Following a string of stories published this year about its work for autocratic regimes in Saudi Arabia (including work that helped the Saudi government crack down on dissidents living abroad), China and elsewhere, vaunted consulting firm McKinsey has endured a firestorm of criticism. But a story published Friday by the Wall Street Journal revealed that a former partner for the consulting firm has languished in a Saudi prison since Crown Prince Mohammad bin Salman's now-infamous
"anti-corruption purge" cash grab/political crackdown.
But instead of rallying to its employees defense, McKinsey has apparently severed ties with Hani Khoja, the founder of Elixir Consulting, a local firm that McKinsey purchased, making Khoja a partner at the firm. Khoja's physical abuse and detention underscores "the ethical quandaries multinational companies face working in Saudi Arabia," WSJ said. And of course, news of the McKinsey partner's detention on vague "corruption" charges, the justification for which remains murky (some of WSJ's anonymous sources from within the kingdom said Khoja's relationship with the kingdom's economy minister is what lead to his arrest), could revive some of the international criticism about the kingdom's abysmal human rights record just as the controversy over the killing of Jamal Khashoggi was beginning to subside.
While Khoja's charges haven't been made public, he has reportedly been detained on suspicions of corruption, bribery and plotting to overthrow the Saudi government.
Though, for what it's worth, McKinsey says it plans to continue working for the Saudi government. Tellingly, the firm also specifically said it didn't buy Khoja's firms because of his connections with the Saudi state, but rather because it had demonstrated real tangible results.
The McKinsey spokesman said the firm continues to pay Mr. Khoja under the terms of his contract. The spokesman declined to say why Mr. Khoja’s employment ended during his absence.
Recent events like the Khashoggi killing have forced McKinsey, like other businesses, to decide whether they want to remain in Saudi Arabia. McKinsey, which says it plans to stay, began working for the Saudi state oil company in 1974, and has over the decades formed deep ties in government and the private sector.
McKinsey said it didn’t buy Elixir for its connections to the government. "We acquired Elixir because of its capabilities and strong local track record of implementing change programs with private, nonprofit and public-sector clients," the McKinsey spokesman said.
Khoja was moved out of the Riyadh Ritz Carlton earlier this year. Since then, even his former employer hasn't been able to determine his whereabouts.
Detainees including Mr. Khoja were initially held at Riyadh’s Ritz-Carlton hotel. Some were released after paying fines or relinquishing assets to the government, while others like Mr. Khoja were moved to detention centers where certain prisoners—including some human-rights advocates—have been beaten in recent months, the Journal reported in November.
A spokesman for McKinsey said the firm doesn’t know where Mr. Khoja is and hadn’t been told that he was physically abused. "We have sought information from the authorities. We are anxious to know more and are in regular touch with Mr. Khoja’s family," the spokesman wrote in an email.
According to Khoja's biography, he was educated in the US before returning the Kingdom, where he worked in marketing for Procotor & Gamble for years before deciding to leave and start his consulting firm back in 2005. Elixer's aim was to help Saudi startups. Before his arrest, he was reportedly a staunch believer in the ability of Saudi firms to diverse the kingdom's energy based economy (which, in theory, should have made him an ally to the Crown Prince).
After its deal with McKinsey, Khoja lasted only six months before the corruption crackdown began. At the time of his arrest, McKinsey decided not to publicize it.
McKinsey operated Elixir only for about six months after the deal before the crown prince’s corruption crackdown started. Elixir consultants learned of Mr. Khoja’s arrest via WhatsApp messages from him, according to a person who saw the message.
"Don’t talk about this with anyone," Mr. Khoja wrote to a staff WhatsApp group at the time. That was the last they heard of him.
McKinsey made no public statements on the arrests. It replaced Mr. Khoja as CEO of Elixir with a Dubai-based McKinsey executive and appointed a California-based McKinsey partner as chairman. The firm has continued working for Prince Mohammed’s government.
Despite the brutal treatment Khoja has received, we wonder how many more McKinsey employees will need to suffer at the hands of the Saudi state before the firm reevaluates its decision to continue doing business in the kingdom?