Maine’s deal with controversial consulting firm raises questions about transparency, fiscal responsibility
(The Center Square) – Despite a surge of unemployment claims last spring, the state of Maine continued using COVID-19 relief funds toward a no-bid contract with a consulting firm once sued because of its marketing role for an opioid manufacturer.
“The state started working with McKinsey & Co in June 2020 under a $6.3 million no-bid contract that was recently extended until March 2021,” Jacob Posik, policy analyst at the Maine Policy Institute (MPI), told The Center Square by email. “Maine paid the firm a weekly rate of $178,000 mostly using money the state received from the CARES Act passed by Congress last year, impacting federal taxpayers more so than just Maine taxpayers.”
While McKinsey was expected to shore up the system, Posik noted claims remained unresolved months after the firm was hired.
Then, earlier this month, Attorney General Aaron Frey said Maine will receive $3.1 million as part of a multi-state settlement with McKinsey for its work in promoting opioid pharmaceuticals.
Lawmakers have asked why the state gave the job to McKinsey while involved in the lawsuit.
Sen. Rick Bennett, R-Oxford, wrote in the Bangor Daily News that the controversial contract has not solved Maine’s unemployment issues.
“It seems McKinsey was much more effective in marketing opioids to Mainers and marketing itself to the Department of Labor [DOL] than actually fixing the unemployment system,” Bennett said.
Transparency has been a problem for the administration of Gov. Janet Mills since the beginning of the pandemic, Posik said.
“The administration has regularly shielded information from the public concerning COVID-19 data throughout the state, and was also accused of violating the state’s open meeting laws back in April,” Posik said. “While Maine’s unemployment system certainly needed improvements at the start of the pandemic when claims were through the roof, the public deserves an explanation of why McKinsey was hired under a no-bid contract, and whether the administration and Maine DOL believe the public got its money’s worth out of the arrangement.”
No-bid contracts are rarely a good idea, even during something like the pandemic, Posik said.
“As noted by representatives of the Maine DOL, another firm was also being considered to take on this work; if McKinsey & Co. and this unnamed outfit were forced to compete against one another, the state likely could have received a better deal,” Posik said. “State revenues are down due to the pandemic and the governor’s response to it, so we should be especially careful and frugal with our tax dollars.”
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