Puerto Rico fiscal board: McKinsey & Co. consultants did not provide restructuring advice
SAN JUAN – The Financial Oversight and Management Board for Puerto Rico provided Monday an investigative report of its relationship with consultant McKinsey & Co., which concluded a subsidiary held investments in Puerto Rican debt.
However, the report “confirmed that McKinsey consultants did not know about the investments and had no influence over MIO’s investment decisions,” thus McKinsey’s consultants did not provide advice on the restructuring of Puerto Rican bonds,” the board’s release reads.
The McKinsey subsidiary, MIO Partners, manages pension plans and investments for McKinsey’s partners, former partners and their families, and held direct and indirect investments in Puerto Rican debt instruments.
The report was conducted by law firm Luskin, Stern & Eisler LLP provided recommendations regarding disclosure requirements for vendors, which the board said will be implemented, such as expanding the list of interested parties and requiring disclosure about vendors’ and consultants’ affiliates.
The board will require vendors to update their disclosures “now and periodically in the future,” it assured.
“The Oversight Board takes transparency very seriously,” the board’s executive director, Natalie Jaresko, said. “When we identify sensible improvements to our disclosure requirements, we will implement them.”
The report states that McKinsey complied with all legal and contractual requirements in its work with the board.
“We have full confidence in McKinsey’s analysis of fiscal and economic reform,” Jaresko added in the release.