Democratic hopeful Pete Buttigieg takes heat for McKinsey-Loblaws consulting

Pete Buttigieg, mayor of South Bend, Indiana and a candidate in the Democratic primaries, is drawing mild political flak for his consulting stint with premier strategy firm McKinsey & Company, which included price analysis work for Loblaws.

Fresh from graduating from Oxford as a Rhodes Scholar, Buttigieg, like many top graduates, took on a job as a management consultant. He signed on with McKinsey, joining the Chicago office in 2007. In the three years he was at the firm, Buttigieg worked on projects in healthcare and retail, and on US government projects in Iraq and Afghanistan related to economy and environment.

McKinsey has been receiving criticism from major media for its consulting work, including advisory work that it has performed for autocratic regimes such as Saudi Arabia, and advisory work for pharmaceutical companies navigating the opioid crisis. The firm was also criticized by The New York Times for holding a lavish corporate retreat miles from a Uighur detention centre in China.

Perhaps hoping to find an illusory smoking gun that “Mayor Pete” advised the wholesale murder of dissidents as a top-flight management consultant, opponents called for the release of his client list from McKinsey. Last week, the consultancy agreed to waive Buttigieg’s non-disclosure agreement and green-lit the release of his full client roster.

Buttigieg’s clients included Blue Cross Blue Shield of Michigan, Best Buy, the EPA, the US Department of Energy, the US Department of Defense, and Loblaws. Overall, Buttigieg described his early-career consulting work as crunching numbers, building models, and working on spreadsheets; he wasn’t yet the partner giving the powerpoint presentation.

Buttigieg’s consulting work for Loblaws involved a six-month stint in Toronto in 2008, during which time he analyzed the effects of price cuts on numerous items in hundreds of stores. He named the computer he used to build models on “Bertha,” according to his autobiography, which briefly mentioned the consulting gig.

Loblaws and the Buttigieg campaign both said that his advisory work had nothing to do with Loblaw’s bread price-fixing scheme, which lasted from 2001 to 2017. The Competition Bureau of Canada alleged in January 2018 that bread wholesalers Canada Bread and Loblaws sister company Weston Bakeries had conspired with major supermarket chains to inflate bread prices by at least $1.50, according to court documents filed by the Bureau. Loblaws famously offered a $25 gift card to consumers in the wake of the scandal to pacify public opinion.

Prior to his Loblaws assignment, Buttigieg in 2007 did analytical work to identify savings in administration and overhead for Blue Cross Blue Shield of Michigan. He told The Atlantic that his work focused on rent, travel costs, mail, and printing, and not on policy or premium costs at the insurance company.

In January 2009, the insurer announced it would cut up to 1,000 jobs or nearly 10% of its workforce. Buttigieg told The Atlantic he was taken off the efficiency project after a three-month stint in 2007, well before the company cuts. “I don’t know what the conclusions were or what it led to. So it’s tough for me to say,” he said in regard to whether his work precipitated the job cuts. 

At Best Buy in Chicago, Buttigieg advised on how the company could sell more energy efficient products. For the EPA and Department of energy, he researched how energy efficiency could reduce climate change, his campaign said.  

Buttigieg’s work in Iraq and Afghanistan for the Department of Defence centred around boosting the countries’ economies and entrepreneurship, according to his campaign. That included a strong focus on the extraction and marketing of Afghanistan’s natural resources, such as iron, copper, gold, and cobalt.

“There’s nothing particularly sizzling about the list of clients that I served,” Buttigieg told MSNBC last Tuesday.

In his autobiography, Buttigieg ultimately described his consulting career as lacking the “deep level of purpose that I craved.” He went on to serve as an ensign in the US Navy Reserve, and was elected mayor of South Bend in 2011 at age 29, becoming the youngest mayor of a US city with at least 100,000 residents.

Now, the 37-year-old Buttigieg is one of the top four candidates seeking the Democratic Party nomination. He is currently leading the polls for the Iowa caucus (21.5% from stats site FiveThirtyEight), which kicks off the nominating calendar on February 3, 2020. He sits fourth overall, however, polling at 9.6% – behind Elizabeth Warren (14.7%), Bernie Sanders (17.8%), and Joe Biden (26.3%).