BCG says some of its staff circumvented its controls in Gaza work

By Stefania Spezzati and Andrew MacAskill

LONDON (Reuters) -An investigation commissioned by Boston Consulting Group has found that some of its U.S.-based staff sidestepped its risk controls to do work related to the Gaza Humanitarian Foundation and to "post-war reconstruction" for the Palestinian enclave, the consulting firm said.

In a response to a British parliamentary committee inquiry published on Thursday, BCG detailed the role some of its staff played in establishing GHF during late 2024 and early this year, and then the efforts made by one of its managing directors to carry out further work in March.

GHF is a U.S.- and Israeli-backed organisation that began delivering humanitarian supplies to Palestinian civilians in Gaza in May, bypassing traditional aid channels including the United Nations.

Its operations have been beset by violence and chaos including deadly shootings of scores of Palestinians near its food distribution sites guarded by Israeli forces, Reuters has reported.

The U.N. and other humanitarian groups have refused to work with GHF, questioning its neutrality and criticising the new distribution model as militarising aid and forcing displacement of Palestinians.

"We deeply regret that, in connection with the work about which the committee has asked, we did not live up to our standards," BCG said in its July 22-dated response to the parliamentary committee inquiry.

BCG's role in the setting up of GHF dragged the firm into controversy and raises questions over its internal risk processes and controls. Its decision not to publish the full investigation could lead to further questions about the level of that involvement.

A "largely complete" review led by law firm WilmerHale had shown that "BCG's approval processes were circumvented" by now-former BCG staff, the Boston-based management consulting firm said, in relation to work carried out earlier this year. BCG said it "will not publish the findings of this investigation" by WilmerHale.

BCG said a team led by two U.S.-based and now former employees "provided pro bono support" to establish GHF between October last year and January, including its subsidiary in Switzerland, and that such work was directed by a U.S.-based security contractor, Orbis Operations.

BCG said the information provided by its staff related to the establishment of the foundation was "incomplete, inaccurate and/or untruthful".

SECOND PROJECT

Later in March, a BCG employee started "a second, for-fee, project related to the operational and logistical effort to deliver aid", and entered into a contract with U.S.-based private equity firm, McNally Capital.

BCG said it cancelled the invoice for this project "as soon as we understood more about the scope and nature of the work."

Representatives for Orbis Operations and McNally Capital did not immediately reply to requests for comment.

Despite being told by BCG's risk officer not to engage in such a project, the same employee started a team to model "post-war reconstruction" scenarios, BCG said in its letter.

He did not enter into a contract with any counterparty for this work, BCG said.

"This unapproved work was shared and discussed on Signal" and "those communications were not maintained," the consulting firm said.

BCG added that "the only UK-based organisation with which we understand the team interacted during this work was the Tony Blair Institute," referring to post-war scenario planning for Gaza.

The Financial Times reported on July 4 that BCG had modelled the costs of "relocating" Palestinians from Gaza and that the Tony Blair Institute participated in a project to develop a post-war Gaza plan.

A Tony Blair Institute representative said the firm "has had many calls with different groups on post-war reconstruction of Gaza but none have included the idea of forcible relocation of people from Gaza."

(Reporting by Stefania Spezzati and Andrew MacAskill; Additional reporting by Aram Roston; Editing by Tommy Reggiori Wilkes and Timothy Heritage)