This week, Democratic presidential hopeful Pete Buttigieg secured a partial release from a nondisclosure agreement he signed with his former employer McKinsey & Co., allowing him to provide a list of his former clients. He had previously provided a summary of his time with the massive consulting firm that included only vague descriptions of the accounts he worked on but no proper names.
Having McKinsey on his resume has been a liability for Buttigieg, given the consulting firm’s dodgy history of working with authoritarian regimes like Saudi Arabia as well as its contracts with the Immigration and Customs Enforcement (ICE) agency under the Trump Administration. His inability to talk about his tenure there enabled his detractors to let their imaginations run wild.
Buttigieg’s release confirmed a lot of things had already been pieced together based on his previous statements, such as the revelation that he worked as a consultant for Blue Cross Blue Shield, when it decided to “streamline,” i.e. downsize, its operations.
Unsurprisingly, given the centrality of health care in the current race, a lot of press has been devoted to this part of his career, but Mayor Pete’s more interesting client—and arguably the one that says the most about him as a candidate—was the Department of Defense.
According to Buttigieg’s statement, in 2009, he worked on a Department of Defense “project focused on increasing employment and entrepreneurship in those countries’ economies.” That project was the ill-fated Task Force for Business and Sustainability Operations (TFBSO), which was established to revive Iraq’s state-owned economy through privatization and foreign investment.
Led by ex-Silicon Valley CEO Paul Brinkley, the TFBSO turned out to be a massive boondoggle. It was transferred from the Pentagon to the United States Agency for International Development (USAID) in 2011 following the resignation of Brinkley and his staff.
In the wake of the Iraq War, the State Department shuttered factories formerly subsidized by the Iraqi government, causing unemployment to skyrocket to 60 percent. The idea behind the TFBSO was to attract major foreign retailers like Walmart to sign contracts with manufacturers, but it was risky and there were few takers.
Like a startup CEO courting venture capitalists, Brinkley had wildly inflated projections and results. According to a report in the Los Angeles Times, TFBSO estimated in December 2006 that the project would create 11,000 jobs in the following year, but by the time the story went to press in August, it had produced fewer than 4,000.
Nevertheless, the project was deemed successful enough to expand to Afghanistan in 2009, and that’s when McKinsey was hired on.
McKinsey was one of several major consultants brought in by TFBSO, including other big names, like Booz Allen Hamilton, Boston Consulting and the RAND Corporation. Of these, McKinsey had the largest contract by far, according to a report by the Special Inspector General for Afghanistan Reconstruction (SIGAR).
These consultants provided “strategy documents, staff training events, and lessons learned reports.” McKinsey’s contract accounted for roughly a third of TFBSO’s $60 million budget for “general and administrative costs.”
Buttigieg describes his work as “doing mathematical analysis, conducting research, and preparing presentations,” but as anodyne as all this sounds, the PowerPoint slideshows he created for McKinsey contained the blueprint for neocolonial regimes in Iraq and Afghanistan.
The strategy of fostering manufacturing enterprises that TFBSO unsuccessfully attempted in Iraq had even less of a chance of succeeding in Afghanistan, which lacked the infrastructure. The solution proposed by McKinsey was resource extraction.
“Natural resources are the only ‘game changer’ available,” McKinsey senior partner John Dowdy wrote in a report titled “Private Sector Development in Afghanistan: The Doubly Missing Middle.”
Local companies were already mining industrial materials, he wrote, but “only globally traded minerals, such as copper, iron, gold, and rare earth elements, and energy supplies have the potential to generate significant public revenues.”
He added that this will “necessarily involve major international mining and energy companies, since the Afghans do not possess the indigenous capabilities themselves.”
In other words, under the pretext of generating public revenue for domestic development, the United States government would bring in foreign multinationals to mine Afghanistan’s natural resources for profit.
It’s reminiscent of the Bush Administration’s modus operandi in Iraq. Oil revenues were used to fund reconstruction, but mostly Western companies and defense contractors reaped the benefits. One study of contracts awarded in 2004, found that 85 percent of those valued at $5 million or more went to UK or US companies, whereas only 2 percent went to Iraqi firms.
According to a 2016 SIGAR audit, Afghanistan’s mineral reserves are estimated to be valued at $1 trillion, but the game plan McKinsey proposed in 2009 was badly botched first by TFBSO then USAID. Combined, they spent half a billion dollars trying to develop the Afghan mining industry with precious little to show for it.
Whereas an unused Olympic-sized swimming pool represented the failure of Iraq’s reconstruction, the symbols of waste in Afghanistan include a 43-million-dollar natural gas station (projected cost $300,000) and a 15-million-dollar empty warehouse.
The big winners in all of this were contractors and consultancies like McKinsey who get paid up front whether or not their plans yield results. SIGAR noted that the agency paid McKinsey close to $19 million for their work in Afghanistan alone and the sole tangible artifact they could find was a 50-page report.
The line that Buttigieg and his supporters have adopted goes something like this: Even though McKinsey has been involved in lots of questionable activities over the years, it doesn’t reflect poorly on Mayor Pete, who was just a low-level functionary pushing pencils and crunching numbers. It was just a starter job for him and he shouldn’t be held accountable for all the company’s sins.
In a recent interview with the Atlantic, Buttigieg said:
I think people are going to pounce on things no matter what. The best I can do is to explain my story — as much as I can responsibly share. But if folks are going to come up with a fanciful theory based on consulting work I did four and a half years out of school, chances are they’ll find a way to do it no matter what I say or do.
He also added that most of what he did involved making spreadsheets and integrating his analysis into a “PowerPoint that [his] manager would take and then bring to a partner who [he] imagined eventually presented something to a decision maker.”
So, Buttigieg was always several steps removed from major decisions—a proverbial cog in the machine. But while one could argue that he had little influence on McKinsey’s operations, how did the company shape him?
It’s hard to imagine that someone could spend a solid chunk of his formative years in a company without at least partially absorbing its outlook. The common denominator between projects like the Blue Cross Blue Shield restructuring and the TFBSO is a cold technocratic rationality leavened with a heaping spoonful of neoliberal ideology.
By his own admission, Buttigieg’s time at McKinsey has had some influence on his approach to governing. In his book, Buttigieg relates his experience in Afghanistan to serving as mayor of South Bend, observing that “the overlap and balkanization of our city’s economic development efforts reminded me of what I had seen on my trips to Afghanistan as a consultant dealing with the bewildering array of development agencies on the ground there.”
In his disclosure about his McKinsey clients, Buttigieg wrote that he never worked on “a project inconsistent with [his] values.”
This is undoubtedly true—and that’s the problem.