On the campaign trail, Gov. Glenn Youngkin spoke about the need to cut wait times at the DMV, rid schools of critical race theory and improve mental health services.
In office, the former private equity CEO often relied on consultants to make good on those promises.
The administration has brought on consultants from Deloitte, Boston Consulting Group and McKinsey & Company to find cost savings in procurement, redesign state behavioral health programs and speed up job growth. Collectively, the contracts amount to millions of dollars in state spending directly controlled by the Youngkin administration.
The administration has also hired outside help to help advance Youngkin’s education agenda. In February, it paid $10,000 to Kimberly Richey, a consultant who’d previously worked under former President Donald Trump, to identify and root out “divisive content” from the classroom. In August, she was hired as a deputy superintendent at the Virginia Department of Education.
VDOE brought in a separate consultant, Sheila Byrd Carmichael, for a controversial rewrite of the state history standards. And Youngkin’s former superintendent of public instruction, Jilian Balow, signaled in her surprise resignation letter last month that she may continue on as a consultant.
Youngkin, who has said he’s “flattered” by talk of a possible presidential run, is hardly the first governor to bring in outside help. Former Gov. Ralph Northam used consulting firms throughout the early days of the COVID-19 pandemic to help source PPE, distribute vaccines and staff up call centers dealing with unemployment claims. But in creating a new “office of transformation,” Youngkin has signaled his desire to bring in staff who may be able to see old problems with fresh eyes — or, some critics say, ones better suited to his conservative agenda.
Aubrey Layne, a Republican who served in the cabinets of Youngkin’s two Democratic predecessors and on Youngkin’s transition team, said he applauded Youngkin for bringing in firms to help untangle bureaucratic problems.
“Look, many of the problems in state government have been going on for years,” said Layne, who now serves as executive vice president of governance and external affairs for Sentara Healthcare. “There's no guarantee that consultants will fix them, but at least they bring in a different perspective.”
Youngkin is currently seeking an additional $15 million in funding for the transformation office run by Eric Moeller, a former partner at McKinsey and Boston Consulting Group.
Sen. George Barker (D–Fairfax), who is currently involved in budget negotiations, said Virginia had a skilled state workforce and various commissions — like the Joint Legislative Audit and Review Commission — capable of doing the evaluation and policy development work Youngkin was outsourcing.
“I think we need to make sure that we're doing that as much as we can, from an internal perspective,” Barker said “Rather than just relying on somebody from the outside who doesn't really have a lot of perspective and, and knowledge of how things have operated in Virginia over the many years.”
Office of Transformation
During his campaign, Youngkin took particular aim at two state agencies that struggled during the pandemic: the Virginia Employment Commission and the Department of Motor Vehicles.
“We are going to launch a governmentwide audit. We're going to root out fraud and waste and increase transparency,” Youngkin said in a campaign speech several days before his 2021 election win. “And we are starting with the Virginia Employment Commission and the DMV.”
Youngkin brought in consultants from McKinsey during his transition. On his first day in office, he created a new “Chief Transformation Officer” — a title largely associated with the management consulting world — with the goal of building “a culture of transparency, accountability, and constructive challenge across our government.” Their highest priority, Youngkin laid out in his executive order, was improving service at VEC and the DMV.
Last year’s bipartisan, two-year budget set aside $10 million for the new office in its first year. The budget required Youngkin to approve of any spending and Moeller to keep top lawmakers on the General Assembly’s money committees apprised of how funds are being spent.
Under Youngkin state agencies, often with the transformation office's help, have used funds to bring in outside help from a number of consulting firms, including:
- Boston Consulting Group to find cost savings in state procurement and help evaluate potential Medicaid managed care vendors
- Deloitte to set new goals for behavioral health services and improve workforce development programs
- McKinsey & Company, under separate contracts, to develop fresh plans for mental health services and another to revise economic development plans with the goal of drawing 400,000 new jobs.
A spokesperson for Youngkin declined to make Moeller available for an interview.
But in April 1 and Jan. 1 letters to lawmakers, Moeller argued his office had made major strides. He noted that in-person times at the DMV had dropped from 40-45 minutes on average in 2019 to 10 minutes in March 2023. The VEC’s backlog in initial claims was nearly gone, Moeller wrote in January, and his office was working on new goals that include redesigning and simplifying the claims and appeals process. (Moeller wrote in his April letter that they'd completed "processing of all unemployment claim backlogs.")
Barker argued that work largely built on momentum already underway under Northam, Youngkin’s Democratic predecessor. VEC still faces a backlog in appeals claims for unemployment insurance. And some groups criticized the agency’s move to dismiss appeals from more than 16,500 people because it says they missed deadlines.
Marty Wegbreit, director of litigation at the Central Virginia Legal Aid Society, told the Richmond Times-Dispatch the move amounted to a “vast denial of due process of law.”
The transformation office has adopted some private sector tools, including goal setting with objectives and key results (OKR) and monthly management reviews, according to Moeller’s letter. It also hired three deputy secretaries to work under him.
Democrats have repeatedly criticized Youngkin for not making good on campaign promises surrounding transparency. The governor’s appearance in a nearly $300,000 “Welcome to Virginia” tourism ad produced by his campaign advertising firm sparked an inquiry from the Office of the State Inspector General. That office ultimately determined the state tourism office did not violate procurement policy — and lawmakers punted on passing a bill that could’ve ended the office’s exemption from state procurement law.
‘Divisive concepts’
A few weeks after Youngkin’s Jan. 15, 2022, swearing in, the Virginia Department of Education signed a $10,000 contract with a consultant named Kimberly Richey.
The lawyer had recently served the Trump administration, where she’d worked under then–Secretary of Education Betsy DeVos as acting assistant secretary for civil rights. In that role, Richey signed a letter saying the administration did not believe transgender students could legally play on school sports teams that correspond with their gender identity.
She’d gone on to serve as a fellow for Parents Defending Education, a conservative group that claims schools are “indoctrinating” students with left-wing ideologies on topics like race and gender identity. At PDE, Richey helped develop model legislation and school policies that sought to eliminate critical race theory from schools, according to a resume obtained by the transparency nonprofit American Oversight via public records request.
Critical race theory does not appear on curriculum in Virginia schools, but Youngkin helped popularize the term as a catch-all for equity programs during his gubernatorial campaign. Once in office, the administration turned to Richey for help to make good on his promise to rid the state of content he claimed pitted students against each other.
VDOE hired Richey on Feb. 8, 2022, to “produce mandatory reports, as outlined in Executive Order One,” and work with the department to remove the content, according to a statement of work obtained via public records request by VPM News.
Several weeks later, Secretary of Education Amy Guidera sent Youngkin a report on VDOE’s progress. It took aim at VDOE materials that mentioned “equity,” a reading list on the department’s website that named a book related to CRT and a math pilot program that critics claimed lowered standards.
The report was met with scorn by the Virginia NAACP and Democrats, who argued Youngkin was seeking to whitewash the teaching of race.
In August, VDOE hired Richey to become its next deputy superintendent of school quality, instruction, and performance “at the conclusion of a publicly advertised recruitment,” according to spokesperson Charles Pyle.
Pyle declined to make Richey available for an interview. In an email, he said the 30-day report was created in-house by VDOE with assistance from Richey.
“The department believed a consultant was necessary to meet the timeline of Executive Order One given the transition in the leadership of the agency and utilized a state contracting option for academic consulting services,” Pyle wrote.
VDOE went on to spend $15,000 on consultant Sheila Byrd Carmichael to help rewrite state history and social standards despite an internal process that had been underway since 2020. The standards Carmichael produced were widely criticized for inaccuracies and omissions, and the Virginia Board of Education forced the department to rewrite them once again.
James Fedderman, president of the Virginia Education Association, argued Youngkin would be better off tapping into the knowledge of “award-winning” educators and administrators in the commonwealth.
“Certainly, there are lessons to be learned from other high achieving states, but too often Youngkin's administration default is to pass up Virginia experts in favor of out-of-state consultants with political agendas,” Fedderman said in an email. “They just can't seem to trust Virginia educators."
A national phenomenon
In Virginia, consulting firms have become a bigger political presence. Deloitte has donated more than $250,000 to political candidates across party lines since 1996, with more than one-third of that total coming in the last two years. It currently retains nine lobbyists and was the eighth largest state vendor in the last fiscal year, with the state spending $110 million on the company’s services.
Consultants have also become an increasingly common force at the federal level, according to Rachel Augustine Potter, a political science professor at the University of Virginia specializing in bureaucracies and rule-making. She said that presidents from both parties have turned to contractors for strategic planning that might previously have been done in-house or to bring in “surge capacity” for special projects.
“A lot of these consulting firms are very good at helping you think through how to restructure in organizations,” Potter said.
At the same time, Potter noted the firms have been ensnared in national scandals. McKinsey paid a settlement of $600 million to 49 states, including Virginia, for its role in marketing opioids. The company also worked with e-cigarette company Juul while simultaneously working with the Food and Drug Administration, according to a New York Times investigation (the company denied any conflict of interest, noting that it did not advise the FDA on specific drugs or products).
Deloitte won a $44 million no-bid contract under the Trump administration to develop software intended to manage vaccine rollout that clinicians in Virginia and other states said experienced numerous glitches.
Some contracts have also raised questions about transparency. Unlike state employees, contractors’ internal work is generally not subject to Freedom of Information Act requests. Under Northam, the Virginia Department of Emergency Management heavily redacted its nearly $600,000 contract with McKinsey related to PPE and refused to release any of the company’s recommendations to the Virginia Mercury.
Potter said government use of the firms comes with other downsides, including the potential for diminished internal capacity: “How are they supposed to govern if they don't have the staff and capacity of people who think deeply about problems?”
But Aubrey Layne, who said he occasionally works with Youngkin from his seat on the board of the Port of Virginia, stressed that consultants were just one way to help make progress on sticky issues.
“I would suggest to you the governor is not taking everything these consultants say,” Layne said, “but it's helping him get different points of view.”
Update, April 7: This article has been updated to clarify the VEC backlog.
