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Spies fear a consulting firm helped hobble U.S. intelligence

Insiders say a multimillion dollar McKinsey-fueled overhaul of the country’s intelligence community has left it less effective.

By NATASHA BERTRAND and DANIEL LIPPMAN

07/02/2019 05:01 AM EDT

https://www.politico.com/story/2019/07/02/spies-intelligence-community-mckinsey-1390863

Instead, according to nearly a dozen current and former officials who either witnessed the restructuring firsthand or are familiar with the project, the multimillion dollar overhaul has left many within the country’s intelligence agencies demoralized and less effective.

These insiders said the efforts have hindered decision-making at key agencies — including the CIA, National Security Agency and the Office of the Director of National Intelligence.

They said McKinsey helped complicate a well-established linear chain of command, slowing down projects and turnaround time, and applied cookie-cutter solutions to agencies with unique cultures. In the process, numerous employees have become dismayed, saying the efforts have at best been a waste of money and, at worst, made their jobs more difficult. It’s unclear how much McKinsey was paid in that stretch, but according to news reports and people familiar with the effort, the total exceeded $10 million.

McCready’s firm did this.

Additionally, some of McKinsey’s multimillion dollar contracts were awarded without a competitive bidding process, a move meant to speed up timelines but one that critics said enabled the consulting firm to offer formulaic fixes without fear of losing any business.

The result, analysts and agents said, is that some officials are being frustrated in their attempts to battle increasingly swift and complex threats — Russia is launching disinformation campaigns that reach thousands of people in seconds on social media, Iran is hammering oil and gas companies in cyberspace, Chinese hackers are pilfering government records, terrorist networks have fractured and retreated to encrypted networks, and North Korea is furtively building out its nuclear program.

In each case, bureaucratic changes that slow response time or hamper intelligence collection capabilities could cause the loss of company secrets, private government data, the democratic process and even American lives. Already, some projects at the NSA have been cut or delayed as a result of disgruntled employees leaving the agency.

“At CIA, they shattered longstanding structural constructs that people had invested their whole careers in,” said Larry Pfeiffer, a 32-year intelligence veteran who now serves as the director of the Michael V. Hayden Center for Intelligence, Policy and International Security at George Mason University. It resulted in “a coordination nightmare” widely considered to be “very heavy-handed,” added Pfeiffer, who left government before the restructuring but remains in close contact with current officials.

Pfeiffer said he doesn’t know “a soul at CIA or NSA who would tell you that the reorganizations have made things better.”

In all, the firm has secured close to $1 billion in government contracts in just the past 10 years. Its work with the intelligence community goes back at least a decade — the firm played a central role in helping the FBI transform its intelligence mission in 2005 in response to pressure from the White House to restructure the bureau’s budget.

“They were receiving a generous consulting fee, but did not appear from my vantage to bring any particular expertise to the task,” said Stephen Slick, a veteran intelligence official who served as the National Security Council’s senior director for intelligence programs and reform in 2005.

With the more recent intelligence community restructuring, officials have also been vexed by what appears to be a lack of a competitive bidding process — McKinsey seemed to seamlessly transition from working with CIA, to NSA, to ODNI via no-bid contracts, these people said, despite lingering skepticism over the firm’s effectiveness.