26
June 2020
INVESTIGATION
Asylum Outsourced: McKinsey’s Secret Role in Europe’s Refugee Crisis In 2016 and 2017, US management consultancy giant McKinsey was at the heart of efforts in Europe to accelerate the processing of asylum applications on over-crowded Greek islands and salvage a controversial deal with Turkey, raising concerns over the outsourcing of public policy on refugees. LUDĚK STAVINOHA and APOSTOLIS FOTIADIS | BIRN |
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he language was more corporate boardroom than humanitarian crisis – promises of ‘targeted strategies’, ‘maximising productivity’ and a ‘streamlined endto-end asylum process.’ But in 2016 this was precisely what the men and women of McKinsey&Company, the elite US management consultancy, were offering the European Union bureaucrats struggling to set in motion a pact with Turkey to stem the flow of asylum seekers to the continent’s shores. In March of that year, the EU had agreed to pay Turkey six billion euros if it would take back asylum seekers who had reached Greece – many of them fleeing fighting in Syria, Iraq and Afghanistan – and prevent others from trying to cross its borders. The pact – which human rights groups said put at risk the very right to seek refuge – was deeply controversial, but so too is the previously unknown extent of McKinsey’s influence over its implementation, and the lengths some EU bodies went to conceal that role. According to the findings of this investigation, months of ‘pro bono’ fieldwork by McKinsey fed, sometimes verbatim, into the highest levels of EU policy-making regarding how to make the pact work on the ground, and earned the consultancy a contract – awarded directly, without competition – worth almost one million euros to help enact that very same policy. The bloc’s own internal procurement watchdog later deemed the contract “irregular”. Questions have already been asked about McKinsey’s input in 2015 into German efforts to speed up its own turnover of asylum applications, with concerns expressed about rights being denied to those applying. This investigation, based on documents sought since November 2017, sheds new light on the extent to which private management consultants shaped Europe’s handling of the crisis on the ground, and how bureaucrats tried to keep that role under wraps. “If some companies develop programs which then turn into political decisions, this is a political issue of concern that should be examined carefully,” said German MEP Daniel Freund, a member of the European Parliament’s budget committee and a former Head of Advocacy for EU Integrity at Transparency International. “Especially if the same companies have afterwards been awarded with follow-up contracts not following due procedures.” Deal too important to fail The March 2016 deal was the culmination of an epic geopolitical thriller played out in Brussels, Ankara and a host of European capitals after more than 850,000 people – mainly Syrians, Iraqis and Afghans – took to the Aegean by boat and dinghy from Turkey to Greece the previous year. Turkey, which hosts some 3.5 million refugees from the nine-year-old war in neighbouring Syria, committed to take back all irregular asylum seekers who travelled across its territory in return for billions of euros in aid, EU visa liber-
alisation for Turkish citizens and revived negotiations on Turkish accession to the bloc. It also provided for the resettlement in Europe of one Syrian refugee from Turkey for each Syrian returned to Turkey from Greece. The EU hailed it as a blueprint, but rights groups said it set a dangerous precedent, resting on the premise that Turkey is a ‘safe third country’ to which asylum seekers can be returned, despite a host of rights that it denies foreigners seeking protection. The deal helped cut crossings over the Aegean, but it soon became clear that other parts were not delivering; the centrepiece was an accelerated border procedure for handling asylum applications within 15 days, including appeal. This wasn’t working, while new movement restrictions meant asylum seekers were stuck on Greek islands. But for the EU, the deal was too important to be derailed. “The directions from the European Commission, and those behind it, was that Greece had to implement the EU-Turkey deal full-stop, no matter the legal arguments or procedural issue you might raise,” said Marianna Tzeferakou, a lawyer who was part of a legal challenge to the notion that Turkey is a safe place to seek refuge. “Someone gave an order that this deal will start being implemented. Ambiguity and regulatory arbitrage led to a collapse of procedural guarantees. It was a political decision and could not be allowed to fail.” Enter McKinsey. Action plans emerge simultaneously Fresh from advising Germany on how to speed up the processing of asylum applications, the firm’s consultants were already on the ground doing research in Greece in the summer of 2016, according to two sources working with the Greek asylum service, GAS, at the time but who did not wish to be named. Documents seen by BIRN show that the consultancy was already in “initial discussions” with an EU body called the ‘Structural Reform Support Service’, SRSS, which aids member states in designing and implementing structural reforms and was at the time headed by Dutchman Maarten Verwey. Verwey was simultaneously EU coordinator for the EU-Turkey deal and is now the EU’s director general of economic and financial affairs, though he also remains acting head of SRSS. Asked for details of these ‘discussions’, Verwey responded that the European Commission – the EU’s executive arm – “does not hold any other documents” concerning the matter. Nevertheless, by September 2016, McKinsey had a pro bono proposal on the table for how it could help out, entitled ‘Supporting the European Commission through integrated refugee management.’ Verwey signed off on it in October. Minutes of management board meetings of the European Asylum Support Office, EASO – the EU’s asylum agency – show McKinsey was tasked by the Commission to “analyse the situation on the Greek islands and come up with an
action plan that would result in an elimination of the backlog” of asylum cases by April 2017. A spokesperson for the Commission told BIRN: “McKinsey volunteered to work free of charge to improve the functioning of the Greek asylum and reception system.” Over the next 12 weeks, according to other redacted documents, McKinsey worked with all the major actors involved – the SRSS, EASO, the EU border agency Frontex as well as Greek authorities. At bi-weekly stakeholder meetings, McKinsey identified “bottlenecks” in the asylum process and began to outline a series of measures to reduce the backlog, some of which were already being tested in a “mini-pilot” on the Greek island of Chios. At a first meeting in mid-October, McKinsey consultants told those present that “processing rates” of asylum cases by the EASO and the Greek asylum service, as well as appeals bodies, would need to significantly increase. By December, McKinsey’s “action plan” was ready, involving “targeted strategies and recommendations” for each actor involved. The same month, on December 8, Verwey released the EU’s own Joint Action Plan for implementing the EU-Turkey deal, which was endorsed by the EU’s heads of government on December 15. There was no mention of any McKinsey involvement and when asked about the company’s role the Commission told BIRN the plan was “a document elaborated together between the Commission and the Greek authorities.” However, buried in the EASO’s 2017 Annual Report is a reference to European Council endorsement of “the consultancy action plan” to clear the asylum backlog. Indeed, the similarities between McKinsey’s plan and the EU’s Joint Action Plan are uncanny, particularly in terms of increasing detention capacity on the islands, “segmentation” of cases, ramping up numbers of EASO and GAS caseworkers and interpreters and Frontex escort officers, limiting the number of appeal steps in the asylum process and changing the way appeals are processed and opinions drafted. In several instances, they are almost identical: where McKinsey recommends introducing “overarching segmentation by case types to increase speed and quality”, for example, the EU’s Joint Action Plan calls for “segmentation by case categories to increase speed and quality”. Much of what McKinsey did for the SRSS remains redacted. In June 2019, the Commission justified the non-disclosure on the basis that the information would pose a “risk” to “public security” as it could allegedly “be exploited by third parties (for example smuggling networks)”. Full disclosure, it argued, would risk “seriously undermining the commercial interests” of McKinsey. “While I understand that there could indeed be a private and public interest in the subject matter covered by the documents requested, I consider that such a public interest in transparency would not, in this case, outweigh the need to protect the commercial interests of the company concerned,” Martin Selmayr, then secretary-general of the European Commission, wrote. SRSS rejected the suggestion that the fact that
Infographic. Photo: BIRN/Igor Vujcic
Verwey refused to fully disclose the McKinsey proposal he had signed off on in October 2016 represented a possible conflict of interest, according to internal documents obtained during this investigation. Once Europe’s leaders had endorsed the Joint Action Plan, EASO was asked to “conclude a direct contract with McKinsey” to assist in its implementation, according to EASO management board minutes. ‘Political pressure’ The contract, worth 992,000 euros, came with an attached ‘exception note’ signed on January 20, 2017, by EASO’s Executive Director at the time, Jose Carreira, and Joanna Darmanin, the agency’s then head of operations. The note stated that “due to the time constraints and the political pressure it was deemed necessary to proceed with the contract to be signed without following the necessary procurement procedure”. The following year, an audit of EASO yearly accounts by the European Court of Auditors, ECA, which audits EU finances, found that “a single pre-selected economic operator” had been awarded work without the application of “any of the procurement procedures” laid down under EU regulations, designed to encourage transparency and competition. “Therefore, the public procurement procedure and all related payments (992,000 euros) were irregular,” it said. The auditor’s report does not name McKinsey. But it does specify that the “irregular” contract concerned the EASO’s hiring of a consultancy for implementation of the action plan in Greece; the amount cited by the auditor exactly matches the one in the McKinsey contract, while a spokesman for the EASO indirectly confirmed the contracts concerned were one and the same. When asked about the McKinsey contract, the spokesman, Anis Cassar, said: “EASO does not comment on specifics relating to individual contracts, particularly where the ECA is concerned. However, as you note, ECA found that the particular procurement procedure was irregular (not illegal).” “The procurement was carried under [sic] exceptional procurement rules in the context of the pressing requests by the relevant EU Institutions and Member States,” said EASO spokesman Anis Cassar. McKinsey’s deputy head of Global Media Relations, Graham Ackerman, said the company was unable to provide any further details. “In line with our firm’s values and confidentiality policy, we do not publicly discuss our clients or details of our client service,” Ackerman told BIRN.
