New York City Paid McKinsey Millions to Stem Jail Violence. Instead, Violence Soared.
The corporate consulting firm reported bogus numbers and flailed in a project at Rikers Island. Today, assaults and other attacks there are up almost 50%.
by Ian MacDougall
PROPUBLICA
In April 2017, partners from McKinsey & Company sent a confidential final report to the New York City corrections commissioner. They had spent almost three years leading an unusual project for a white-shoe corporate consulting firm like McKinsey: Attempting to stem the tide of inmate brawls, gang slashings and assaults by guards that threatened to overwhelm the jail complex on Rikers Island.
The report recounted that McKinsey had tested its new anti-violence strategy in what the firm called “Restart” housing units at Rikers. The results were striking. Violence had dropped more than 50% in the Restart facilities, the McKinsey partners wrote.
The number was bogus. Jail officials and McKinsey consultants had jointly rigged the Restart program in its earliest phase to all but guarantee there would be few violent episodes, according to documents and interviews. They stacked the units with inmates they believed to be compliant and unlikely to get into fights or to attack staff.
Publicly, McKinsey and top corrections officials touted the drop in violence in these units as an early sign of their project’s success — without disclosing that they had tilted the scale in favor of that result. After McKinsey handed off the inmate selection process, about a year into the firm’s work at Rikers, jail officials continued to manipulate the population of the Restart units to keep their violence numbers low.
In October of this year, the New York City Council voted to approve Mayor Bill de Blasio’s proposal to close Rikers. The vote occurred during the same month that a federal monitor, appointed by a court to oversee reform at Rikers, revealed that violence by jail guards there continues to worsen. Overall, using the metrics employed by McKinsey, jailhouse violence has risen nearly 50% since the firm began its assignment.
The full story of how New York City came to pay McKinsey $27.5 million only to abandon many of the firm’s recommendations and decide to shut Rikers has never been told. A ProPublica investigation, based on interviews with 36 people, half of whom worked directly on the project, as well as more than 10,000 pages of project documents, internal emails and other records, reveals that problems dogged the project at every stage.
Among the issues that plagued the project: McKinsey, which had never before advised a jail or prison system, made data errors that further undercut the results it reported from Restart units. The firm also persuaded the Department of Correction to spend millions on the sorts of advanced data analytics favored by McKinsey’s corporate clients. The department never ended up using many of the those data products, some of which simply did not work very well.
What happened at Rikers is a cautionary tale of a public-sector consulting boom that has emerged over the past decade. In recent years, government agencies across the United States have entrusted management consultants with more and more facets of public administration, from designing school systems to shaping Medicaid policy. Public-sector consulting in North America is a more than $9 billion industry, with an average yearly growth rate of about half a billion dollars, according to ALM Intelligence, which monitors the consulting business. McKinsey was anxious to expand into a potentially lucrative branch of public-sector work, corrections consulting, according to a former McKinsey consultant who worked on the project.
A McKinsey spokesman defended the firm’s work. “The Restart program had a significantly positive impact in the housing areas of the jails in which the program was piloted,” he said. “These units experienced substantial reductions in violence as measured against comparably classified inmate populations.” He added that morale among corrections staff assigned to the Restart units improved.
The spokesman denied that McKinsey’s consultants were involved in or aware of efforts to “improperly skew or reduce the reported levels of violence in the Restarts.” He added, “We stand behind our team’s professionalism and integrity, and the results of their work.”
The Department of Correction referred a request for comment to the mayor’s office. A spokeswoman there, Avery Cohen, maintained that the decision to hire McKinsey was sound and denied that city officials were involved in manipulating Restart units. “We sought the help of an outside firm for a singular purpose: to reduce the level of violence against staff and inmates and improve the safety of our overall facilities,” Cohen wrote in a statement. “We stand by the reduced rates of violence we saw in our Restart Units.”
But the gaming of the Restart units was confirmed by Joseph Ponte, who was the corrections commissioner from 2014 to 2017 and trumpeted the Restart results in public hearings. In a deposition last year, Ponte was asked whether he had been told that the teams running the Restart units “were cherry-picking docile inmates” to ensure that rates of violence would fall.
“We did that, so that wasn’t news,” Ponte testified. “I was well aware of how we were selecting inmates in the Restarts — very carefully. It was a new process for us, and we wanted it to be successful.”
McKinsey was hired in the wake of media reports in early 2014 that revealed an alarming rise in violence at Rikers. In just two years, the most serious inmate violence and use of force by guards had both jumped more than 50%. The United States attorney’s office in Manhattan began threatening to take legal action to force reforms.
De Blasio, then just a few months into his first term as mayor, faced a groundswell of outrage. His top deputy, Anthony Shorris, and other aides decided to hire a consulting firm. They solicited proposals from firms on a pre-approved list from the previous administration. Despite its lack of corrections experience, McKinsey won the contract.
The mayor’s aides saw hiring a firm like McKinsey as a way to stave off the need for a federal jail monitor, three current and former corrections officials recall from meetings with them. Hiring McKinsey also offered political cover, those sources said, and the imprimatur of having a respected firm tackle the problem.
McKinsey was selected because of its reputation for “dealing with complex organizations” and its history of working with New York City government, according to Shorris, who left the de Blasio administration in late 2017. McKinsey, for example, had previously prepared a report on 9/11 emergency preparedness and, during the administration of former Mayor Michael Bloomberg, had consulted for the New York Police Department on a reorganization and modernization.
The mayor’s office denied that McKinsey was hired partly to provide political or legal cover, as did Shorris, who is now a senior adviser to McKinsey and teaches at Princeton University.
Early on, the consultants took steps to avoid transparency. At McKinsey’s behest, a few top consultants and corrections officials communicated using Wickr, an encrypted messaging app that automatically deletes messages within hours or days. Ponte and his chief of staff, Jeff Thamkittikasem, downloaded Wickr, a spokeswoman for the mayor said, but neither could recall using it “in any significant way.”
But one person with direct knowledge of the practice said corrections officials and McKinsey consultants exchanged project documents over Wickr. That shielded portions of McKinsey’s work from government oversight bodies and public records requests. “It seems like there’s an intentional act to evade that system of accountability,” said Douglas Cox, an expert on public records law at the City University of New York School of Law. (A spokesman for McKinsey did not dispute that Wickr was used, adding, “our policies require colleagues to adhere to all relevant laws and regulations.”)
McKinsey’s work began in September 2014 with a $1.8 million contract and an ambitious mission: to determine the causes of violence at Rikers and propose solutions.
Almost immediately, signs emerged that McKinsey’s corporate orientation made for an awkward fit. When the consultants pitched Ponte on a proprietary workplace survey, they spotlighted how it helped lift output at a strip mine. “Productivity increased by 50%,” McKinsey’s pitch deck crowed. “~$180MM in annual run rate savings.”
As they formulated a reform plan, the consultants did not solicit the views of inmates, clinic staff or others with direct insights into drivers of violence. The closest the consultants came to interacting with the inmates during this stage was to watch them through Plexiglas from inside guard booths.
McKinsey began adopting the mindset of the correction officers, according to one of its consultants. The firm’s initiatives included facilitating the expanded use of Tasers, shotguns and K9 patrol dogs (“aggressive dogs,” in the words of one McKinsey presentation) at Rikers, a stance that seemed at odds with de Blasio’s claims of wanting to foster a more humane jail system. A McKinsey spokesman said these tactics were intended for use only in extreme situations and were designed to minimize injury while protecting inmate and staff safety.
At a 2015 meeting, a group of McKinsey consultants grew heated reviewing video of a jailhouse assault. There was talk of wanting to beat inmates to get the situation under control, according to a former McKinsey consultant with direct knowledge of the meeting.
Finally, Anish Melwani, a senior McKinsey partner, grew exasperated by the tough-guy posturing. “Guys, you’ve gone native,” the former consultant recalls him saying. “I think you’ve been spending too much time with the correctional officers.” A McKinsey spokesman said its team had no recollection of such a conversation. Melwani, who has since become CEO of luxury retailer LVMH Moët Hennessy Louis Vuitton’s North American operations, said he did not recall the specific meeting or comment but “reviewing footage of incidents was a routine part of the work while I was involved, so such a meeting would not have been unique.”
By March 2015, McKinsey and corrections officials had settled on a strategy to curb jail violence, which they called the “14-Point Plan.”
The provisions were straightforward. They ranged from adding educational opportunities for inmates to improving staff training to revamping the internal affairs division.
Some observers thought the recommendations were obvious. “A lot of the points were things the department was saying before they had McKinsey say it,” said Elizabeth Crowley, who at the time chaired the City Council committee that oversaw the Department of Correction.
McKinsey “contributed” to the development of the 14-Point Plan, a spokeswoman for the mayor said, but corrections officials primarily drove its creation and its tenets pre-dated McKinsey.
Top city officials, pleased to have a reform strategy to present to the public, were untroubled. In the spring of 2015, the city extended McKinsey’s engagement, assigning the consultants a long-term task: to help Ponte implement the 14-Point Plan. The firm’s original $1.8 million contract had now grown to more than $6 million.
The Restart units were conceived in early 2015. Outside pressure to fix the city’s jails had increased. The United States attorney’s office had joined a lawsuit over civil rights abuses at Rikers, and city officials were embroiled in often contentious settlement negotiations. The mayor’s top deputy, Shorris, was impatient for signs of improvement.
A series of tense meetings with Shorris in February and March created a sense of urgency for Ponte and his staff. After one particularly stressful meeting, a handful of Ponte’s aides met Benjamin Cheatham, a senior McKinsey partner who was heading up the project, at a bar near City Hall. Known by colleagues as the “little gray tornado” — a reference to his diminutive stature, muted color palette and overcaffeinated style — Cheatham had previously worked on McKinsey’s assignment for the New York Police Department.
Over margaritas, a person familiar with the meeting said, the group spent several hours sketching out what reform initiatives to test in the Restart units. A McKinsey spokesperson said it was one among many discussions about how to design the new program.