France prosecutors open tax fraud probe over consultancies in government

French prosecutors said on Wednesday they have opened a probe into suspected tax fraud by management consultancies whose record contracts with the government has caused problems for President Emmanuel Macron on the campaign trial.

France’s financial crimes prosecutors (PNF) said in a statement they had on March 31 opened a preliminary inquiry into laundering of tax fraud proceeds after the report by the upper house Senate.

The Senate investigation concluded this month that public spending on consultants had more than doubled from 2018-2021, reaching more than a billion euros ($1.1 billion) last year, a record.

The investigation, which condemned the “sprawling phenomenon,” also slammed US-based giant McKinsey for failing to pay corporation tax for the last 10 years despite declaring sales of 329 million euros in France — which McKinsey denies.

The PNF statement gave no further details and did not name any entity.

The controversy has proved highly unwelcome for Macron, a former investment banker, derided as a president of the rich by left-wingers throughout his time in office.

It has also erupted at a time he is seeking to find momentum for his campaign ahead of the first round of elections Sunday in the face of a challenge from resurgent far-right leader Marine Le Pen.

Macron has defended the use of consultants, emphasizing that this is standard practice for governments across the world.

He has denied that anything “murky” has been at work and argued that public procurement policies had been strictly followed and additional help had been required during the COVID-19 pandemic when ministries and civil servants were stretched thin.

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