A 2003 interview posted by Corrections Corporation of America with co-founders T. Don Hutto and Tom Beasly reveals that the company’s first contract involved detention for immigrants in Houston.
Hutto and Beasley tell the story about how they had won a contract to detain immigrants, but they didn’t have a facility, so, on New Year’s Eve 1983, they drove from motel to motel in the Houston area until they found one that would provide them the space to start their venture, “to crawl before we walked, so to speak,” says Hutto.
Then, when 87 “new aliens” were delivered, Hutto completed last-minute preparations with a Wal-Mart shopping trip, using his American Express credit card. With federal money coming in for immigrant detentions, CCA was in business.
Q. From where did the idea of private corrections originate?
Tom Beasley: The idea itself was cocktail conversation in 1980, at a presidential fundraiser at the Hyatt Regency Hotel in Nashville, Tennessee. The topic came up about corrections problems in Tennessee. A college said, “you’ll never solve that problem until you get the private sector involved.” And I thought, here we are in the home of Hospital Corporation of America, there are lots of the same kinds of dynamics involved and I started wrestling with the idea. After 6-8 months, I got Doctor Crants to come in with me and we agreed to put up $75,000 each, which neither of us had, and we got it started. We then went to see the commissioner of corrections at the time. I didn’t think he would receive this idea very well, but surprisingly he said it was an idea who’s time had come. I didn’t know exactly how to proceed. I asked the commissioner if he had any suggestions and he said he knew the very person. He called Don Hutto, who was the highest state corrections director in Virginia and had just been elected president of ACA. After explaining the idea, Don said he would be happy to be involved. There the three of us were — ready to go.
Q. What about you three made it work? What was the environment like among government agencies? Legislators? financial supporters?
Tom Beasley: We were fortunate in that the three of us had different skills sets. Don has referred to it as a three-legged-stool. Don ran the corrections side, Doc ran the financial side and raised money and I ran the marketing side. We took everything we knew to make it happen and to stay afloat. We went seven years without making a profit. We were producing at the ground level. We had facilities from the very beginning. It just took a long time to turn the corner with enough critical mass to begin to grow the company seriously.
Don Hutto: Politically our timing was really right. It was a time when corrections and prisons were taking an increasing about of state budgets. Historically, corrections has not been a very high legislative priority. But court actions, a harder look at sentencing and a strong push for reform caused an increase in state budgets. There was a lot of support for privitization when we began.
Tom Beasley: Judges were telling corrections systems they had to make changes. The expense of these changes fell on the states. Everybody wanted it resolved.
Don Hutto: We were primarily looking at the federal government to house undocumented aliens, to crawl before we walked so to speak. But we knew we could do much more. We could help take the pressure off the corrections systems. It was a fortuitous time for all of us.
Tom Beasley: Another thing that gave us a boost was when 60 Minutes called and wanted to do a piece on the Chattanooga Penal Farm, an adult male facility in Tennessee. It turned out to be a really positive piece. So, we got copies and marketed with it until 60 Minutes made us stop. It gave us instant credibility.
Q. How did you take the private corrections concept and turn it into a concrete business?
Don Hutto: We were working on getting our first contract with the INS. We worked with them on the idea then they submitted a request for proposal with maybe 60 days to respond. So we got busy and created the initial design of the facility. Tom found some property we could use. The INS did award us the contract but only gave us 90 days to build the facility. We knew there was no way to open in 90 days. In the mean time, we had to open a temporary facility to satisfy the contract.
Tom Beasley: Don and I went down to Houston on New Years Eve in 1983. We rented a car at the airport and drove around the major thoroughfares to find somewhere to put 200 illegal criminal aliens by February 1. Literally, we stopped in 10 motels then finally about 3 a.m. found one that might work. I asked if they would be interested in leasing or selling the hotel. After negotiating with the owner for several hours, he finally agreed.
Don Hutto: We had to do some renovations to the motel but we still managed to have everything finished a few days early. Just as we were beginning to think we were ahead, the INS called and had just picked up 87 new aliens and wanted us to take them that night. We didn’t have staff, personal items, anything. We took my American Express to Wal-Mart and bought personal items and some other items we needed. Around 10 p.m. that night, we starting booking the inmates and finished just before midnight. Tom Beasley: Our goal had been to get a contract in the first two years. We exceeded that goal and managed to get two in the first year and four or five by the second.
http://www.ccasource.com/story.cfm?id=23
MoPress 