On December 5, the lead editorial in the New York Times criticized potential Democratic presidential nominee Pete Buttigieg for his silence on the three years he spent as a consultant with the giant consulting firm McKinsey & Company.
According to the Times editorial:
"The Times reported this week that the consulting firm has advised the Trump administration on the logistics of its cruel crackdown on immigration. McKinsey also has offered its services as a consultant to brutal and corrupt governments and state-owned enterprises in other countries, including China, Russia and Saudi Arabia.
Mr. Buttigieg has criticized the company, and cast the troubles as largely postdating his tenure. “As somebody who left the firm a decade ago, seeing what certain people in that firm have decided to do is extremely frustrating and extremely disappointing,” he told CNN."
But that’s an incomplete answer. Mr. Buttigieg needs to explain what he did at McKinsey."
For America's newspaper of record to use its lead editorial to put pressure on a presidential candidate to reveal the clients he worked for during his tenure at McKinsey, suggests the deep-seated suspicion many informed observers now have of the ethical judgement McKinsey shows when choosing its clients and projects. According to a former McKinsey consultant describing in detail how McKinsey screens its clients, "What the client selection process means in practice is that the firm doesn’t work with North Korea, but that’s about it."
But it wasn't always this way.
Few companies in any industry had built a reputation for leadership that McKinsey & Company had in the world of management consulting. In its 92-year history, McKinsey has become a global giant with 127 offices around the globe, more than 27,000 employees and annual revenue of more than $10 billion.
McKinsey seems to be everywhere — and nowhere at the same time. In other words, it is highly secretive about who its clients are, the work it does for its clients, and the impact its recommendations have on the larger world.
Moreover, as a private partnership, it has no obligation to report information to the public. And as a consulting firm, it isn’t regulated. Other types of companies, especially the "Big 4" accounting firms and investment banks, also serve the global corporate and political elite. But a crucial difference is that they are overseen by government agencies.
In other words, McKinsey has perfected the practice of avoiding accountability. This lack of accountability, particularly for a firm as influential as McKinsey, makes a compelling case to investigate its conduct globally.
And these investigations are mushrooming. In stark contrast to the firm’s former pristine reputation, a number of recent articles in the New York Times, Wall St. Journal, the Economist and ProPublica, paint a discordant portrait, focusing on a darker aspect of McKinsey’s global operations.
These articles go into considerable detail regarding the prominent role McKinsey played as a key advisor to authoritarian governments in places like China, Saudi Arabia, Ukraine, South Africa, South America and Turkey.
But before exploring McKinsey's questionable work overseas, let's look at the work done by McKinsey for the U.S. Immigration and Customs Enforcement (ICE) under the Trump administration. This account is largely based on research and reporting done by the New York Times and ProPublica, an independent, non-profit newsroom that produces investigative journalism in the public interest.
McKinsey's work for Immigration and Customs Enforcement (ICE) under the Trump Administration.
Just days after he took office in 2017, President Trump set out to make good on his campaign pledge to halt illegal immigration. In a pair of executive orders, he ordered “all legally available resources” to be shifted to border detention facilities, and called for hiring 10,000 new immigration officers.
The logistical challenges were daunting, but as luck would have it, Immigration and Customs Enforcement (ICE) already had a partner on its payroll: McKinsey & Company.
ICE is an agency within the Department of Homeland Security. ICE was created in 2003, as a part of the U.S. government’s reorganization after the Sept. 11, 2001, attacks. Enforcement and Removal Operations, the best-known division of ICE, arrests, detains and deports unauthorized immigrants already inside the United States.
ICE quickly redirected McKinsey toward helping the agency figure out how to execute the White House’s clampdown on illegal immigration.
But the money-saving recommendations McKinsey came up with made even some hardened, career ICE workers uncomfortable. They proposed cuts in spending on food for migrants, as well as on medical care and supervision of detainees, according to interviews with people who worked on the project for both ICE and McKinsey and 1,500 pages of documents obtained from the agency after ProPublica filed a lawsuit under the Freedom of Information Act.
McKinsey’s team also looked for ways to accelerate the deportation process, provoking worries among some ICE staff members that the recommendations risked short-circuiting due-process protections for migrants fighting removal from the United States. The consultants, three people who worked on the project said, seemed focused solely on cutting costs and speeding up deportations — actions whose success could be measured in numbers — with little acknowledgment that these policies affected thousands of human beings.
In what one former ICE official described as “heated meetings” with McKinsey consultants, agency staff members questioned whether saving pennies on food and medical care for detainees justified the potential human cost.
But the consulting firm’s sway at ICE grew to the point that McKinsey’s staff even ghostwrote a government contracting document that defined the consulting team’s own responsibilities and justified the firm’s retention, a contract extension worth $2.2 million. “Can they do that?” an ICE official wrote to a contracting officer in May 2017. The answer was "yes".
The New York Times reported last year that McKinsey ultimately did more than $20 million in consulting work for ICE, a commitment to one of the Trump administration’s most controversial endeavors that raised concerns among some of McKinsey’s employees and former partners. The firm’s global managing partner, Kevin Sneader, assured them in a 2018 email that the firm had never focused on developing, advising or implementing immigration policies. He said McKinsey “will not, under any circumstances, engage in work, anywhere in the world, that advances or assists policies that are at odds with our values.”
But the new documents (i.e. the documents recently obtained by ProPublica from a lawsuit filed under the U.S. Freedom of Information Act) reveal that the firm was deeply involved in executing policies central to the Trump administration’s cruel immigration crackdown. In fact, a number of McKinsey’s proposals were never carried out because of their harshness.
McKinsey’s work at ICE ended in July 2018. Among agency officials, there was growing dissatisfaction with the consultants’ work, and leadership turnover in the agency had left the consulting firm with few defenders, two former ICE officials said.
But the firm’s work supporting the Trump administration’s immigration clampdown has continued. Just a week after Mr. Sneader announced that the ICE engagement was over, McKinsey signed a $2 million contract to advise Customs and Border Protection (C.B.P.).
C.B.P. is the parent agency for the Border Patrol. It's the Border Patrol - not ICE - which is responsible for patrolling, monitoring and securing the United States’ borders with Mexico (and Canada).
Under the Trump administration’s “zero tolerance” policy, which calls for prosecuting all who illegally enter the United States, Border Patrol agents at the southwestern border have been arresting and jailing adults, separating them from their children.
McKinsey's $2 million contract was to assist C.B.P. as it drafted a new border strategy to replace the Obama administration’s approach, and it has since signed yet another contract with C.B.P. — worth up to $8.4 million — that will keep the firm at the agency at least through September 2020.
Among the border strategy priorities listed in McKinsey slide decks for the C.B.P. are: “invest in impedance and denial capability,” “work with partner agencies and components to maximize programs that discourage illegal entries” and, in one instance, simply, “Wall.”
McKinsey in South Africa
The work done by McKinsey for the U.S. border security agencies I.C.E. and C.B.P. suggests an indifference to the harmful impact McKinsey's recommendations can have on vulnerable populations. However, in its dealings with South African state-owned power company, Eskom, McKinsey seems to have exhibited a different sort of indifference - an indifference to working in a political environment in which hard-core corruption was pervasive. The details of the Eskcom contract described below are largely taken from reporting by the New York Times and other reputable media such as the Economist.