaker 1: committee was also an ex McKenzie.

745
00:46:25,400 --> 00:46:30,680
Speaker 2: It feels like McKenzie has this like part time upright

746
00:46:30,719 --> 00:46:33,920
Speaker 2: citizens Brigade gig where they go around like the Move,

747
00:46:34,040 --> 00:46:36,439
Speaker 2: like the TV show, not like just the improv group,

748
00:46:36,760 --> 00:46:40,880
Speaker 2: where they're just wreaking havoc everywhere in chaos on purpose,

749
00:46:41,040 --> 00:46:42,560
Speaker 2: just to see what they can get away with.

750
00:46:43,520 --> 00:46:46,399
Speaker 1: Yeah, it sounds like that, and we have to ask

751
00:46:46,480 --> 00:46:50,919
Speaker 1: if we're just hearing about the bad cases that made

752
00:46:50,920 --> 00:46:51,520
Speaker 1: it to court.

753
00:46:51,680 --> 00:46:54,319
Speaker 2: We most certainly are, I think that's without a doubt.

754
00:46:54,360 --> 00:46:58,560
Speaker 2: But the bad cases are pretty.

755
00:46:57,920 --> 00:47:01,200
Speaker 1: Bad, and would the cases that are can considered successful

756
00:47:01,560 --> 00:47:07,040
Speaker 1: for the client and the company be considered successful for

757
00:47:07,280 --> 00:47:11,440
Speaker 1: other people where they publicized because this kind of company

758
00:47:11,520 --> 00:47:15,279
Speaker 1: can do multiple things. But one of the things a

759
00:47:15,360 --> 00:47:18,239
Speaker 1: consultancy is often going to be associated with is quote

760
00:47:18,320 --> 00:47:25,120
Speaker 1: unquote streamlining fire the workforce, pay the pay the upper

761
00:47:25,200 --> 00:47:30,239
Speaker 1: level management more or give them a sweetheart, golden parachute

762
00:47:30,239 --> 00:47:33,480
Speaker 1: walkaway deal kind of thing. And their competitors have also

763
00:47:33,600 --> 00:47:36,680
Speaker 1: complained about unfair business practices. There was a court case

764
00:47:36,719 --> 00:47:40,919
Speaker 1: in twenty eighteen Mackenzie went to Quart of allegations from

765
00:47:40,920 --> 00:47:47,920
Speaker 1: competitors that was purposely misleading or misinforming clients by not

766
00:47:48,120 --> 00:47:52,520
Speaker 1: telling the whole truth essentially or as little of the

767
00:47:52,560 --> 00:47:55,600
Speaker 1: truth as they could get away with, because it wouldn't

768
00:47:57,480 --> 00:48:04,120
Speaker 1: it wouldn't disclose conflict like conflicts of interest, and this

769
00:48:04,200 --> 00:48:06,879
Speaker 1: comes into play later, right, So like if you are

770
00:48:08,000 --> 00:48:10,959
Speaker 1: what's the easiest way to put it, Okay, let's say that.

771
00:48:13,840 --> 00:48:16,719
Speaker 4: I'm McKenzie group, and.

772
00:48:18,360 --> 00:48:19,480
Speaker 3: You are a.

773
00:48:21,600 --> 00:48:29,960
Speaker 1: Credit here, a financier, and you hire me to bail out.

774
00:48:31,680 --> 00:48:37,120
Speaker 1: Let's say Noel has a bankrupt headphone company. The headphone

775
00:48:37,160 --> 00:48:42,520
Speaker 1: mill is in trouble and it's bankrupt. You're in charge

776
00:48:42,840 --> 00:48:47,560
Speaker 1: of how this bankruptcy happens. You go to me McKenzie

777
00:48:47,719 --> 00:48:50,879
Speaker 1: and say, here's a couple mil, here's a cool, cool

778
00:48:50,920 --> 00:48:53,879
Speaker 1: few mil. What's the best way to restructure this? How

779
00:48:53,880 --> 00:48:56,440
Speaker 1: do we determine who gets paid what? And I say,

780
00:48:56,480 --> 00:48:59,120
Speaker 1: all right, I've got the perfect plan, but I don't

781
00:48:59,160 --> 00:49:03,040
Speaker 1: tell you that as you and I were cracking this deal,

782
00:49:03,560 --> 00:49:07,239
Speaker 1: I went through a different company and bought up a

783
00:49:07,239 --> 00:49:11,319
Speaker 1: ton of this debt. So now what I'm doing is saying, well,

784
00:49:11,360 --> 00:49:16,400
Speaker 1: you got to pay that or not been incorporated first.

785
00:49:16,200 --> 00:49:16,839
Speaker 4: You know what I mean?

786
00:49:17,239 --> 00:49:17,560
Speaker 2: Definitely?

787
00:49:17,640 --> 00:49:20,719
Speaker 1: And then so like, okay, well you're the expert, and

788
00:49:20,760 --> 00:49:22,919
Speaker 1: so you have not been incorporated first. Then on top

789
00:49:22,960 --> 00:49:25,000
Speaker 1: of that, cool mill, I've got all this other money

790
00:49:25,440 --> 00:49:30,200
Speaker 1: with you know. That's that's a very very very oversimplified

791
00:49:30,280 --> 00:49:32,719
Speaker 1: version of how that kind of thing would work. It's

792
00:49:32,760 --> 00:49:34,680
Speaker 1: also illegal.

793
00:49:35,600 --> 00:49:38,160
Speaker 2: Then you can see why, yeah it is. I'm just

794
00:49:38,200 --> 00:49:45,000
Speaker 2: having this thought here. This is such a rich person's thing,

795
00:49:45,440 --> 00:49:48,720
Speaker 2: this idea of a consultant in this way, this type

796
00:49:48,719 --> 00:49:51,680
Speaker 2: of partner. And that's why it exists at these higher

797
00:49:51,760 --> 00:49:55,879
Speaker 2: levels with only CEOs, only the top levels of the

798
00:49:56,200 --> 00:50:02,000
Speaker 2: white collar amongst the world. Here of paying somebody a

799
00:50:02,040 --> 00:50:04,279
Speaker 2: lot of money to figure out how you need to

800
00:50:04,880 --> 00:50:09,280
Speaker 2: structure your payments for something because you've got this massive

801
00:50:09,280 --> 00:50:11,759
Speaker 2: amount of money that needs to go out in these

802
00:50:11,760 --> 00:50:14,279
Speaker 2: different places. You've got this massive amount of money that

803
00:50:14,320 --> 00:50:19,360
Speaker 2: needs to be shuttled along in some way. But I

804
00:50:19,360 --> 00:50:23,120
Speaker 2: don't have time for that with all this money. I'm

805
00:50:23,160 --> 00:50:24,839
Speaker 2: going to bring somebody else in to do it. And

806
00:50:25,000 --> 00:50:28,160
Speaker 2: no wonder like corruption, even just to the amount we're

807
00:50:28,160 --> 00:50:32,200
Speaker 2: discussing here, occurs when you're talking about that level of

808
00:50:32,239 --> 00:50:35,239
Speaker 2: money my got, somebody is going to think about themselves.

809
00:50:36,760 --> 00:50:42,239
Speaker 1: And again this is a huge company. So yeah, in

810
00:50:42,280 --> 00:50:45,719
Speaker 1: their defense, they're saying, well, look if something happens and

811
00:50:46,080 --> 00:50:51,760
Speaker 1: it's illegal or it's incorrect, then we will we will

812
00:50:51,840 --> 00:50:52,279
Speaker 1: fix it.

813
00:50:52,719 --> 00:50:55,200
Speaker 2: Yeah. No, absolutely, not speaking against the company. I just

814
00:50:55,239 --> 00:50:58,200
Speaker 2: think it's that is human nature when you're dealing with

815
00:50:58,239 --> 00:51:00,920
Speaker 2: this kind of thing. Oh yeah, yeah, yeah yeah.

816
00:51:01,840 --> 00:51:07,200
Speaker 1: So just for an example, they said that they wanted

817
00:51:07,239 --> 00:51:13,799
Speaker 1: to they overhauled their South Africa office apparently after US

818
00:51:14,880 --> 00:51:20,160
Speaker 1: dealing such debilitating damage to es Common and Transnet and

819
00:51:20,200 --> 00:51:24,840
Speaker 1: then the stories continued. So in the case of the

820
00:51:24,960 --> 00:51:30,360
Speaker 1: US Immigrations and Customs Enforcement or ICE, mackenzie stopped working

821
00:51:30,400 --> 00:51:32,440
Speaker 1: with them after it was disclosed the firm had done

822
00:51:32,480 --> 00:51:35,479
Speaker 1: more than twenty million dollars worth of consulting work for

823
00:51:35,520 --> 00:51:38,920
Speaker 1: the agency. And this is where we hear an explicit

824
00:51:39,040 --> 00:51:42,480
Speaker 1: version of that defense, a managing partner said the contract,

825
00:51:42,920 --> 00:51:46,040
Speaker 1: which was not widely known until The New York Times

826
00:51:46,080 --> 00:51:49,600
Speaker 1: reported it to people in the company itself. According to them,

827
00:51:49,960 --> 00:51:52,840
Speaker 1: he said, it had rightly raised concerns, so they're not

828
00:51:52,840 --> 00:51:53,760
Speaker 1: going to do it anymore.

829
00:51:54,080 --> 00:51:57,719
Speaker 2: That is odd for ICE to be having a relationship

830
00:51:57,760 --> 00:51:59,800
Speaker 2: with McKenzie.

831
00:52:00,120 --> 00:52:00,839
Speaker 4: Why is it?

832
00:52:01,280 --> 00:52:07,400
Speaker 5: Why PR? They're not a PR firm. It could be workflow,

833
00:52:08,800 --> 00:52:11,160
Speaker 5: I guess. So it could be something along the lines

834
00:52:11,200 --> 00:52:15,560
Speaker 5: of how do we move the most people?

835
00:52:15,680 --> 00:52:20,880
Speaker 1: How do we uh, oh, that's interesting, like monitoring of

836
00:52:20,920 --> 00:52:24,160
Speaker 1: a border or something, or what is our process for

837
00:52:25,600 --> 00:52:27,480
Speaker 1: It could be something as innocuous as how do we

838
00:52:27,560 --> 00:52:28,520
Speaker 1: handle records?

839
00:52:28,640 --> 00:52:31,040
Speaker 2: You know what I mean? And so any number of things.

840
00:52:31,040 --> 00:52:33,480
Speaker 2: It could be and just setting up facilities that kind

841
00:52:33,480 --> 00:52:35,120
Speaker 2: of thing. I wonder if that had anything to do

842
00:52:35,120 --> 00:52:35,760
Speaker 2: with interesting.

843
00:52:37,239 --> 00:52:41,720
Speaker 4: So one. One other one that we would be.

844
00:52:43,239 --> 00:52:46,200
Speaker 1: Remiss if we didn't touch on is McKenzie's work with

845
00:52:46,320 --> 00:52:52,279
Speaker 1: authoritarian regimes and business and policy support for regimes. It

846
00:52:52,320 --> 00:52:56,840
Speaker 1: comes in the news every so often, and again, longtime listeners,

847
00:52:56,840 --> 00:53:00,320
Speaker 1: you'll recall that regime is the word people use instead

848
00:53:00,360 --> 00:53:03,359
Speaker 1: of government when they don't want to, when they don't

849
00:53:03,400 --> 00:53:07,480
Speaker 1: want you to think another country's government is legitimate. Yeah,

850
00:53:07,840 --> 00:53:11,120
Speaker 1: so North Korea calls the US government the US regime,

851
00:53:11,640 --> 00:53:15,320
Speaker 1: and the US calls North Korea the North Korean regime.

852
00:53:15,960 --> 00:53:16,520
Speaker 2: Absolutely.

853
00:53:16,680 --> 00:53:18,960
Speaker 1: So if you ever want to know how your country

854
00:53:19,000 --> 00:53:22,600
Speaker 1: feels about another country, just see who they see who.

855
00:53:22,480 --> 00:53:23,360
Speaker 4: They call a regime.

856
00:53:23,800 --> 00:53:24,160
Speaker 2: It is.

857
00:53:24,239 --> 00:53:25,279
Speaker 4: It is such.

858
00:53:26,840 --> 00:53:29,800
Speaker 1: A simplistic shortcut, but I guarantee you it works.

859
00:53:29,960 --> 00:53:34,080
Speaker 2: It's very true. And now I'm seeing it in my head.

860
00:53:34,560 --> 00:53:35,120
Speaker 2: Oh god.

861
00:53:35,200 --> 00:53:38,080
Speaker 1: It doesn't mean those countries are automatically I legitimate. No,

862
00:53:38,360 --> 00:53:42,719
Speaker 1: you know how your rulers feel about them, the Iranian

863
00:53:42,760 --> 00:53:47,640
Speaker 1: regime for sure. Right, these are the phrases they get

864
00:53:47,680 --> 00:53:49,839
Speaker 1: thrown around. And I'm sure there's plenty of we were

865
00:53:49,880 --> 00:53:52,319
Speaker 1: always at war with East Asia kind of stuff going

866
00:53:52,360 --> 00:53:57,799
Speaker 1: on there too, But in Mackenzie's case, they popped up

867
00:53:57,800 --> 00:54:01,480
Speaker 1: in the news quite recently in Somember of twenty eighteen,

868
00:54:01,680 --> 00:54:04,840
Speaker 1: because there was this big company retreat in China and

869
00:54:04,880 --> 00:54:08,880
Speaker 1: it was held next to the Chinese government and tournament

870
00:54:08,920 --> 00:54:13,400
Speaker 1: camps where thousands of wigers are being detained as we speak.

871
00:54:13,400 --> 00:54:16,640
Speaker 1: And we did an episode on this earlier in modern

872
00:54:16,800 --> 00:54:18,080
Speaker 1: concentration camps.

873
00:54:18,600 --> 00:54:22,919
Speaker 2: Yeah, that's an odd place to have your lavish retreat. Oh,

874
00:54:22,920 --> 00:54:25,799
Speaker 2: and we also have a list here of I guess

875
00:54:25,800 --> 00:54:30,000
Speaker 2: some prominent clients that McKenzie's worked for. Let's see the

876
00:54:30,040 --> 00:54:33,080
Speaker 2: Saudi Arabia regime. No, I'm just kidding, it's the monarchy there,

877
00:54:33,840 --> 00:54:39,560
Speaker 2: Turkey's autocratic leader erdign And let's see, Oh, the president

878
00:54:39,600 --> 00:54:45,239
Speaker 2: of Ukraine who was ousted as a former president, Victor Yanokovich.

879
00:54:45,360 --> 00:54:49,040
Speaker 2: I believe at Yankovich. That's it. And then several other

880
00:54:49,200 --> 00:54:53,239
Speaker 2: Chinese and Russian companies who are under or were under sanctions,

881
00:54:53,520 --> 00:54:57,160
Speaker 2: heavy sanctions at the time. People. So mackenzie just sweeps

882
00:54:57,200 --> 00:54:59,759
Speaker 2: in and says, you guys need some help. Well, guess

883
00:54:59,800 --> 00:55:01,680
Speaker 2: what this hand. It's very helpful.

884
00:55:02,600 --> 00:55:06,320
Speaker 1: And don't worry. It doesn't know what the left hand does, right.

885
00:55:06,239 --> 00:55:08,120
Speaker 2: Or at least it doesn't talk to the left hand.

886
00:55:08,239 --> 00:55:11,640
Speaker 4: Oh, Marita my friends. Yeah, so let's.

887
00:55:11,440 --> 00:55:13,520
Speaker 2: Its say trading. If it's a trading thing, then we

888
00:55:13,560 --> 00:55:14,520
Speaker 2: can make something happen.

889
00:55:14,760 --> 00:55:14,960
Speaker 4: Right.

890
00:55:15,360 --> 00:55:20,200
Speaker 1: So what we're exploring then, or what we have explored today,

891
00:55:20,600 --> 00:55:25,239
Speaker 1: is the story of a company that operates largely out

892
00:55:25,239 --> 00:55:30,440
Speaker 1: of the headlines the halls of power. It's it's a

893
00:55:30,560 --> 00:55:33,600
Speaker 1: power behind the throne, you know, sort of this corporate

894
00:55:33,719 --> 00:55:43,000
Speaker 1: vizier that advises companies, corporations, countries and power, and many

895
00:55:43,080 --> 00:55:48,880
Speaker 1: times it comes into conflict with the law, with various

896
00:55:48,880 --> 00:55:53,280
Speaker 1: countries legal systems. So the question is are we seeing

897
00:55:53,520 --> 00:55:56,560
Speaker 1: just the bad stuff or we are we only hearing

898
00:55:56,600 --> 00:56:00,600
Speaker 1: about McKenzie when there's a problem. Well, we are hearing

899
00:56:00,840 --> 00:56:04,560
Speaker 1: a lot about McKenzie's problems when they pop up, and

900
00:56:04,640 --> 00:56:07,319
Speaker 1: there does seem to be a pattern. Are we being

901
00:56:07,600 --> 00:56:12,240
Speaker 1: unfair when we say that this organization is committing crime

902
00:56:12,480 --> 00:56:16,399
Speaker 1: or our journalists being unfair when they say that we'd

903
00:56:16,480 --> 00:56:18,920
Speaker 1: like to We'd like to hear from you, So let

904
00:56:19,040 --> 00:56:21,200
Speaker 1: us know what you think of this in the meantime,

905
00:56:21,239 --> 00:56:25,560
Speaker 1: For conclusions, McKenzie is not going away anytime soon. We

906
00:56:25,600 --> 00:56:29,720
Speaker 1: are not kicking someone while they're down in any way,

907
00:56:30,400 --> 00:56:34,760
Speaker 1: and from their perspective again, they don't actually do these things.

908
00:56:34,800 --> 00:56:38,399
Speaker 1: They advise clients, the clients take it from there, but

909
00:56:38,440 --> 00:56:41,640
Speaker 1: not everyone's buying this. One last note in January of

910
00:56:41,680 --> 00:56:46,280
Speaker 1: twenty nineteen, this month, a bankruptcy case just got reopened

911
00:56:46,560 --> 00:56:50,680
Speaker 1: here in the US allegid McKenzie was illegally making money

912
00:56:50,680 --> 00:56:54,239
Speaker 1: off bankruptcy cases it became involved with, and more so

913
00:56:54,320 --> 00:56:57,960
Speaker 1: than it has established a pattern of doing this, that

914
00:56:58,040 --> 00:57:01,080
Speaker 1: this is not a one off thing but something more

915
00:57:01,080 --> 00:57:03,239
Speaker 1: akin to a business practice.

916
00:57:03,719 --> 00:57:07,840
Speaker 2: Yeah. Absolutely, I'm just putting this out here. This whole

917
00:57:07,880 --> 00:57:10,560
Speaker 2: story reminds me of a movie that I saw way

918
00:57:10,560 --> 00:57:12,560
Speaker 2: back well when I say, way back in the day,

919
00:57:12,640 --> 00:57:17,680
Speaker 2: over ten years ago, called Michael Clayton that it stars

920
00:57:17,800 --> 00:57:21,280
Speaker 2: I want to say, George Clooney and oh god, I

921
00:57:21,280 --> 00:57:23,200
Speaker 2: can't remember, I think till the Swinton's in it too.

922
00:57:23,560 --> 00:57:26,960
Speaker 2: It's this fantastic movie where there's this what they called

923
00:57:27,040 --> 00:57:30,120
Speaker 2: a fixer would come through. And that's what this whole

924
00:57:30,160 --> 00:57:33,280
Speaker 2: thing feels like to me. Fixers, that's what it is.

925
00:57:33,360 --> 00:57:36,720
Speaker 2: I think, Nah, in my head, that's how I'm choosing

926
00:57:36,760 --> 00:57:40,440
Speaker 2: to view mackenzie, which I'm sure is just a shallow

927
00:57:40,560 --> 00:57:42,400
Speaker 2: view of what it is and what it actually is.

928
00:57:42,600 --> 00:57:44,920
Speaker 2: But that's what it feels like to me, and I

929
00:57:44,920 --> 00:57:46,280
Speaker 2: wonder if you feel that same way.

930
00:57:46,680 --> 00:57:50,600
Speaker 1: Let us know, yeah, and art look and also, consultant

931
00:57:50,680 --> 00:57:54,160
Speaker 1: firms aren't inherently bad right.

932
00:57:54,040 --> 00:57:58,160
Speaker 2: Now, you're just getting something done efficiently. I think that's it.

933
00:57:58,280 --> 00:58:02,440
Speaker 1: Oh, you're getting someone's opinion. Yeah, that's what I consulted. Like,

934
00:58:02,680 --> 00:58:05,320
Speaker 1: here's my opinion based on my experience. This is what

935
00:58:05,360 --> 00:58:10,680
Speaker 1: I advise, right, And plenty of people have done consulting

936
00:58:10,800 --> 00:58:14,680
Speaker 1: work before. I've done it, not on this level, but

937
00:58:15,640 --> 00:58:18,120
Speaker 1: it you know, I just want to emphasize that we're

938
00:58:18,160 --> 00:58:21,200
Speaker 1: not saying all these firms are terrible. We're not saying

939
00:58:21,240 --> 00:58:25,280
Speaker 1: that everyone involved is a bad guy. But we are

940
00:58:25,320 --> 00:58:29,439
Speaker 1: saying that McKenzie has a lot of stuff they don't

941
00:58:29,520 --> 00:58:31,920
Speaker 1: want you to know. And it goes way beyond just

942
00:58:32,080 --> 00:58:35,160
Speaker 1: who their clients are and what they do for those clients.

943
00:58:35,840 --> 00:58:40,880
Speaker 1: It goes into court cases, it goes into collapsing state

944
00:58:41,040 --> 00:58:45,200
Speaker 1: sector industries, it goes into tons of dirty money, and

945
00:58:45,280 --> 00:58:48,760
Speaker 1: this is you know, at that point, those statements are

946
00:58:48,800 --> 00:58:53,120
Speaker 1: not our opinion. They're the opinion of legal systems of courts.

947
00:58:53,720 --> 00:58:56,720
Speaker 1: So it's not even us saying it at this point,

948
00:58:56,920 --> 00:58:57,600
Speaker 1: you know, what I mean?

949
00:58:58,000 --> 00:59:04,360
Speaker 2: No, all right, well hey find us yeah on social media.

950
00:59:04,560 --> 00:59:07,360
Speaker 1: Yeah, you can find us on Instagram, Facebook and Twitter.

951
00:59:07,600 --> 00:59:11,880
Speaker 1: Meet your fellow listeners and talk about talk about mackenzie

952
00:59:11,920 --> 00:59:14,840
Speaker 1: Group until they buy our corporation to shut us down.

953
00:59:15,080 --> 00:59:18,560
Speaker 1: Oh here's where it gets crazy. That's our community page

954
00:59:18,560 --> 00:59:22,160
Speaker 1: on Facebook. You can find me on Instagram. I'm at them,

955
00:59:22,240 --> 00:59:23,600
Speaker 1: Bowlin Ben.

956
00:59:23,640 --> 00:59:28,520
Speaker 2: That's not a f Dora right, No, no, okay, just

957
00:59:28,560 --> 00:59:29,120
Speaker 2: make it sure.

958
00:59:29,200 --> 00:59:33,439
Speaker 3: And these are not our gyle socks. These are space socks.

959
00:59:33,680 --> 00:59:35,800
Speaker 2: Those are awesome, dude, I just have boring on eszone

960
00:59:35,880 --> 00:59:37,080
Speaker 2: right now. Those are awesome.

961
00:59:37,560 --> 00:59:39,080
Speaker 4: That makes you a better consultant.

962
00:59:39,800 --> 00:59:40,840
Speaker 2: I'm not distracting you.

963
00:59:41,040 --> 00:59:44,160
Speaker 1: This is where we find out that Paul Decad works

964
00:59:44,200 --> 00:59:45,200
Speaker 1: for McKenzie.

965
00:59:46,480 --> 00:59:49,640
Speaker 2: Oh. I could totally see Paul doing it. Oh man,

966
00:59:49,640 --> 00:59:52,200
Speaker 2: he cleans up, He cleans up so nicely, and he's

967
00:59:52,200 --> 00:59:54,959
Speaker 2: just like rolling under the radar when he's in here

968
00:59:55,000 --> 00:59:55,920
Speaker 2: as mission control.

969
00:59:56,160 --> 00:59:58,360
Speaker 4: I could see it doing a great job with it too.

970
00:59:58,640 --> 00:59:58,800
Speaker 2: Oh.

971
00:59:58,880 --> 01:00:01,400
Speaker 1: Also, this has nothing to do with anything other than

972
01:00:01,480 --> 01:00:04,439
Speaker 1: maybe ending on a little bit of a lighter note. Paul,

973
01:00:04,520 --> 01:00:06,600
Speaker 1: I don't know how you're gonna feel about this, And

974
01:00:06,800 --> 01:00:09,760
Speaker 1: fellow listeners, you haven't heard Paul on the air, but

975
01:00:10,080 --> 01:00:14,720
Speaker 1: I was watching stand up from one of uh, one

976
01:00:14,760 --> 01:00:17,960
Speaker 1: of my favorite comics, John Mullaney.

977
01:00:18,440 --> 01:00:20,560
Speaker 2: Dude, I thought Mullaney as you said that.

978
01:00:20,880 --> 01:00:26,040
Speaker 1: And super producer Paul Deckett, do you remind me of

979
01:00:26,120 --> 01:00:28,360
Speaker 1: John Mullaney in the coolest way?

980
01:00:29,320 --> 01:00:29,520
Speaker 2: Oh?

981
01:00:29,600 --> 01:00:32,760
Speaker 1: Yeah, yeah, yeah, I could see, I could see.

982
01:00:32,840 --> 01:00:34,880
Speaker 4: I could see Paul telling some of those stories.

983
01:00:35,200 --> 01:00:36,880
Speaker 2: Oh man, I hope you grew up to be like

984
01:00:36,920 --> 01:00:39,640
Speaker 2: his character that he played on the Broadway show that

985
01:00:39,680 --> 01:00:43,480
Speaker 2: he did. I hope you. I hope you come into

986
01:00:43,520 --> 01:00:44,800
Speaker 2: that one day.

987
01:00:46,640 --> 01:00:49,080
Speaker 3: But you're not making the decision for him.

988
01:00:49,200 --> 01:00:51,160
Speaker 4: You're advising him, right.

989
01:00:51,160 --> 01:00:54,280
Speaker 1: True, So if anything goes wrong with that, it's not

990
01:00:54,440 --> 01:00:55,400
Speaker 1: it's not your fault.

991
01:00:55,680 --> 01:00:56,560
Speaker 4: Matt, Matt and co.

992
01:00:57,600 --> 01:00:59,600
Speaker 1: So thank you so much for Tunian and please do

993
01:00:59,680 --> 01:01:04,520
Speaker 1: let us know what your take is on these things.

994
01:01:04,840 --> 01:01:08,880
Speaker 1: Are these companies something that should be in the world?

995
01:01:09,520 --> 01:01:10,280
Speaker 2: Are they.

996
01:01:11,560 --> 01:01:15,680
Speaker 1: Are they criminal organizations? Or are the opponents and critics

997
01:01:15,720 --> 01:01:19,480
Speaker 1: just being alarmist? You know, there's definitely stuff they'll once

998
01:01:19,560 --> 01:01:24,000
Speaker 1: you know, and everything indicates that several of those secrets

999
01:01:24,200 --> 01:01:27,560
Speaker 1: are secrets because they are legal activity. But again, a

1000
01:01:27,600 --> 01:01:30,200
Speaker 1: few bad apples, there's it a whole bad orchard.

1001
01:01:31,240 --> 01:01:34,280
Speaker 2: No, no, you can always you can always argue the bad

1002
01:01:34,320 --> 01:01:38,160
Speaker 2: Apple thing in almost every situation, and you can call us.

1003
01:01:38,360 --> 01:01:41,320
Speaker 2: And that's the end of this classic episode. If you

1004
01:01:41,400 --> 01:01:45,480
Speaker 2: have any thoughts or questions about this episode, you can

1005
01:01:45,520 --> 01:01:48,120
Speaker 2: get into contact with us in a number of different ways.

1006
01:01:48,320 --> 01:01:49,880
Speaker 2: One of the best is to give us a call.

1007
01:01:49,920 --> 01:01:54,760
Speaker 2: Our number is one eight three three STDWYTK. If you

1008
01:01:54,760 --> 01:01:56,600
Speaker 2: don't want to do that, you can send us a

1009
01:01:56,600 --> 01:01:57,800
Speaker 2: good old fashioned email.

1010
01:01:58,040 --> 01:02:01,960
Speaker 3: We are conspiracy at iHeartRadio dot com.

1011
01:02:02,360 --> 01:02:04,400
Speaker 2: Stuff they don't want you to know is a production

1012
01:02:04,520 --> 01:02:09,040
Speaker 2: of iHeartRadio. For more podcasts from iHeartRadio, visit the iHeartRadio app,

1013
01:02:09,160 --> 01:02:12,000
Speaker 2: Apple Podcasts, or wherever you listen to your favorite shows.