Management and Training Corporation
Management and Training Corporation
Sales :$254 million (1998 est.)
NAIC :62431 Vocational Rehabilitation Services; 561210 Correctional Facility Operation on a Contract or Fee Basis
Management and Training Corporation (MTC) provides an at-risk population with job training programs that include vocational, academic, and social skills. As the largest contractor for the U.S. Department of Labor, MTC runs 27 Job Corps centers and sites that offer vocational training in a variety of programs, such as auto mechanics, office skills, and welding. It also operates job placement services, helping some 9,500 persons find jobs every year. MTC uses its experience in job and academic training to manage ten jails and correctional facilities, mostly in Texas. There inmates may learn English as a second language, anger management, vocational skills, and how to overcome substance abuse problems. The company works with state and local governments to make sure both inmates and communities benefit from their private prison programs. MTC is the nation’s third largest company operating private correctional facilities.
Preliminary Developments in the 1960s and 1970s
In the early 1960s many people changed their thinking about poverty in the United States, especially after reading Michael Harrington’s 1962 book The Other America, which argued that about 50 million ignored Americans were more or less stuck in poverty. “What emerged in the mid-1960s was an almost unbroken intellectual consensus that the individualist explanation of poverty was altogether outmoded and reactionary,” wrote Charles Murray in 1984. “Poverty was not the fault of the individual but of the system.”
With that consensus President Lyndon Johnson in 1964 began his War on Poverty with legislation that provided job training and other antipoverty programs. The Job Corps was authorized by the Job Training Partnership Act. In 1965 Morton Thiokol, a Utah-based company most famous for making rocket boosters, became involved in the job training business when it began managing the Clearfield Job Corps Center in Clearfield, Utah.
Entrepreneur Robert Marquardt, Ph.D., headed Morton Thiokol’s training effort. He was born in Dayton, Ohio, to two teachers. By the age of eight he was working and learning skills from talented individuals in many fields. He cleaned and repaired furnaces, did yard work, took care of farm animals, raised vegetables and sold them door-to-door, and followed his parents’ advice always to work hard and read many books. While in high school in World War II, he hired 17 other students to help in his tree cutting company. In 1944 he volunteered for the Navy and became a gunnery officer/navigator.
In 1950 Marquardt entered Denison University to earn a business degree. Meanwhile, he continued his business ventures, selling sporting goods, sweaters, and perfume. After graduating from Denison, he joined the U.S. Air Force Procurement team as an aerospace salesman/technical representative, which gave him knowledge of contracts, electronics, weapons, and salesmanship. Then he left Air Force Procurement to start his own technical consulting firm representing various companies in their sales negotiations and contracts with the Air Force.
In 1958 Thiokol recruited Marquardt to move from Ohio to Utah to head its sales organization as the company’s first vice-president of Thiokol Aerospace Marketing. He traveled widely selling Thiokol products and programs, including propulsion systems used in the Minuteman ICBM and, eventually, the Space Shuttle.
In 1965 Marquardt started Thiokol’s Economic Development Operation to run Job Corps centers. He expanded the firm’s educational programs for state governments and the federal government’s Department of Labor, Bureau of Indian Affairs, Commerce Department, Office of Economic Opportunity, Department of Housing and Urban Development, and Office of Education. In an interview, Marquardt said he was happy to promote education and training, instead of selling weapons systems that could destroy millions of people.
The Job Corps programs targeted disadvantaged youth aged 16 to 24 who needed assistance so they could get a job and be self-sufficient citizens. According to The United States Government Manual 1997/98, Job Corps provided “diagnostic testing of reading and math levels; occupational exploration programs; world of work training; basic education programs; competency-based vocational education programs; counseling and related support services; work experience programs; social skills training; intergroup relations; recreational programs; meals, lodging, and clothing; health care; and child care.”
In addition to the Clearfield center, by the 1970s Thiokol managed the Atlanta, Georgia Job Corps Center; the Charleston, West Virginia Job Corps Center; and the Turner Job Corps Center in Albany, New York. Then a major turning point occurred.
Forming MTC in 1980
In 1980 Morton Thiokol decided to end its Job Corps programs and other low-profit ventures to emphasize its rocket motor production. Dr. Marquardt and others in the firm’s Education and Training Division persuaded Morton Thiokol executives to sell the division.
Three others cofounded the Management and Training Corporation, incorporated on December 11,1980, under the laws of Delaware. Samuel T. Hunter worked nine years with Thiokol before becoming MTC’s vice-president in 1980. In 1999 he continued to serve as the company’s executive vice-president in charge of training and a member of the Inside Board of Directors. Bernie R. Diamond helped Dr. Marquardt in Thiokol’s education division before serving as an MTC vice-president from 1980 to 1998. He also worked as the national director of community relations for Job Corps. In 1999 he remained on MTC’s Outside Board of Directors. Jane A. Marquardt, a partner in the Ogden, Utah law firm of Marquardt, Hasenyager & Custen since 1977, served as an MTC director and legal counsel from 1980 to 1999.
In the September 13, 1998 Salt Lake Tribune, Bernie Diamond recalled, “After we convinced them to sell it to us we mortgaged everything to buy it. We were making a big gamble. The government could have cancelled funding for the Job Corps program that year.” But it did not.
MTC early on organized a distinguished group of directors, including Dr. Terrel H. Bell, President Ronald Reagan’s Secretary of Education. Others included Rodney H. Brady, Ph.D., the assistant secretary of the U.S. Department of Health, Education and Welfare from 1970 to 1972 and president of Ogden, Utah’s Weber State College from 1978 to 1985. Later Brady became the president/CEO of the Mormon church’s Deseret Management Corporation. Another original board member was Robert T. Heiner, who retired in 1991 after ten years as the president, CEO, and chairman of Utah’s First Security Bank.
On December 3, 1980 Lynn W. Merrill and Larry Merrill incorporated Meridian Publishing Company, Inc. in Utah. In 1984 its name was changed to Meridian Publishing, Inc., a wholly owned subsidiary of MTC. Scott Marquardt, the son of Robert Marquardt, served as Meridian’s president and then in 1991 became MTC’s president. MTC spun off Meridian as an independent firm based in Ogden. It published the Utah Report for The Economic Development Corporation of Utah.
MTC’s Job Corps Operations in the 1990s
Management and Training Corporation in the late 1990s operated 27 Job Corps centers or satellites. In addition to its original four centers, it ran other centers or satellites in Edinburgh, Indiana; Sedro-Wooley, Washington; Chicago; Cincinnati; Cleveland; Dayton, Ohio; Denison, Iowa; Manhattan, Kansas; Honolulu; Makawao, Maui, Hawaii; Kwajalein, Marshall Islands; Indianapolis; San Bernardino, California; Drums, Pennsylvania; Kittrell, North Carolina; Philadelphia; Portland; Washington, D.C.; Lopez, Pennsylvania; Shreveport, Louisiana; Reno, Nevada; Troutdale, Oregon; and Astoria, Oregon.
About 90 percent of Job Corps students lived in center dormitories during their training. MTC offered its students vocational training in accounting, auto mechanics, business and clerical skills, construction trades, culinary arts, welding, health occupations, retail sales, and surveying, as well as training to become opticians and computer service technicians. Some students received academic instruction, whether in English as a second language, high school classes to prepare them for the General Education Development (GED) exam, or local college classes. MTC daily offered more than 6,200 hours of classroom instruction.
MTC is committed to being a leader in the areas of job training, education, and corrections. We will be a leader by implementing our plans to achieve high performance standards and goals; maintaining a foundation based on integrity, accountability, and excellence; providing long-term growth and stability, while ensuring fiscal responsibility; creating opportunity through a positive environment for personal growth and development; empowering employees to implement innovative ideas for continuous improvement; and building esteem and pride by celebrating our diversity and accomplishments.
In August 1998 President Clinton signed into law the Workforce Investment Act that contained “all the new rules under which Job Corps will operate,” according to an article in the Winter 1999 Job Corps in Action, a periodical published by Management & Training Corporation. Based on the new law, Job Corps National Director Mary Silva then issued a series of specific challenges. By the year 2000, Job Corps was expected to cut the dropout rate by 20 percent, involve 50 new national and regional employers, and have 75 percent of all graduates earn at least $8 an hour at a full-time job within six to 12 months after their initial placement. Silva also stated, “There is no question that outreach and admissions staff need to reach Hispa-nics, the fastest growing segment of our population and the one with the largest percentage of youth. The current number of Spanish-speaking staff within Job Corps is insufficient.”
Starting in the Private Prison Industry in the 1980s
In 1983 the Corrections Corporation of America (CCA) in Nashville, Tennessee, became the nation’s first for-profit company to build and manage prisons and other corrections facilities for local, state, and federal government agencies. For example, CCA in 1984 built a 68,000-square-foot detention center in Houston for far less money and much quicker than typically done by the Immigration and Naturalization Service.
Because of a general crime increase starting in the 1960s, it was not surprising that prisons were busting at the seams by the early 1980s. By June 30, 1985, for example, the nation’s federal, state, and local prisons housed 490,000 inmates. The decade of the 1980s would record a 9.1 percent overall growth rate in the number of prisoners.
Thus by late 1985 about two dozen facilities, out of a total of more than 4,000 U.S. jails and prisons, were owned or managed by private firms as a way to relieve the burden on public correctional agencies. “We get so many calls that we don’t even have to do any marketing,” said an American Corrections Corporation executive in the October 30, 1985 Financial World.
That huge demand for prison services led Management and Training Corporation in 1987 to enter the new industry by managing the Eagle Mountain Community Correctional Facility in Desert Center, California. MTC’s leaders felt that their experience in job training was a great background that could be used to rehabilitate inmates and prepare them for life after prison.
Some, however, criticized private prisons. For example, the American Bar Association (ABA) in 1986 passed a resolution to halt what it called the “rush toward total privatization” of government facilities until complicated constitutional and economic issues were resolved. In the March 17,1986 Fortune, the ABA’s Laurie Robinson expressed her concerns about the possibility of private prisons declaring bankruptcy and abusing prisoners.
MTC Correctional Work in the 1990s
By 1992 state and federal prison overcrowding resulted in courts ordering 45 states to reduce the number of inmates in at least some of their prisons. About this time MTC began operating its second prison: the Maraña Community Correctional Treatment Facility in Maraña, Arizona.
In August 1995 the company opened its third such facility, the Promontory Community Correctional Center in Draper, Utah, designed to prepare inmates for parole. That prison’s 240 inmates arrived within 90 days of their parole dates. At Promontory, inmates received driver’s licenses, wrote resumes and found jobs, and started checking accounts.
“I’ve been very anxious to try it (privatization),” said Utah’s Governor Mike Leavitt about his state’s first private prison. “It’s met all my expectations.” The governor pointed out in the September 16, 1995 Deseret News that it cost MTC $37 a day to house, train, and feed the Promontory prisoners, but the state would charge $55 to $58 for the same services.
Soon MTC opened four other correctional facilities: Brad-shaw State Jail in Henderson, Texas; Dawson State Jail in Dallas, Texas; Garza County Regional Juvenile Center in Post, Texas; and Gregg County Detention Center in Longview, Texas.
In 1998 MTC won a bid in which it replaced CCA as the manager of two Texas prisons, a contract worth $61.5 million over five years. Effective January 1, 1999, MTC managed the Diboll, Texas Correctional Center and the Billy Moore Correctional Center in Overton, Texas. Both were prerelease facilities with at least 500 beds. With the addition of those two Texas prisons, MTC ran ten private prisons across the nation.
In December 1998 Utah state officials sent a request for proposals to four private prison firms that earlier had prequal-ified to bid during a failed attempt to turn a state women’s prison over to the private sector. The four firms—MTC, CCA, Wackenhut, and Cornell Corrections—submitted their bids by March 1999 to build a 500-bed prison.
Meanwhile, the Utah Legislature in 1999 debated several bills concerning private prisons. All four prison firms hired prominent local lobbyists to represent their interests in this public policy dispute.
The need for more Utah facilities came from a 250 percent increase in the state’s prison population from 1984 to 1999. FBI statistics indicated Utah’s crime rate had risen to ninth in the nation, so the state scrambled in the 1990s to find somewhere to house its mushrooming prisoner population.
In 1999 MTC operated no overseas prisons, although one had been approved but not yet funded in South Africa. MTC also had done some research and consulting work for Canada and New Zealand, but Dr. Marquardt said his firm’s focus remained on serving clients in the United States.
Becker, Craig, and Amy Dru Stanley, “The Downside of Private Prisons,” Nation, June 15, 1985, p. 728.
Burton, Greg, and Judy Fahys, “Lawmakers See Privatized Prisons in the Correction System’s Future,” Salt Lake Tribune, March 3, 1999, p. A8.
Collins, Chris, “Job Corps Successes ‘Dubious,’ Report Says,” Detroit News, November 20, 1998, p. A8.
Donaldson, Amy, “Facility Gives Parolees a Chance,” Deseret News, September 16, 1995.
Edwards, Alan, “Advisers Vote to Unionize at Job Corps,” Deseret News, March 23, 1996, p. B1.
_____, “Discipline Giving Corps Better Image,” Deseret News, September 30, 1996.
Fields, Gary, “Privatized Prisons Pose Problems Not a Panacea, States Discover, Despite Savings,” USA Today, November 11, 1996, p. 3A.
Gehrke, Robert, “Legislature Holds the Key to Easing Prison Problems,” Salt Lake Tribune, February 24, 1999, p. D3.
Mitchell, Lesley, “Ogden Firm Private Prison Innovator,” Salt Lake Tribune, September 13, 1998, pp. E1, E4.
Murray, Charles, Losing Ground: American Social Policy, 1950-1980, New York: Basic Books, 1984.
Mylar, Frank D., “Utah Should Give Private Prisons a Chance,” Deseret News, February 3, 1999.
Nielsen, John, and H. John Steinbreder, “Second Thoughts on Private Slammers,” Fortune, March 17, 1986, p. 10.
Seligman, Daniel, “Making Crime Pay,” Fortune, June 29, 1992, p. 111.
Stevens, Catherine, “Are We Ready for This Growth Industry?,” Financial World, October 30, 1985.
—David M. Walden