NYPD Action in front of my house by Stan Wiechers, on Flickr https://www.flickr.com/photos/whoisstan/3768668935/in/photostream/

New York City Pays Enron’s Former Consulting Firm $1.7 Million to Draft Rikers Island Reform Plan

New York City Correction Commissioner Joseph Ponte has responded to Mayor de Blasio’s charge to improve conditions at Rikers Island by hiring private consulting firm McKinsey & Co. to draft a reform plan.

McKinsey & Co., which is “mostly known for helping Fortune 500 and other large companies” and has reportedly “little if any experience” working with prisons, has signed a 12-month, $1.7 million contract with the city.

Despite these circumstances, I suppose it’s possible McKinsey consultants can break through to Rikers guards, who “often respond to even minor slights from inmates with overwhelming force” and “have been accused of smuggling in drugs, alcohol and sometimes weapons and selling them to inmates.” Maybe they can soften correction officials who have been “described as adhering to a “powerful code of silence” when it comes to problems like brutality and corruption.”

But, as Barry Ritholtz pointed out a few years ago, there is reason to approach McKinsey’s management wisdom with caution:

McKinsey, the global consulting firm, has created dubious strategies for all manners of companies ranging from Enron to General Electric. Indeed, where ever there has been a financial disaster in the world, if you look around, somewhere in the background, McKinsey & Co. is nearby.

Yes, you read that right. Enron’s former consulting firm is going to take on reform at Rikers Island. I’m sure there’s a punchline in there somewhere. Or maybe about how McKinsey’s former executive Rajat Gupta spent two years in prison (lucky for him, not at Rikers, but a federal institution in Massachusetts) for insider trading on the board of Goldman Sachs. Continue reading

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