"BCG modelled plan to ‘relocate’ Palestinians from Gaza", 4 July 2025

Boston Consulting Group modelled the costs of “relocating” Palestinians from Gaza and entered into a multimillion-dollar contract to help launch an aid scheme for the shattered enclave, a Financial Times investigation has found.

The consulting firm helped establish the Israel- and US-backed Gaza Humanitarian Foundation and supported a related security company but then disavowed the project, which has been marred by the deaths of hundreds of Palestinians, and fired two partners last month.

BCG’s role was more extensive than it has publicly described, according to people familiar with the project, stretching over seven months, covering more than $4mn of contracted work and involving internal discussion at senior levels of the firm.

More than a dozen BCG staff worked directly on the evolving project — codenamed “Aurora” — between October and late May. Senior figures at BCG discussed the initiative, including the firm’s chief risk officer and the head of its social impact practice.

The BCG team also built a financial model for the postwar reconstruction of Gaza, which included cost estimates for relocating hundreds of thousands of Palestinians from the strip and the economic impact of such a mass displacement. One scenario estimated more than 500,000 Gazans would leave the enclave with “relocation packages” worth $9,000 per person, or around $5bn in total.

BCG said the senior figures were repeatedly misled on the scope of the work by the partners running the project. Referring to the work on postwar Gaza, BCG said: “The lead partner was categorically told no, and he violated this directive. We disavow this work.”

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[BCG] has described the work as having begun as a pro bono project in October 2024 “to help establish an aid organisation intended to operate alongside other relief efforts”. BCG claimed subsequent work was “unauthorised” and has sought to blame misjudgments by two senior partners from its Washington-based US defence practice.

It told the FT: “Our ongoing investigation by an external law firm has substantiated the deep disappointment we expressed weeks ago. The full scope of these projects was not disclosed, including to senior leadership.”

BCG added that the work carried out was “in direct violation of our policies and processes”.

“We stopped the work, exited the two partners who led it, took no fees and launched an independent investigation,” it said. “We are taking steps to ensure this never happens again.”

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In Tel Aviv, BCG’s consultants were aiding SRS in developing the business side of its operations.

This included advising on how to move supplies to distribution sites, evaluating bids from potential construction and security contractors and providing other financial guidance. While SRS was far from a typical client, such advice was in line with BCG’s normal commercial work.

A separate side project taken on by [Matt] Schlueter’s team in April stood out as more unusual and pursued without the knowledge of senior management and in contravention of their instructions, according to BCG.

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BCG’s model provided assumptions for the costs of voluntary relocations of Gazans, rebuilding civilian housing and using innovative financing models such as “tokenisation” of real estate via blockchain technology. It also allowed calculation of possible GDP outcomes from reconstruction.

The model calculated relocation outside Gaza to be $23,000 cheaper, per Palestinian, than the costs of providing support to them in Gaza during reconstruction. The BCG team did not design the postwar blueprint that it financially modelled, according to several people familiar with the exercise. But the existence of the project caused uproar when it became known internally in late May because of the risks of being associated with a plan to displace Palestinians.

Schlueter told colleagues the work was encompassed by the existing contract with McNally and did not need new approvals, according to several people familiar with the events.

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On May 25 the decision was taken to pull the team out of Tel Aviv, shut down the work and not to collect the money that had been invoiced...

At a meeting of BCG’s most senior global partners in Vienna on May 28, Schlueter and [Ryan] Ordway were questioned about the work...

They were asked to resign on June 4. An external law firm, WilmerHale, is now helping BCG’s legal team investigate what Schweizer called the “process failures”...