Ban Bain & Co from US government contracts, Joe Biden is urged | Corporate governance

Joe Biden should follow the UK in banning the global management consultancy firm Bain & Company from future government contracts, the Labor peer Peter Hain has said.

In a letter shared with the Guardian, the former minister and anti-apartheid campaigner urged the US president to “act on this matter and establish a clear precedent that will signal to all US global companies, consultancies, lawyers, auditors and financial advisers that collusion with corrupt politicians and their business cronies in other countries will not be tolerated”.

Last month Bain was barred from tendering for UK government contracts for three years over its “grave professional misconduct” in state corruption in South Africa. Britain became the first western country to take this step, after pressure from Lord Hain.

In January, the Guardian revealed that the Labor peer had called on Boris Johnson’s government to penalize Bain, which is based in Boston, Massachusetts, over its “despicable” role in South Africa’s biggest post-apartheid corruption scandal.

In his letter to Biden, Hain wrote: “I urge the US government to similarly institute a ban on Bain working for any public sector organization in your country, at least until the current judicial process over Bain’s nefarious role in South Africa has completed its full course.”

He sent a copy of the document to Ron Kind, the chair of the British-American parliamentary group in the US House of Representatives.

The UK government’s decision came after the findings of two independent judicial commissions of inquiry in South Africa, namely the Nugent commission in 2018 and the Zondo commission, which concluded this year, chaired by Judge Robert Nugent and Chief Justice Raymond Zondo respectively.

The Zondo commission concluded in January that there had been “collusion” between the consultancy and the former South African president Jacob Zuma to reshape entire sectors of the economy.

The commission found that between 2012 and 2015, Bain helped draw up plans to “seize and restructure” the South African Revenue Service (Sars) and centralize procurement procedures – changes that the report said would facilitate corruption.

Hain said in his letter: “Bain’s US-based global managing partner, Manny Maceda, underplays his company’s actions at Sars as ‘mistakes’. But that contemptuously belittles the immense social and economic damage Bain’s behavior has caused ordinary South Africans already suffering from crippling inequality and poverty under apartheid, as well as the industrial-scale looting and cronyism during the Zuma decade in which Bain was complicit.”

Bain said last month that he was “disappointed and surprised” by the Cabinet Office’s decision. “Bain have apologized for the mistakes our South African office made in its work with the South African Revenue Service and we repaid all fees from the work, with interest, in 2018. Bain South Africa did not act illegally at Sars or elsewhere and no evidence to the contrary has been put forward,” it said.

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