Congressional probe targets consulting reports that helped make DEI quotas a boardroom standard

House Republicans have accused a major consulting group of making misleading claims about DEI that led to billions of dollars in lost revenue.

Rep. Brandon Gill, R-Texas, chairman of the Task Force on Defending Constitutional Rights and Exposing Institutional Abuses, has opened an investigation into McKinsey & Company over its promotion over what he says is misleading claims about the benefits of corporations instituting discriminatory DEI practices.

“McKinsey published four reports titled Why Diversity Matters (2015), Delivering Through Diversity (2018), Diversity Wins (2020), and Diversity Matters Even More (2023). These reports allege strong links between companies with increased levels of racial and gender ‘diversity,’ emphasizing that increased diversity in companies causes a greater likelihood of improved financial performance,” Gill wrote in a press release announcing the investigation. “These McKinsey reports have been highly influential, being cited by publicly traded companies, asset managers, proxy advisory firms, and banking institutions, among others, as cause for embedding illegal racial and sex-based targets into hiring, promotion, executive compensation, and asset manager proxy voting policies.”

Researchers who have tried to replicate McKinsey’s results have failed, the task force said, suggesting McKinsey may have reversed the cause and effect in its conclusions. Congress further alleged that DEI hiring and promotion practices have cost the U.S. billions of dollars in revenue, including $94 billion in 2023.

A McKinsey spokesperson told Fox News this week that the consulting group stands by its research.

"We also recognize that diversity in the workplace encompasses a broad range of backgrounds, experiences and perspectives. We have and will continue to follow the law in the U.S. and in the other markets in which we operate," the spokesperson added.

As part of the task force’s investigation, Gill has asked McKinsey for the underlying datasets, including raw or unprocessed data, documentation of sources and any exclusions; Internal and external communications referencing the creation of the reports between McKinsey and anyone else involved; all documents and communications pertaining to internal quality assurance; and, all communications between McKinsey and academic institutions, corporations, or governments, that received the report and were told there was a relationship between diversity and financial performance.

Gill’s task force also requested all documents and communications referencing any of the four reports or analysis of the legality of using DEI and whether it violates Title VII of the Civil Rights Act of 1964, which prohibits discrimination in employment based on race or sex. The task force also requested information regarding payments and financial relationships between McKinsey and any organization that assisted in the reports.

McKinsey has not publicly released its underlying datasets used to produce its DEI reports,” Gills said.

In one example Gill cited, the “California Public Employees Retirement System (CalPERS) Investment Office cited two of the McKinsey DEI reports in its explanation for voting against three board members of P.A.M. Transportation Services, Inc. who had failed to satisfy its board diversity demands.”

Gill said this was one of a few examples where the McKinsey reports had been directly cited as a reason for employment discrimination.

“While McKinsey has claimed the DEI studies only found a correlative link between DEI and financial outperformance, McKinsey spokeswoman and the author of four of the DEI reports, Vivian Hunt, publicly asserted that ‘the leading companies in our datasets are pursuing diversity because it’s a business imperative and driving real business results.’"