Trump’s son-in-law has no business running the coronavirus response.
Reporting on the White House’s herky-jerky coronavirus response, Vanity Fair’s Gabriel Sherman has a quotation from Jared Kushner that should make all Americans, and particularly all New Yorkers, dizzy with terror.
According to Sherman, when New York’s governor, Andrew Cuomo, said that the state would need 30,000 ventilators at the apex of the coronavirus outbreak, Kushner decided that Cuomo was being alarmist. “I have all this data about I.C.U. capacity,” Kushner reportedly said. “I’m doing my own projections, and I’ve gotten a lot smarter about this. New York doesn’t need all the ventilators.” (Dr. Anthony Fauci, the country’s top expert on infectious diseases, has said he trusts Cuomo’s estimate.)
Even now, it’s hard to believe that someone with as little expertise as Kushner could be so arrogant, but he said something similar on Thursday, when he made his debut at the White House’s daily coronavirus briefing: “People who have requests for different products and supplies, a lot of them are doing it based on projections which are not the realistic projections.”
Kushner has succeeded at exactly three things in his life. He was
- born to the right parents,
- married well and
- learned how to influence his father-in-law.
Most of his other endeavors — his
- biggest real estate deal, his
- foray into newspaper ownership, his
- attempt to broker a peace deal between the Israelis and the Palestinians
— have been failures.
Undeterred, he has now arrogated to himself a major role in fighting the epochal health crisis that’s brought America to its knees. “Behind the scenes, Kushner takes charge of coronavirus response,” said a Politico headline on Wednesday. This is dilettantism raised to the level of sociopathy.
The journalist Andrea Bernstein looked closely at Kushner’s business record for her recent book “American Oligarchs: The Kushners, the Trumps, and the Marriage of Money and Power,” speaking to people on all sides of his real estate deals as well as those who worked with him at The New York Observer, the weekly newspaper he bought in 2006.
Kushner, Bernstein told me, “really sees himself as a disrupter.” Again and again, she said, people who’d dealt with Kushner told her that whatever he did, he “believed he could do it better than anybody else, and he had supreme confidence in his own abilities and his own judgment even when he didn’t know what he was talking about.”
It’s hard to overstate the extent to which this confidence is unearned. Kushner was a reportedly mediocre student whose billionaire father appears to have bought him a place at Harvard. Taking over the family real estate company after his father was sent to prison, Kushner paid $1.8 billion — a record, at the time — for a Manhattan skyscraper at the very top of the real estate market in 2007. The debt from that project became a crushing burden for the family business. (Kushner was able to restructure the debt in 2011, and in 2018 the project was bailed out by a Canadian asset management company with links to the government of Qatar.) He gutted the once-great New York Observer, then made a failed attempt to create a national network of local politics websites.
His forays into the Israeli-Palestinian conflict — for which he boasted of reading a whole 25 books — have left the dream of a two-state solution on life support. Michael Koplow of the centrist Israel Policy Forum described Kushner’s plan for the Palestinian economy as “the Monty Python version of Israeli-Palestinian peace.”
Now, in our hour of existential horror, Kushner is making life-or-death decisions for all Americans, showing all the wisdom we’ve come to expect from him.
“Mr. Kushner’s early involvement with dealing with the virus was in advising the president that the media’s coverage exaggerated the threat,” reported The Times. It was apparently at Kushner’s urging that Trump announced, falsely, that Google was about to launch a website that would link Americans with coronavirus testing. (As The Atlantic reported, a health insurance company co-founded by Kushner’s brother — which Kushner once owned a stake in — tried to build such a site, before the project was “suddenly and mysteriously scrapped.”)
The president was reportedly furious over the website debacle, but Kushner’s authority hasn’t been curbed. Politico reported that Kushner, “alongside a kitchen cabinet of outside experts including his former roommate and a suite of McKinsey consultants, has taken charge of the most important challenges facing the federal government,” including the production and distribution of medical supplies and the expansion of testing. Kushner has embedded his own people in the Federal Emergency Management Agency; a senior official described them to The Times as “a ‘frat party’ that descended from a U.F.O. and invaded the federal government.”
Disaster response requires discipline and adherence to a clear chain of command, not the move-fast-and-break-things approach of start-up culture. Even if Kushner “were the most competent person in the world, which he clearly isn’t, introducing these kind of competing power centers into a crisis response structure is a guaranteed problem,” Jeremy Konyndyk, a former U.S.A.I.D. official who helped manage the response to the Ebola crisis during Barack Obama’s administration, told me. “So you could have Trump and Kushner and Pence and the governors all be the smartest people in the room, but if there are multiple competing power centers trying to drive this response, it’s still going to be chaos.”
Competing power centers are a motif of this administration, and its approach to the pandemic is no exception. As The Washington Post reported, Kushner’s team added “another layer of confusion and conflicting signals within the White House’s disjointed response to the crisis.” Nor does his operation appear to be internally coherent. “Projects are so decentralized that one team often has little idea what others are doing — outside of that they all report up to Kushner,” reported Politico.
On Thursday, Governor Cuomo said that New York would run out of ventilators in six days. Perhaps Kushner’s projections were incorrect. “I don’t think the federal government is in a position to provide ventilators to the extent the nation may need them,” Cuomo said. “Assume you are on your own in life.” If not in life, certainly in this administration.
Among the hoops that candidates for plum consulting jobs at McKinsey & Company had to jump through in late 2006 was a bit of play acting: They were given a scenario involving a hypothetical client, “a business under siege,” and told they would be meeting with its chief executive the next day. How would they structure the conversation?
One contender stood out that year: a 24-year-old Rhodes scholar named Pete Buttigieg.
“He was the only one who put all the pieces together,” recalled Jeff Helbling, a McKinsey partner at the time who was involved in recruiting. Mr. Buttigieg soon won the other candidates over to his approach.
“He was very good at taking this ambiguous thing that he literally had no background on and making sense of it,” Mr. Helbling said. “That is rare for anyone at any level.”
The preternatural poise that got Mr. Buttigieg hired at McKinsey has helped him rise from obscurity to the top tier of the 2020 Democratic primary presidential contest.
On the way there, he ticked all the boxes. Harvard. Rhodes scholar. War veteran. Elected mayor of a midsize city before age 30.
Mr. Buttigieg sells his candidacy, in large part, on his mayoralty of South Bend, Ind., and a civic revitalization there rooted in the kind of data-driven techniques espoused by McKinsey. His nearly three years at “the firm” set him apart from many of his campaign rivals, underpinning his position as a more centrist alternative to progressive front-runners like Senators Bernie Sanders and Elizabeth Warren.
Yet Mr. Buttigieg’s time at the world’s most prestigious management-consulting company is one piece of his meticulously programmed biography that he mentions barely, if at all, on the campaign trail.
As Mr. Buttigieg explains it, that is not a matter of choice. For all of his efforts to run an open, accessible campaign — marked by frequent on-the-record conversations with reporters on his blue-and-yellow barnstorming bus — McKinsey is a famously secretive employer, and Mr. Buttigieg says he signed a nondisclosure agreement that keeps him from going into detail about his work there.
But as he gains ground in polls, his reticence about McKinsey is being tested, including by his rivals for the Democratic presidential nomination. Senator Warren, responding last month to needling by Mr. Buttigieg that she release more than the 11 years of tax returns she already had to account for her private-sector work, retorted, “There are some candidates who want to distract from the fact that they have not released the names of their clients and have not released the names of their bundlers.”
Beyond Mr. Buttigieg’s agreement with McKinsey, this is something of an awkward moment to be associated with the consultancy, especially if you happen to be a Democratic politician in an election year shadowed by questions of corporate power and growing wealth inequality. The firm has long advocated business strategies like
- raising executive compensation,
- moving labor offshore and
- laying off workers to cut costs.
And over the last couple of years, reporting in The New York Times and other publications has revealed episodes tarnishing McKinsey’s once-sterling reputation: its work advising Purdue Pharma on how to “turbocharge” opioid sales, its consulting for authoritarian governments in places like China and Saudi Arabia, and its role in a wide-ranging corruption scandal in South Africa. (All of these came after Mr. Buttigieg left the firm.)
Just this week, ProPublica, copublishing with The Times, revealed that McKinsey consultants had recommended in 2017 that Immigration and Customs Enforcement cut its spending on food for migrants and medical care for detainees.
After a campaign event on Wednesday in Birmingham, Ala., Mr. Buttigieg remarked on the latest revelations. “The decision to do what was reported yesterday in The Times is disgusting,” he said. “And 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.”
The Buttigieg campaign says he has asked to be let out of his nondisclosure agreement so he can be more forthcoming about that formative time in his life. A McKinsey spokesman said Mr. Buttigieg “worked with several different clients” during his time with the firm, but “beyond that, we have no comment on specific client work.”
But interviews with six people who were involved in projects that Mr. Buttigieg worked on at McKinsey, along with gleanings from his autobiography, fill in some of the blanks.
Mr. Buttigieg was recruited by McKinsey at Oxford. The company seeks out Rhodes scholars like him, banking that their intellects will make up for their lack of M.B.A.s from traditional recruiting grounds like Harvard Business School.
Yet even during the recruitment process, Mr. Helbling recalled, Mr. Buttigieg made it known that, like many applicants, he saw the business experience on offer at McKinsey as a good job “in the near term,” in his case an asset on the way to a career in public service.
The work he did in his first year and a half at the firm — nearly a 10th of his adult life — is effectively a blank slate, though tax records give some hints. In 2007, his first year with the company, he filed tax returns in Illinois, where he worked out of the Chicago office, as well as in his home state of Indiana. But he also filed in Michigan, and in the city of Detroit, where he worked on a McKinsey project. In 2008, he filed a return in Connecticut (McKinsey has an office in Stamford). The next year, he filed in Connecticut and in California.
In early 2009 Mr. Buttigieg was spending his days, and many nights, in a glass-walled conference room in suburban Toronto. He was analyzing Canadian grocery prices, plugging the numbers into a database running on a souped-up laptop his colleagues nicknamed “Bertha.” PowerPoint slides and spreadsheets crept into his dreams.
He knew this wasn’t his calling.
“And so it may have been inevitable that one afternoon, as I set Bertha to sleep mode to go out to the hallway for a cup of coffee, I realized with overwhelming clarity the reason this could not be a career for very long: I didn’t care,” Mr. Buttigieg wrote in his autobiography, “Shortest Way Home.”
It was the only experience at McKinsey that Mr. Buttigieg wrote about in any detail. His next act at the firm didn’t merit a single complete sentence in the book. But it was a radically different, and for him far more interesting, public-spirited project: More than four years before he would be deployed as a Navy Reserve officer, he was heading to Iraq and Afghanistan.
McKinsey’s focus in Iraq during the latter part of George W. Bush’s presidency and the early years of Barack Obama’s was to help the defense department identify Iraqi state-owned enterprises that could be revived. The idea was to provide employment for men who might otherwise join the insurgency against the American-led occupation.
The McKinsey consultants on the ground in 2006 and 2007 were almost exclusively military veterans like Alan Armstrong, who flew fighters for the Navy and had an M.B.A. from the Wharton School at the University of Pennsylvania. Mr. Armstrong, in an interview, said that while the reasoning behind the program was sound, the ongoing insurgency and a crippled infrastructure — electricity, for example, was spotty or nonexistent — made execution very difficult.
But the program was popular among the top brass at the Pentagon. In 2006, the defense secretary, Donald H. Rumsfeld, met with the team in Iraq and asked about the “whiz kids” from McKinsey, which struck Mr. Armstrong as an obvious parallel to the Vietnam War era, when whiz kids of an earlier generation had worked for another defense secretary: Robert S. McNamara.
“McKinsey was more than willing to play along — they were being paid extraordinary rates to keep playing,” Mr. Armstrong said.
Another former McKinsey consultant who worked in Iraq recalled a surreal moment preparing a PowerPoint presentation while on a convoy to a shuttered food-processing factory, under the watchful eye of a burly private security guard. “It felt like we were completely half-assing everything — it wasn’t particularly effective,” he said.
Other former McKinsey consultants who worked on the Iraq project, Task Force for Business and Stability Operations, have a more positive recollection of the firm’s work.
“Over all I’m very proud of it,” said one consultant, who had met Mr. Buttigieg in Washington, where most of the McKinsey consultants assigned to the project worked when not visiting Iraq. Four of the six former McKinsey employees spoke on the condition that their names not be used, citing confidentiality agreements or the press policies of their current employers.
By 2009, the security situation in Baghdad was stable enough that McKinsey allowed in some nonveterans like Mr. Buttigieg, who had studied Arabic at Harvard. He went to Iraq aware of the stark similarities between the American experiences there and in Vietnam decades earlier.
At Harvard, his senior thesis had drawn parallels between the United States’ seeking to “save” Vietnam from “godless Communism,” and the 17th-century Puritan ministers who had come to America to civilize “savage lands.” In his autobiography and in an interview that has drawn charges of out-of-touch elitism from some quarters, he reflected on that history by quoting a passage from “The Quiet American” by Graham Greene: “Innocence is like a dumb leper who has lost his bell, wandering the world, meaning no harm.”
“I had protested the Iraq war,” Mr. Buttigieg said in an interview with The Times. “But I also believed that it was important to try to do my part to help have good outcomes there.” He found echoes, he said, of “the stories I had studied about well-intentioned Americans sometimes causing as many problems as they addressed.”
Mr. Buttigieg recalled spending only two nights in Baghdad, where McKinsey consultants were quartered in a building near the Tigris River, and “going to a ministry.” He never left the city during his time there, he said.
“Remember I’m like the junior guy, kind of new,” Mr. Buttigieg said. “It’s not like I was the one whose expertise was needed to sort out what was going on in the provinces.
“Eventually I knew what I was doing a little more and was more useful by the time I got to the Afghan side.”
Mission in Afghanistan
Mr. Buttigieg spent more time in Afghanistan. While Iraq had a fairly well-educated populace, a modern road system and large oil revenues, Afghanistan was far less developed. But the mission was similar: identify small and medium-size businesses to nurture so that they could employ Afghans, providing an attractive alternative to joining the Taliban while fueling economic growth.
Citing his nondisclosure agreement, Mr. Buttigieg declined to specify in the interview what he had worked on, though he mentioned having looked at opportunities in the agricultural industry — onions, tomatoes, olive oil — as well as paint manufacturing.
“They had some things to work with,” he said, “but would have benefited from support on things like business planning, more resources on how to plug in and eventually connections to markets too.”
In the years after Mr. Buttigieg left McKinsey, that program came under criticism from the Special Inspector General for Afghanistan Reconstruction. McKinsey had been awarded $18.6 million for the project, but the watchdog wrote in an April 2018 report that it had been able to find just one piece of related work product: a 50-page report on the economic potential of the city of Herat.
A former McKinsey consultant who worked in Afghanistan described a more extensive McKinsey presence there, involving work in the mining industry and a government transparency project, along with the Herat study.
“One of those sounds just exactly like what I was doing,” Mr. Buttigieg said. When asked which one, he said, “I can’t think of a way to answer that without getting in trouble with the N.D.A.”
Mr. Buttigieg’s work on the Afghanistan project ended in late 2009, close to the time he was commissioned as an officer in the Navy Reserve. And that October, when he was still several months from leaving McKinsey, he set in motion the next phase of his life: He registered as a candidate for office with the State of Indiana.
The next year, he lost a bid for state treasurer, after emphasizing his McKinsey experience during the campaign. (He recounted at one campaign event that after his Rhodes scholarship, “I came back and went into business, and I worked for a company where my job was to do math. I’m a card-carrying nerd.”) In 2011, at age 29, he was elected mayor of South Bend.
The full range of Mr. Buttigieg’s work at McKinsey isn’t clear, though in his autobiography he says that he worked on other projects, including “energy efficiency research” to help curb greenhouse-gas emissions for a client he didn’t name. He also found time in the summer of 2008 to travel to Somaliland, the autonomous region in the Horn of Africa. He went as a tourist, but while there talked to local officials and wrote an account of his experience for The International Herald Tribune.
Mr. Buttigieg has been asked on the presidential campaign trail about his time at McKinsey and, in several interviews this year, has sought to reconcile the company’s recent troubles with his own work there.
For Mr. Buttigieg, the solution to McKinsey’s ethical pitfalls may come in a rethinking of the rules that business abides by. Maximizing shareholder value, the North Star of modern American capitalism, has a downside when the rules of the game leave many people worse off, he said.
“The challenge is that’s not good enough at a time when we are seeing how the economy continues to become more and more unequal, and we are seeing the ways in which a lot of corporate behavior that is technically legal is also not acceptable in terms of its impact,” he said. “There has got to be a higher standard.”
Role in U.S. Immigration and Customs Enforcement (ICE)
McKinsey stopped working for U.S. Immigration and Customs Enforcement (ICE) after it was disclosed that the firm had done more than $20 million in consulting work for the agency. A managing partner said the contract, not widely known within the company until The New York Times reported it, had “rightly raised” concerns.
Role in Saudi clampdown on dissidents
In October 2018, in the wake of the assassination of Jamal Khashoggi, a Saudi dissident and journalist, The New York Times reported that McKinsey had identified the most prominent Saudi dissidents on Twitter and that the Saudi government subsequently repressed the dissidents and their families. One of the dissidents was arrested. Another dissident’s family members were arrested, and the cell phone of the dissident was hacked. McKinsey issued a statement, saying “We are horrified by the possibility, however remote, that [the report] could have been misused. We have seen no evidence to suggest that it was misused, but we are urgently investigating how and with whom the document was shared.” In December 2018, The New York Times reported that “the kingdom is a such a vital client for the firm — the source of nearly 600 projects from 2011 to 2016 alone — that McKinsey chose to participate in a major Saudi investment conference in October 2018 even after the killing and dismemberment of a Washington Post columnist by Saudi agents.”
On the 12th of February 2019, the European Parliament Greens/EFA group presented a motion for a resolution on the situation on women’s rights defenders in Saudi Arabia denouncing the involvement of foreign public relations companies in representing Saudi Arabia and handling its public image namely McKinsey & Company.
McKinsey’s business and policy support for authoritarian regimes came under scrutiny in December 2018, in the wake of a lavish company retreat in China held adjacent to Chinese government internment campswhere thousands of Uyghurs were being detained without cause. In the preceding few years, McKinsey’s clients included Saudi Arabia‘s absolute monarchy, Turkey’s autocratic leader Recep Tayyip Erdogan, ousted former President of Ukraine Viktor Yanukovych, and several Chinese and Russian companies under sanctions.
.. 2008 financial crisis
McKinsey is said to have played a significant role in the 2008 financial crisis by promoting the securitization of mortgage assets and encouraged the banks to fund their balance sheets with debt, driving up risk, which ‘poisoned the global financial system and precipitated the 2008 credit meltdown’. Furthermore, McKinsey advised Allstate Insurance to purposefully give low offers to claimants. The Huffington Post revealed that the strategy was to make claims “so expensive and so time-consuming that lawyers would start refusing to help clients.” Next to this, 2016 McKinsey partner Navdeep Arora was convicted for illegally depleting State Farm of over $500,000 over a period of 8 years, in collaboration with a State Farm employee.