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Riordan’s Stealth Reformers 

Dual role for corporate consultants in school power plays

Wednesday, Mar 17 1999
Photo by Cindy AndersonThe name McKinsey never surfaces in the debate over L.A. school reform and next month’s school-board election. But McKinsey & Co., one of the globe’s leading business consulting firms, is a player — both in the school superintendent’s office and in private with business leaders who’ve pounced on the school-board incumbents.

There’s really only one reason you haven’t heard the name McKinsey: It’s a secret. McKinsey doesn’t want the public at large to know what its consultants are doing — even though the work is being performed free of charge as a public service. As in the private sector, McKinsey has operated in the background, behind closed doors, preferring to let the "clients" take the credit or blame for the results.

For about 18 months, the official client has been L.A. schools Superintendent Ruben Zacarias, whom McKinsey consultants have assisted on a variety of initiatives. But the firm’s key patrons are Mayor Richard Riordan and local corporate executives determined either to control or shake up the school-district bureaucracy.

Tracking the footprints of McKinsey is, in effect, an exercise in looking at how Mayor Riordan — the city’s would-be "education mayor" — and his allies have tried to control, or at least influence, senior district officials and the way they run the school district. It also demonstrates Riordan’s longstanding and increasing frustration at his inability to sway a school district that he embraced years ago as a philanthropist, and more recently dismissed as shamefully inept.

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Riordan’s displeasure over the school system is evident in his current campaign to toss out three school-board incumbents. But prior to this effort, the mayor and his allies used back-channel methods more in keeping with Riordan’s experience as a millionaire venture capitalist. His old world was McKinsey’s world, and it’s not surprising that Riordan’s team would lead McKinsey to the door of the school district.

It was Riordan’s hard-charging education capos, former Assemblyman Mike Roos and UCLA management guru Bill Ouchi, who brokered McKinsey into the Los Angeles Unified School District in the first place, in the fall of 1997. And last fall, when Roos and Ouchi joined the newly formed Committee on Effective School Governance — consisting mostly of business leaders critical of the school district — McKinsey also came onboard, as chief consultant.

Last month, this "citizens committee," as it is known, released a withering criticism of how the district conducts business. Key elements of the report echo confidential documents prepared in the course of McKinsey’s work with senior district administrators. The report calls for the school board to get out of the way and let Superintendent Zacarias do his job, but it also explicitly fails to endorse Zacarias. Mayor Riordan, meanwhile, has backed his school-board slate of three challengers and one incumbent, bankrolling the effort with his own money and with contributions raised mainly from the business people who are the spine of the citizens committee.

"I hate to sound paranoid," said Eli Brent, who heads L.A. Unified’s administrators union, "but it looks like the McKinsey consultants prostituted themselves. It’s like the therapist who trades on your secrets after you unburden yourself."

McKinsey was not in a position to offer a defense — because company policy forbids even confirming the existence of a McKinsey consultation. But attorney Harold Williams, the co-chairman of the citizens committee, was quick to say that McKinsey had carried no confidential district intelligence into his hands. According to Williams, McKinsey synthesized information about the practices of other school districts across the country, and analyzed "appropriate roles" for boards of directors of both corporations and public bodies, while examining, in contrast, "how this school district was operating."

As for L.A. Unified, the citizens committee needed no inside information, said Williams, a onetime chairman of the U.S. Securities and Exchange Commission, and long involved in corporate and foundation efforts to assist schools. "The way the district functions is pretty transparent to most of us on the committee. We know L.A. Unified. We ourselves have been at board meetings and have been dealing with the school district over the years."

Still, McKinsey’s several roles inevitably raise the question of whether the consultants acted as a fifth column inside L.A. Unified to get information on the school board, including whether Superintendent Zacarias and his staff were up to the job, and whether this knowledge contributed to the mayor’s decision to push for a new school board — the body that hires the superintendent.

"When you attack Rome, you attack the pope," said Brent of the administrators union. "I feel very strongly that Mayor Riordan is actually attacking the superintendent."


Zacarias himself declined to question McKinsey’s actions — in an interview, he said he was glad to receive the company’s help, and that he feels comfortable about calling on them in the future. Of course, it’s not as though he originally had much choice in the matter.

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