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Good Investments: Teaching Texas Inmates About Business Can Turn Criminals Into CEOs

Good Investments: Teaching Texas Inmates About Business Can Turn Criminals Into CEOs
Photos by Troy Fields

"This is not about charity. This is about opportunity."

-- Jeremy Gregg, chief development officer, 
Prison Entrepreneurship Program

A short while into a 30-month sentence for buying a stolen trailer, James Cornish received a peculiar postcard in his Plainview prison cell.

It was from a group called the Prison Entrepreneurship Program. Even in prison, it seemed, there was no escape from junk mail. Cornish set it aside and didn't think much of it until a guy from that organization named Marcus Hill rolled in with a video and a spiel.

Hill said he had served five and a half years of a 17-year bit for possession of seven pounds of weed. He got that postcard, too. It changed his life. Now he was a recruiter. He went from prison to prison and preached the gospel of business education.

There was no shortage of rehabilitative or educational programs in the Texas Department of Criminal Justice. Many of them promised to hook you up with Jesus. But PEP was the only one that promised to hook you up with CEOs.

There was an "entrepreneurship boot camp," a business plan competition, a re--entry program upon release with transitional housing and continued education. It appealed to Cornish's business goals. He was an independent truck driver at the time of his arrest, and was in such a hurry to grow his business that he'd taken a shortcut. Cornish bought a flatbed trailer knowing full well it was stolen.

"It was a quick, easy way to make a bunch of fast money," says Cornish, who at 32 still looks every bit the linebacker he was at Los Angeles Valley College.

Prison didn't end his ambitions; it just interrupted them. And PEP retooled them: Cornish still wanted a bunch of money, but now he was prepared to get it the right way. He was prepared to work hard and put in the time.

He already had a truck waiting for him on the outside, so he was able to find work in a matter of weeks after his release in 2011. He says he bought "a raggedy truck" and pieced it together. Fast-forward two years, and Cornish is running six trucks and "leasing" outside drivers -- finding them work and collecting a cut. He says he's grossed more than $5 million and has bought two homes.

If one were partial to cheesy metaphors, one could say that PEP's participants are sort of like that raggedy truck, and the program's core philosophies -- rooted in both character development and business acumen -- are the tools to piece it together.

Now in its tenth year, the Prison Entrepreneurship Program boasts a significantly lower recidivism rate than not only the general released population but also of five major offender rehabilitation organizations.

One hundred percent of its graduates are employed within 90 days of release; 73 percent find work within 30 days. The average wage is more than $11 an hour.

 

While PEP is about to launch its program in TDCJ's Sanders Estes unit, it has operated solely from the privately run Cleveland Correctional Center, about 40 miles north of Houston. Participants are accepted from prisons across the state after a rigorous application process.

Despite its own significant stumble five years in when it was discovered that founder Catherine Rohr had engaged in inappropriate relationships with four graduates and had to resign, the program continues to attract volunteer executives and business owners -- "repeat attenders," in local parlance -- as well as interest from other state correctional departments. But other prison systems have yet to implement anything like it -- PEP appears to be the only program of its kind in the nation. That might be because it serves a demographic that is easy to ignore or even look at in practical terms: Nationally, hundreds of thousands of offenders are released each year. Many of them will commit new felonies and go right back in.

If a system could even up those odds -- if it could look at a group of drug dealers, thieves and murderers and see potential taxpaying, productive members of society, then those people would become more than just ex-offenders. They would become a good investment.

"General George S. Patton said, 'When compared to war, all other forms of human endeavor shrink to insignificance.' Clearly, General Patton has never had his business plan critiqued by you."

-- PEP Class XXI participant to 
business plan adviser

Return on investment is where it's at.

Jeremy Gregg, PEP's chief development officer, made this point at a series of TED talks in 2012. Delivering easily digestible stats in high-energy bursts, Gregg assumed the role of pitchman -- a carnival barker urging the audience to look at the untapped market potential inside his "gated community."

Gregg, an executive MBA with a history in nonprofits, first volunteered for PEP in 2007. Looking at the nation's correctional system through a purely financial lens, he saw a black hole.

"This is a deeply troubling financial issue," he told the audience. "We will pour $74 billion...into corrections this year."

Speaking strictly as a taxpayer, Gregg said, "I wouldn't have a problem with it if it worked, but it doesn't." That's when the startling statistics flashed on the screen behind him: According to national recidivism statistics, half of the 700,000 offenders released in 2012 were predicted to return in 2016, having committed a new felony. That's one crappy ROI. But graduates of the six-month program were a different story, Gregg told his audience. These guys learn skills. They use college-level textbooks and the AP writing style guide, and study Harvard MBA cases. And, as Gregg is fond of pointing out, "These guys literally read and discuss Dostoevsky's Crime and Punishment while sitting in prison."

Not all inmates are eligible for the program: Sex offenders are prohibited, as is any inmate with current gang ties or recent and significant disciplinary actions. Inmates must also be within three years of release. For each six-month block, there are approximately 6,000 eligible inmates in TDCJ. About one in four return postcards expressing interest in applying. In return, they get a roughly 20-page application packet; about two-thirds actually apply. Then there's more reading requirements, a test and an interview. About 47-48 percent were convicted of a violent crime -- murder, manslaughter, aggravated assault or robbery. The average participant is serving his second sentence. (The program's directors have chosen to offer it only to male prisoners because they make up the overwhelming majority -- 93 percent -- of the total Texas inmate population, according to recent statistics.)

 

Bert Smith (center) became the PEP's CEO afer five years of volunteering.
Bert Smith (center) became the PEP's CEO afer five years of volunteering.
Courtesy of PEP/photo by Israel Thompson

And their mentoring doesn't stop at the prison gate: Gregg told audiences that one of the keys to PEP's success is an inside-out approach in which volunteers continue to work with offenders after their release, and offenders continue to take classes.

"If all we do is train them on the inside, pat them on the back and say, 'Good luck to you,' there's a good chance we're going to train a drug dealer how to leave prison with a better marketing strategy," Gregg said. "And that's not what we want to do."

According to a report on PEP by Baylor University's Institute for Studies of Religion, "Studies show that a former inmate's most vulnerable and impressionable time actually occurs in the first 72 hours following release."

That's why every PEP participant is, upon release, met by a case manager who drives him to his family's home, a halfway house or one of PEP's transitional homes in Houston and Dallas. And his studies don't end at the gate, either -- newly released participants are expected to complete 20 "Entrepreneurship School" (or "eSchool") workshops in which they learn sales, marketing and personal finance. Eligible graduates can win a cash bonus for investment in their business.

Sure, it's the nice thing to do. But it's not just designed with ex-offenders in mind -- PEP's directors say it serves the public as well. These guys aren't simply peppered with platitudes and released into society with a cheerful disposition. Every man who graduates from PEP saves Texas taxpayers an average of $21,000 a year, according to the Baylor study.

Individually, that may not sound like much, but the study points out that by 2012, the state's correctional system was sucking $3.3 billion from the budget. Moreover, according to the Baylor study, PEP grads have a three-year recidivism rate of just under 7 percent, compared to the state average of 23 percent.

The heart of PEP is the business plan competition. Over six months and 1,000 classroom hours, participants craft an idea for a business, then pitch it, Shark Tank-style, 120 times, to volunteers. At the end, three winners are chosen, but all graduates receive a certificate of entrepreneurship from Baylor.

These practical ambitions exist within a framework known as the Ten Driving Values. These range from the more grounded -- Accountability and Innovation -- to those of a more touchy-feely sort, like Love and Fun.

Cornish latched onto the tenth one: Wise Stewardship, which states in part, "We will apply donors' funds as promised...We use funds intelligently, efficiently and strategically to achieve maximum benefit for all whom we serve."

For Cornish, this means that when he signs a contract, he delivers.

"If I tell a company I'm going to have ten trucks there [and] we're going to complete this job in five or six days, that's what I'm going to do," he says. "I don't care if I have to drive a truck...24 hours a day for five days; I'm going to do it. I'm going to get the job done."

"There but for the grace of God, in many cases, I could be sitting not in a pinstriped blue suit but a blue jumpsuit."

-- Bert Smith, CEO, 
Prison Entrepreneurship Program

Nine years ago, Bert Smith, a venture capitalist and Princeton-educated economist (with a JD from UT-Austin tossed in for good measure), was sitting at his weekly Executives Association of Houston breakfast meeting, listening to a woman named Catherine Rohr talk about her strange new prison rehabilitation program. Smith was sold. He told her he'd like to volunteer as a business plan adviser.

"I think maybe I didn't realize it when I went to breakfast that morning, [but] after I heard her speak, I really felt a desire to give back," Smith says. "That sounds very lofty, but it was actually very simple. I just felt like, wow, you know, I've had some ups, I've had some downs; maybe I can bundle up that mess and share it with somebody else where it'll really make a difference."

 

Program graduate James Cornish (right), talking with driver Marlon Martin.
Program graduate James Cornish (right), talking with driver Marlon Martin.
Photo by Troy Fields

As profiled in a 2012 Inc. story, Rohr at that time was working for a Manhattan private equity firm and commuting regularly to prison. Specifically, she had found God in her twenties and, as part of a ministry, brought the gospel to Texas prisons. But in between all the Jesus talk, according to the Inc. story, she found that inmates often "exhibited many of the same qualities she looked for when she met with founders as an investor."

By 2004, Rohr had left New York for Houston and founded PEP. An attractive, dynamic speaker, she had no trouble gathering volunteers and media attention. So of course the media were on standby in 2009 when Rohr confessed a transgression and PEP nearly imploded: In the midst of a divorce, Rohr engaged in what have only been described as "inappropriate relationships" with four PEP graduates. Suddenly, the focus wasn't on all the men the program had helped in the previous five years, but on a scandal. As Kris Frieswick reported for Inc., the Texas Department of Criminal Justice, fearing Rohr was a "security risk," conducted an investigation and banned her from ever entering any Texas correctional facility -- one of the rare times a person has been punished by being forced out of prison. Rohr had no choice but to step down from the program she had created.

Whatever concerns prison officials may have had about the program's future were likely tempered by its track record up until that time. Even if Rohr had faltered personally, her formula had been proven a success.

Jason Clark, a spokesman for TDCJ, told the Houston Press in an email that, in 2004, "It was an unknown, but PEP officials were very passionate and were convinced that the program could help tackle one of the biggest barriers for offenders -- employment. Also, the program's approach in pairing successful executives in the corporate world with offenders who had some business skills was unique. Ultimately, the program showed promise, and now, almost ten years later, there are numerous success stories of former offenders who have started businesses and become taxpaying members of society."

But by the time of Rohr's departure, Smith was willing to move from volunteer to CEO. His trips to prison over the years had given him a new outlook.

He may not have felt that way before walking through the prison gates, but after he really got to know the inmates, he says, he saw them "as human beings, not sort of as caged animals, and human beings whose life stories were raw, who in most cases made bad decisions in extremely difficult and unforgiving circumstances. Honestly, I began to have a lot more empathy for them, and felt that if they were willing to commit to living a new life with new values...then I was willing to do what I could to help them."

Around the time Smith joined PEP full-time, an ex-offender named Al Massey became the program's executive relations manager. A big part of Massey's job is recruiting volunteers, like Rohr once did, and perhaps one of his best selling points is himself.

On Halloween night 2003, the 53-year-old Massey was drunk-driving his truck along Beltway 8 when he smashed into the back of a truck that had stalled in the right lane. That truck burst into flames and the driver was killed. Massey pleaded guilty to intoxication manslaughter and was sentenced to six years.

He'd had 35 years of sales management experience, came from a loving family and had a clean record. He'd also been married three times. He never thought he had a drinking problem. He started in sales when three-martini lunches still helped close deals. His thinking was: I never drink at home, so therefore I can't be an alcoholic.

Prison changed that. He had plenty of time to think, and he did whatever he could to keep his mind occupied. He read every day, did crossword puzzles. He took whatever jobs he could, and when the PEP postcard came, he filled it out and sent it back. He figured a business class would help his goal of keeping his mind intact. Soon, he says, he discovered the program was just as much about developing character.

Sixteen other inmates from his unit took the bus to Cleveland Correctional, "and we bonded, and we found out what brotherhood was all about," Massey says. "Because, you know, in prison, it's hard to sometimes let down your guard, because you don't want...people to consider you to be weak or anything like that."

Upon release, Massey moved into one of PEP's transitional homes, found quick work at a moving company that was run by a PEP grad, then got a less back-breaking sales position before the spot at PEP opened up.

Now Massey gives presentations to college business classes, church groups, civic groups, any groups that will listen, to find volunteers.

"You write a business plan, but that's not the nuts and bolts," Massey says of the program. "The nuts and bolts is to make you realize who you were supposed to be, and not who...you've become so far in your life. That there's always a chance to change. Because fresh starts are available."

 

Longtime PEP volunteer Kirsten Berger says she loves witnessing the participants' transformation.
Longtime PEP volunteer Kirsten Berger says she loves witnessing the participants' transformation.
Courtesy of PEP/photo by Israel Thompson

"How often can you be around people who are in the middle of completely remaking themselves as individuals?"

-- Bill Frank, PEP volunteer

On the phone, Al Massey can be soft-spoken.

But here, in the Cleveland Correctional Center's cavernous gym, where 129 participants of PEP's 22nd class are being welcomed to thunderous applause by more than 100 volunteers, Massey is an electrifying emcee.

The volunteers, mostly middle-aged, mostly white men and women in business attire, form two parallel lines as the inmates, a mostly young mix of black, white and Latino in blue jumpsuits, stride down the aisle created by the volunteers, smiling as they slap palms and shake hands. Many inmates take the time to greet each of the volunteers, whose first names are printed on laminated tags, and thank them for coming.

It's a downright cheery, celebratory atmosphere that includes chocolate chip cookies and a sound system blaring "Hip Hop Hooray." If it weren't for the jumpsuits, the event could be mistaken for a pep rally at a high school for slightly older students.

In a bit, the inmates will set up rows of folding chairs that face each other, so PEP participants and volunteers can introduce themselves and talk for a few minutes. It's like platonic speed-dating. Some of the volunteers, like Kirsten Berger and Bill Frank, have been coming for years. In her makeup, slacks and heels, Berger seems like the last person you would encounter in a prison gym, but there might not be anyone else here who appears to be having as much fun.

A few years back, when she attended her first PEP class as part of her certification for becoming a life coach, Berger wasn't quite sure what to think. She saw the joy and hope on display behind this bastion of barbed wire and was haunted. "These guys are criminals," she thought. "They aren't supposed to be smiling."

But after a while, she says, she saw the transformation. She says that these criminals were really trying to become something.

"Nobody should be defined by the biggest mistake they ever made in their life," Berger says. No doubt about it, these guys screwed up. They made terrible decisions, but, Berger says, "Your choices can suck, but people don't suck."

Berger says she got hooked by witnessing in the participants a "complete transformation of a human being," which is also why Frank, the general manager of business development at Chevron, stuck around.

Like Berger, Frank is among the "God squad" contingent of PEP. He met a PEP grad at church and was intrigued enough by the guy's stories that he decided to check it out himself -- provided his new friend accompanied him. He'd go to prison only via the buddy system.

"I thought I'm just a, you know, suburban white guy, professional job...no tattoos," Frank says. "What do I have in common with these guys?"

As you might have guessed, the story ends with Frank realizing he had more in common with them than he thought. And much of that had to do with their being, like him, husbands and fathers. There was something there to connect with.

And as also happened with Berger, Frank said the real appeal was in the changes he was witnessing: "The fancy word is 'transformation,'" he says. "You're around all these people who are changing their lives right in front of you. And you know, how often do you see that?"

Striking a more subdued pose was Jaime Shaw, a first-timer who'd heard about PEP from a friend who'd volunteered. Shaw had especially personal and professional motivations to check out the program: He knew just how difficult it was to start a career with a criminal record.

 

Five years ago, he and his business partner founded Greenstream International, an Austin-based recycler and remarketer of used electronics, not just out of entrepreneurial zeal but out of necessity: Both men had criminal records.

Unlike the men in PEP, Shaw didn't have a felony; but a series of misdemeanors, including assaults -- the byproduct of years of drug and alcohol addiction -- closed a lot of doors. Shaw found out that, whether it's a few years in prison or a plea-bargained probation, "These punishments go on in perpetuity."

If on the rare occasion Shaw scored an interview with a potential employer, once they got to his record, "the whole tenor of the interview change[d]." To Shaw, a job rejection carries a sharper sting for an ex-offender. For non-offenders, it's an unfortunate roadblock on the path to the next interview.

But for "people like us, when [you're] being told no, you're really just being told, 'Hey, you're not good enough, and you don't belong here.'"

Today, even though Greenstream's 200 employees span several U.S. states as well as a facility in Hong Kong, Shaw still feels the sting of those interviews.

He and the company's co-founder are "now in our thirties, and we're fathers...we're business owners. We are still facing the consequences of those convictions, you know, ten, 12 years later. What we did as boys, we're still paying for as men."

That's why Greenstream hires ex-offenders, and why Shaw and his business partner are eager to talk about that practice with other employers.

"Usually," Shaw says, "the first thing out of another business person's mouth is, 'Oh, yeah, and you can pay them less.'" (For Shaw, it's quite the opposite: He says Greenstream's ex-offender employees are paid well. In return, "What we get is lower turnover; we get a better-invested employee, and we get people that have just a higher level of gratitude for what they're being given, and recognize it as a real opportunity and not just a place to spend eight hours of their day.")

Knowing full well what this latest class of PEP participants will soon be facing, Shaw was eager to pull up a folding chair and chat with each of them.

Two and a half years ago, Cornish sat in one of those chairs. He'd done the work to get through the application process, he'd done the work for six months of classes and business plan competition, and, on the outside, he does the work from about 4 a.m. to 8 or 9 p.m. during the week, and he spends the weekend fixing up his trucks for Monday. Some day he'll take a more hands-off role -- a position he says his wife would just as soon have him take sooner.

"My wife tell me all the time, 'Hey, baby, why don't you put on some clean jeans today and a clean T-shirt and some nice shoes?'" he says. "That's not me. I don't wear that."

It's all part of that "wise steward" value Cornish likes so much. For six months, PEP's staff and volunteers invested in him. When he was released, one of the program's board members lent him money to buy more equipment. A lot of people have a lot invested in James Cornish. He doesn't want to let them down. One day, he'll drive less and focus more on management and writing contracts. Getting there is all on him.

"I'm headed that way," he says. "But until it comes, it's me."


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