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Monday, February 6th, 2023

CONSULT Act introduced in Senate to crack down on Chinese, Russian penetration of national security contracting

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U.S. Sens. Joni Ernst (R-IA), Gary Peters (D-MI), and Maggie Hassan (D-NH) introduced this week the CONSULT Act, which aims to prevent Russian, Chinese, and other countries of concern from meddling with national security consulting firms.

CONSULT, or the Combating Obstructive National Security Underreporting of Legitimate Threats Act, represents an effort to identify and reduce conflicts of interest for government contractors and consulting firms. Where found, it would disqualify otherwise applicable firms from being awarded national security contracts. The senators said that one of the driving forces behind the bill was reports that the consulting firm McKinsey & Company was simultaneously advising state-owned companies in China and Russia on militarization while double-dipping into national security contracts in the United States.

“America’s adversaries, like China and Russia, are aggressively working against our national security interests; so why then would we allow government contractors closely tied to these adversaries to advise our military and Pentagon officials? At the very least, this is a clear conflict of interest, but more seriously, it could pose a threat to our national security,” Ernst said. “The U.S. is playing a dangerous game; it’s past time we put safeguards in place to ensure no firms hired by the federal government are working simultaneously to support the agenda of our adversaries like China and Russia.”

The new bill would create a government-wide policy and guidance on organizational conflicts of interests related to national security. It would also require consulting firms to disclose any potential conflicts of interest with certain entities over five years and allow for any conflicts to be grounds for denying them contracts or suspending existing ones. Further, the Federal Acquisition Regulatory Council (FARC) would update federal acquisition regulations to reflect these new demands. Business with China, Russia, any state sponsors of terrorism, or any countries engaged in projects declared crimes against humanity by the Secretary of State would be considered conflicts of interest under the bill.

“The U.S. government has designated the fight against foreign corruption as a core national security interest,” said Scott Greytak, director of advocacy for Transparency International U.S. “To that end, it’s important that U.S. officials have the information they need to know whether taxpayer dollars could go to organizations working for and helping to legitimize corrupt foreign governments.”

In addition to Transparency International, the bill has been backed by organizations, including the Project on Government Oversight and Citizens for Responsibility and Ethics in Washington (CREW).