[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]


                PRISON TO PROPRIETORSHIP: ENTREPRENEUR-
                   SHIP OPPORTUNITIES FOR THE FORMERLY 
                              INCARCERATED

=======================================================================

                                HEARING

                               BEFORE THE

                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              HEARING HELD
                            OCTOBER 23, 2019

                               __________

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]                               
                               

            Small Business Committee Document Number 116-054
             Available via the GPO Website: www.govinfo.gov
             
                               __________
                               

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
38-061                      WASHINGTON : 2020                     
          
--------------------------------------------------------------------------------------             
            
                   HOUSE COMMITTEE ON SMALL BUSINESS

                 NYDIA VELAZQUEZ, New York, Chairwoman
                         ABBY FINKENAUER, Iowa
                          JARED GOLDEN, Maine
                          ANDY KIM, New Jersey
                          JASON CROW, Colorado
                         SHARICE DAVIDS, Kansas
                          JUDY CHU, California
                           MARC VEASEY, Texas
                       DWIGHT EVANS, Pennsylvania
                        BRAD SCHNEIDER, Illinois
                      ADRIANO ESPAILLAT, New York
                       ANTONIO DELGADO, New York
                     CHRISSY HOULAHAN, Pennsylvania
                         ANGIE CRAIG, Minnesota
                   STEVE CHABOT, Ohio, Ranking Member
   AUMUA AMATA COLEMAN RADEWAGEN, American Samoa, Vice Ranking Member
                          TROY BALDERSON, Ohio
                          KEVIN HERN, Oklahoma
                        JIM HAGEDORN, Minnesota
                        PETE STAUBER, Minnesota
                        TIM BURCHETT, Tennessee
                          ROSS SPANO, Florida
                        JOHN JOYCE, Pennsylvania
                       DAN BISHOP, North Carolina

                Adam Minehardt, Majority Staff Director
     Melissa Jung, Majority Deputy Staff Director and Chief Counsel
                   Kevin Fitzpatrick, Staff Director
                            
                            
                            C O N T E N T S

                           OPENING STATEMENTS

                                                                   Page
Hon. Nydia Velazquez.............................................     1
Hon. Steve Chabot................................................     2

                               WITNESSES

Mr. Shon Hopwood, Associate Professor of Law, Georgetown 
  University Law Center, Washington, DC..........................     4
Mr. Gary Wozniak, President and CEO, RecoveryPark, Detroit, MI...     6
Ms. Corinne Ann Hodges, CEO, Association of Women's Business 
  Centers, Washington, DC........................................     7
Mr. Jerry Blassingame, Founder and CEO, Soteria CDC, Greenville, 
  SC.............................................................     9

                                APPENDIX

Prepared Statements:
    Mr. Shon Hopwood, Associate Professor of Law, Georgetown 
      University Law Center, Washington, DC......................    26
    Mr. Gary Wozniak, President and CEO, RecoveryPark, Detroit, 
      MI.........................................................    30
    Ms. Corinne Ann Hodges, CEO, Association of Women's Business 
      Centers, Washington, DC....................................    34
    Mr. Jerry Blassingame, Founder and CEO, Soteria CDC, 
      Greenville, SC.............................................    40
Questions for the Record:
    None.
Answers for the Record:
    None.
Additional Material for the Record:
    Statement of Hon. Hakeem Jeffries............................    44
    Quotes by Brian Hamilton, CEO and Founder of Inmates to 
      Entrepreneurs..............................................    47

 
   PRISON TO PROPRIETORSHIP: ENTREPRENEURSHIP OPPORTUNITIES FOR THE 
                         FORMERLY INCARCERATED

                              ----------                              


                      WEDNESDAY, OCTOBER 23, 2019

                  House of Representatives,
               Committee on Small Business,
                                                    Washington, DC.
    The committee met, pursuant to call, at 11:36 a.m., in Room 
2360, Rayburn House Office Building. Hon. Nydia Velazquez 
[chairwoman of the Committee] presiding.
    Present: Representatives Velazquez, Finkenauer, Golden, 
Kim, Crow, Davids, Chu, Veasey, Evans, Schneider, Delgado, 
Craig, Chabot, Balderson, Hern, Burchett, and Stauber.
    Chairwoman VELAZQUEZ. Good morning. The committee will come 
to order.
    I am pleased to be chairing this hearing today to discuss 
entrepreneurship training opportunities for the incarcerated 
and formerly incarcerated. Our committee has a longstanding 
tradition of working in a bipartisan manner on behalf of 
America's 30 million small businesses. It is through this work 
that we strive to ensure programs at SBA are effective and seek 
ways to encourage entrepreneurship.
    Today, we have the opportunity to delve into an issue that 
has the potential to help people who have been traditionally 
locked out of the labor market. Let me begin by talking about 
our criminal justice system. The United States has one of the 
highest incarceration rates in the world. Despite having only 5 
percent of the world's population, we have 25 percent of the 
world's inmates.
    People are locked up in nearly 7,000 facilities across the 
country--109 federal prisons, 1,719 state prisons, 1,772 
juvenile correctional facilities, and 3,163 local jails. Sadly, 
there are more jails than colleges and universities in the 
United States. That alone is telling. In our federal prison 
facilities today, nearly half of those imprisoned are serving 
time for non-violent drug offenses. It is expensive to put 
people behind bars. In fiscal year 2017, the average cost to 
incarcerate a federal inmate was $36,299 a year, or $99.45 a 
day.
    Congress took steps last year to enact legislation to 
reform our criminal justice system. I am a proud supporter of 
the First Step Act, which gives nonviolent offenders a chance 
to reenter society. While this legislation is a step in the 
right direction, the problem is overwhelming, and solutions 
must come from multiple sources.
    That is why I am holding this hearing today, so we can 
explore innovative ways to give returning citizens the support 
they need to rebuild their lives after their release from 
prison, and to work to break the destructive cycles of 
recidivism which are tragically too high and are tearing apart 
too many communities across the country.
    After paying their debt to society, former inmates return 
to their communities with hopes and goals of starting fresh. In 
2018, more than 37,000 incarcerated individuals were released 
from federal prisons, and more than 97 percent of the nation's 
180,000 federal inmates will eventually be released. The 
recidivism statistics are sobering, showing that if we do not 
take steps now, nearly half of those released will be 
rearrested within 8 years.
    That is because returning citizens face steep challenges 
when faced with the often daunting task of reintegrating into 
society. Many lack the education and skills needed to engage in 
a 21st century economy. Many struggle to find stable and 
affordable housing. And put simply, many employers do not want 
to hire them because of the stigma associated with serving time 
in prison. At the end, this serves no one. In fact, it leads to 
dim employment prospects, reduced earnings potential--and yes, 
it increases the rate of recidivism.
    What can we here on this Committee do to be a part of the 
solution to this crisis? We can start by looking at the role 
that entrepreneurship can play in helping formerly incarcerated 
individuals get back on track to pursue meaningful and healthy 
lives. Supporting these individuals also offers the potential 
to build wealth and create greater economic mobility.
    In the coming weeks, the committee plans to introduce 
several bills which will require SBA's resource partners to 
provide counseling and training to individuals in prison and 
post-release. The in-prison services would be carried out by 
Women's Business Centers and Small Business Development 
Centers. Federal prisoners would be eligible for intensive, in-
depth classroom instruction combined with one-on-one mentoring. 
SCORE would be required to provide formerly incarcerated 
individuals with regular one-on-one mentoring, workshops, and 
on-line instruction specifically tailored to their unique 
needs.
    SBA's resource partners, with more than 1,000 centers 
located across the country, are perfectly suited and very well-
positioned to carry out these services in federal prisons.
    Entrepreneurship is the stepping stone to new opportunity 
for individuals who are locked out of the labor market. 
Unlocking opportunities for the formerly incarcerated will 
empower and enable them to rebuild their lives, build wealth, 
and promote lasting economic growth.
    With that, I thank each of the witnesses for joining us 
today, and I look forward to your testimony.
    I would now like to yield to the Ranking Member, Mr. 
Chabot, for his opening statement.
    Mr. CHABOT. Thank you, Madam Chair.
    The search for meaningful work up on release from prison 
can be a long and difficult journey, particularly for those who 
have been removed from society for an extended period of time. 
To overcome those challenges, many inmates acquire valuable 
skills and work experience through programs like Federal Prison 
Industries. I have worked with Federal Prison Industries for 
many, many years here from vocational training opportunities 
and other educational courses.
    Today, we will be hearing from witnesses representing 
organizations that help individuals reenter society by 
developing their entrepreneurial spirit. Successful reentry 
programs utilize various strategies for preparing individuals 
to reenter society as productive citizens.
    I, like many of my colleagues on both sides of the aisle, 
believe strongly that these programs are not only beneficial to 
those individuals who will be reentering, but also to our 
society overall. We owe it to these returning individuals and 
to all of our fellow citizens to make sure that we are good 
stewards in this rehabilitation.
    As former President Bush noted in his 2004 State of the 
Union Address, ``America is the land of second chances, and 
when the gates of prison open, the path ahead should lead to a 
better life.''
    I, and I think many of us, look forward to the testimony of 
our panel today and learning more about their recommendations 
for alleviating barriers to entrepreneurship when they reenter 
society.
    I would note that I do have a school group that I have to 
take care of for short period of time so I will be leaving but 
then coming back, and we will be ably filled in by one of my 
colleagues. I believe Mr. Hern will be filling in for me.
    And with that, I yield back.
    Chairwoman VELAZQUEZ. Thank you, Mr. Chabot. The gentleman 
yields back.
    If committee members have an opening statement prepared, we 
ask that they be submitted for the record.
    I would like to take a minute to explain the timing rules. 
Each witness gets 5 minutes to testify and members get 5 
minutes for questioning. There is a lighting system to assist 
you. The green light will be on when you begin, and the yellow 
light means there is 1 minute remaining. The red light comes on 
when you are out of time, and we ask that you please stay 
within that timeframe to the best of your ability.
    I would now like to introduce our witnesses.
    Our first witness is Mr. Shon Hopwood. Mr. Hopwood is a 
distinguished lawyer and professor of law at Georgetown 
University. His research and teaching interests include 
criminal law and procedure, civil rights, and the 
constitutional rights of prisoners. He received a J.D. as a 
Gates Public Service Law Scholar from the University of 
Washington School of Law. Mr. Hopwood's legal journey began in 
federal prison where he learned to write briefs for prisoners 
while serving a 12-year sentence for bank robberies. Two 
petitions were later granted review by the United States 
Supreme Court and he won a number of other cases in federal 
courts throughout the country.
    Welcome, Mr. Hopwood. I am pleased to have someone with 
your expertise on the panel.
    Our second witness is Mr. Gary Wozniak. Mr. Wozniak is the 
founder and CEO of RecoveryPark in Detroit, Michigan. In his 
current role, Mr. Wozniak leads the overall vision and 
framework for the nonprofit which exists to create jobs for 
people with barriers to employment. Mr. Wozniak has first-hand 
knowledge of what it is like to start anew after serving time 
in prison. Prior to launching RecoveryPark, he was a successful 
stockbroker who became addicted to drugs. He served 4 years in 
federal prison for using his clients' money to fuel his 
addiction. Mr. Wozniak turned to entrepreneurship and opened up 
several pizza franchises.
    Welcome, Mr. Wozniak. I look forward to hearing your story.
    Our third witness is Ms. Corinne Hodges, the CEO of the 
Association of Women's Business Centers, where she is working 
tirelessly to secure economic entrepreneurial opportunities for 
women. Prior to joining the association in January 2019, Ms. 
Hodges led the public relations team for Kia Motors 
Manufacturing in Georgia. She also has experience as a small 
business owner. Ms. Hodges helped at her mother's woman-owned 
trucking company in Michigan and also ran her own advertising 
and public relations agency. Thank you for being here.
    Now I would like to yield to our Ranking Member, Mr. 
Chabot, to introduce our final witness.
    Mr. CHABOT. Thank you, Madam Chair. Jerry Blassingame is 
the Founder and CEO of Soteria Community Development 
Corporation and senior pastor of Soteria Christian Fellowship. 
He attended Columbia International University and studied 
architecture engineering at Greenville Technical College. In 
1995, he received a 20-year prison sentence but served 3-1/2 
years after being paroled in 1999. In 2018, he published a book 
Reclaimed, a memoir of his journey. He is passionate about 
helping those who have been incarcerated through reentry and 
helping them to become productive citizens. He has continued to 
fight for change in legislation since he was granted that 
pardon, and we thank him for being here today.
    I yield back.
    Chairwoman VELAZQUEZ. Thank you, Mr. Chabot.
    Mr. Hopwood, you are recognized for 5 minutes.

    STATEMENTS OF SHON HOPWOOD, ASSOCIATE PROFESSOR OF LAW, 
 GEORGETOWN UNIVERSITY LAW CENTER; GARY WOZNIAK, PRESIDENT AND 
  CEO, RECOVERYPARK; CORINNE ANN HODGES, CEO, ASSOCIATION OF 
 WOMEN'S BUSINESS CENTERS; JERRY BLASSINGAME, FOUNDER AND CEO, 
                          SOTERIA CDC

                   STATEMENT OF SHON HOPWOOD

    Mr. HOPWOOD. Well, thank you, Chairwoman Velazquez, and all 
members of the Committee for the opportunity to testify and for 
the enthusiastic support for the Prison to Proprietor Act.
    I will give you my instruction that I give, whether it is 
to the President of the United States, to members of Congress, 
to churches, to chambers of commerce, and that is my name is 
Shon Hopwood. I am an associate professor law at Georgetown 
University Law Center, and I committed a violent crime. But I 
am not a violent criminal.
    And I give that introduction just as a reminder that 
character is not static, people change, and the law should 
recognize this. And we should be in the business of giving 
second changes to people coming out of prison. It is good for 
society. It changes lives. It strengthens families. And it 
helps make our communities safer.
    I served nearly 11 years in Federal prison. I went into law 
while I was there. I now litigate cases in Federal court on 
criminal law and civil rights issues, including prisoner rights 
issues, and I studied the Federal criminal system as a legal 
academic at Georgetown. And I was also very fortunate to work 
and advise members of Congress and the President on the First 
Step Act, which I want to congratulate all of you for helping 
to pass because it has--well, I say it is two things at once. 
On the one hand, it is still quite modest reform, but on the 
other hand, I think it is the best criminal justice reform bill 
to come out of Congress in my lifetime. And I do want to thank 
you for that.
    But as it is called, it is the First Step Act, and we need 
so much more if we ever expect to reduce the number of people 
in our Federal prisons, and more importantly for this 
Committee, reduce the recidivism rate of people coming out of 
prison. And everyone should be interested in that. We have 
600,000 people that leave American prisons every year. We have 
around 30- to 40,000 people that leave Federal prison every 
year. We know that around 95 percent of people sentenced to 
Federal prison will one day return to the community. And we 
also know that the criminal justice system has now impacted so 
many more Americans. We have 113 million Americans who have 
someone in their close to immediate family who has been to jail 
or prison within their lifetime. And so this is often what I 
refer to mass incarceration as the civil rights issue of our 
day.
    So why prison entrepreneurship programs? Well, a couple 
things. We know that the biggest factor in reducing the 
recidivism rate of people coming out of Federal prison are a 
few things. One, employment, and two, stable housing. And this 
bill addresses the employment issue. People coming out of 
prison have an unemployment rate that is five times higher than 
the average American, and even higher than people had in the 
Great Depression. And people coming out of prison have a great 
deal of difficulty finding employment, both because of the 
stigma of having the Federal conviction, but also because there 
are 300,000 collateral consequences of a felony conviction. I 
thought that when I got out of prison I had served my time and 
that I would get to move on and get a second chance in life 
until I realized that someone with a felony conviction, you can 
be legally discriminated against in housing, employment, public 
benefits, voting rights. And just the little things like when 
parents of the children that my kids go to school with come and 
say, hey, can we send our kids over to your house, I get really 
nervous because I worry if they find out about my background 
how that will impact whether or not they want to send their 
kids over to my house. And so very few people get a true second 
chance. It is one of the reasons why I am not a great fan of 
the word ``returning citizen'' because returning second class 
citizen would be a more appropriate moniker for people coming 
out of prison.
    Given that we know that employment really reduces the 
recidivism rate, this bill really does that. It will help 
people. We have had very much success in Texas and other prison 
systems with prison entrepreneurship programs. In my written 
testimony I talk about the story of Marcus Bullock who served 8 
years in Virginia prison and came out and started Flikshop. He 
recently did a Tedx Talk, and he is a good example of what can 
happen when people get entrepreneurship training in prison. For 
many people that come out, particularly those that have 
committed violence and sex offenses, entrepreneurship is the 
only way for them to get gainful employment.
    And so because this bill will get at that particular 
problem, I encourage you to pass this into law. Thank you.
    Chairwoman VELAZQUEZ. Thank you, Mr. Hopwood.
    Mr. Wozniak, you are next.

                   STATEMENT OF GARY WOZNIAK

    Mr. WOZNIAK. Thank you. Good morning. Thank you, Chairwoman 
Velazquez, and to the entire Committee for having me here 
today. I came to testify because I am full support as well of 
the legislation that you intend to pass.
    I started an enterprise called RecoveryPark and we are a 
social enterprise in the city of Detroit, and our mission is to 
create jobs for people with barriers to employment. So people 
coming out of prison, people coming out of drug treatment 
plans. Obviously, from the introduction that I got it is a 
process that is near and dear to my heart because I did serve 
3-1/2 years in Federal prison from 1988 to 1991. And when I got 
out of prison I spent 3 months actively looking for a job, and 
my last job interview was with Enterprise Car Rental and they 
turned me down for a desk clerk job. I went home that night and 
I looked in the mirror and I said I am tired of people telling 
me no and I had to do something different. So I took my 
business skills that I developed as a stockbroker and I started 
looking at business opportunities.
    The easiest way for me to get into business from a capital 
standpoint was to go into a franchise operation, so I opened up 
a Jet's Pizza franchise. I do not think they are here in D.C., 
but I ended up owning four Jet's Pizza stores, and that was 
really the launch of an entrepreneurial career for me. So since 
the four Jet's Pizza stores, I have owned seven total 
businesses. And when the meltdown happened in 2008, I closed my 
businesses down because some of them were financial 
institutions that were lending money to people that wanted to 
start businesses and I could not borrow money cheap enough and 
get it out effectively in the marketplace.
    It was at that point that I went back to my roots of drug 
addiction to the treatment center that I went to in 1987, 
ShareHouse because they were struggling because of the 
meltdown, and I helped them reorganize financially. And that 
was where RecoveryPark was born. So it was a way to create a 
social enterprise that could create jobs for the people that 
are coming out of the prison system in the state of Michigan 
and give them a leg up with a permanent job and benefits and 
wraparound services around housing and transportation so that 
they really had an opportunity to become successful citizens.
    The last 30 years owning these businesses has been a real 
eye-opening experience for me because when I launched the 
businesses I did not have access to training and I did not have 
access to capital. I went to the people that were closest to 
me, my friends and family, to get access to capital, but even 
then I could not get traditional lending. I could not get SBA 
support. I could not get any of the traditional lines that an 
entrepreneur or a business startup would go after.
    So the opportunities that you are talking about today, had 
I had an opportunity while I was in Federal prison in Duluth, 
Minnesota, to become educated around how to run a business, how 
to start a business, how to access capital, and then when I got 
out of prison actually had microlending to come from the SBA or 
an SBA-supported institution I think would have given me a real 
leg up.
    As Mr. Hopwood talked about, so he talked about the 
necessity of jobs when people come out of prison. It is a 
little anecdotal, but my work over the last 30 years with 
returning citizens, basically, if somebody gets a job within 
their first 3 months of coming out of an institution, they are 
probably not going to go back and reoffend. If they cannot find 
work within their first 6 months, there is a 30 percent chance 
that that person is going to reoffend. If they cannot find work 
in 9 months, there is a 70 percent chance that that person is 
going to reoffend. And if they cannot find gainful employment 
and housing within a year, they are definitely going back to 
prison.
    Those are unconscionable statistics, okay? And we have an 
opportunity here today to change that. The First Offender Act, 
it was a great first step. This is a great second step to, you 
know, start getting rid of some of those barriers.
    Today, I sit on five nonprofit boards. I have owned seven 
businesses. I have got a social enterprise. I am the treasurer 
of two of the boards that I sit on. I am on a Financial 
Committee. I still cannot go mop floors in a nursing home by 
law because they are afraid I am going to steal money from the 
elderly clients that are in there. That is unconscionable. And 
there is no way to get around that with the rules the way they 
are set up. So this is an opportunity for us today to actually 
do something positive to give people the educational 
opportunities, to train them with the skillsets that they have. 
And I am telling you that educationally, a lot of people in 
prison might not have the traditional learning, but I guarantee 
you there are a lot of people in prison that understand 
customer service, that understand cash flow management, that 
understand, you know, supply and demand, the food chain of how 
a product gets into the marketplace. And if those skillsets can 
be channeled in a positive way and money applied to it, I think 
the world is their oyster. Thank you.
    Chairwoman VELAZQUEZ. Thank you, Mr. Wozniak.
    Ms. Hodges, you are recognized for 5 minutes.

                STATEMENT OF CORINNE ANN HODGES

    Ms. HODGES. Chairwoman Velazquez, Ranking Member Chabot, 
and distinguished members of the Committee, good morning, and 
thank you for convening today's hearing.
    My name is Corinne Hodges. I serve as the CEO of the 
Association of Women's Business Centers.
    Our organization supports the national network of women's 
business centers providing programming and advocacy to improve 
services to women entrepreneurs. So I am honored to be here 
today.
    The women's business center program is a public-private 
partnership with over 30 years of success in providing 
training, counseling, mentoring, and access to capital to women 
entrepreneurs across the country. What began as four 
demonstration sites in 1988 is now a network of 114 centers 
with more than 150 locations nationwide in no small part thanks 
to this Committee's support. In that time, women business 
centers have served more than 2 million women entrepreneurs 
leading to the creation and expansion of tens of thousands of 
new businesses and jobs. The women's business center program 
continues to fulfill its congressional mandate of ensuring that 
women's entrepreneurial drive is fueled by adequate resources 
to keep the small business engine of the economy thriving.
    It is the only program statutorily dedicated to serving 
economically and socially disadvantaged women. All of our 
centers live up to this mandate. But a number of our centers 
take that mandate even further by bringing their services into 
the state and Federal prison systems, both to men and women, 
and equip them with the training and knowledge needed to start 
their own business upon release from custody.
    Many more of our centers also offer specific training and 
resources to the formerly incarcerated who seek out business 
training after their release.
    The Missouri Women's Business Center ASPIRE MO class 
provide an illuminating example of what can be accomplished 
when undertaking entrepreneurship training in prisons. ASPIRE 
MO was launched in collaboration with the Missouri Deparmtent 
of Corrections Reentry Unit. It is a 20-week entrepreneurship 
course for felony offenders in the Women's Eastern Reception 
Diagnostic and Correctional Center, a state-run facility. The 
course focuses on all aspects of entrepreneurial training, such 
as financial literacy, use of credit cards and banking basics, 
formulating a business concept, and pitch development. They 
have also established systems with several of their bank 
partners to provide microloans that are not based on credit 
score or felony records. In addition, they utilize KIVA, a 
nonprofit that connects entrepreneurs to 0 percent interest 
loans and other crowdfunding platforms.
    The Women's Business Center at SNAP located in Spokane, 
Washington, teaches financial literacy classes in both the 
county jail and the local state prison. In their experience 
with this population they found a lack of credit history or 
poor credit as primary barriers to access to capital. In 
addition to business training, they encourage participants to 
visit microlenders for access to capital. They also teach 
clients about financial scams and predators in order to 
position them for success as entrepreneurs, avoiding disastrous 
credit terms and costly investments.
    There are additional examples of prison entrepreneurship 
training programs offered by women's business centers from 
California to Tennessee in the written testimony I have 
submitted for the record.
    Many women's business centers offer services specifically 
for the formerly incarcerated. The Women's Business Center of 
Northern Ohio, which operates locations in Cincinnati, 
Columbus, and Cleveland, recently participated in Reentry Week, 
along with a number of community partners. They offered a full 
day, small business workshop for formerly incarcerated 
individuals looking to start their own business. The workshop 
included strategic business planning, marketing strategy and 
development, financial literacy, and legal steps for starting a 
new business.
    The Wisconsin Women's Business Initiative Corporation 
(WWBIC) partners with community organizations who serve 
returning citizens and lend to individuals with criminal 
records. Current WWBIC client and former inmate Ed Hennings 
served 20 years in prison and is now the owner of three 
businesses. He first sought the assistance of WWBIC by taking 
all of the business education courses they offered. He 
eventually received a small loan through WWBIC. He now runs a 
successful barbershop and salon in Milwaukee, and he was 
recently approved for a $65,000 loan for his trucking business. 
His story, among many others, is a testament to the success 
that the formerly incarcerated can achieve with proper business 
training, counseling, and access to capital.
    Clearly, entrepreneurship has the power to create pathways 
to success while reducing recidivism. We need legislation that 
amplifies the work that several of our women's business centers 
are already doing for the current and formerly incarcerated and 
which allows us to build off that knowledge, expertise, and 
passion to take these services nationwide. We are confident 
that women's business centers and the Association of Women's 
Business Centers can be competent partners in that endeavor to 
help Americans returning home from incarceration overcome 
barriers to employment by utilizing their talent, skills, and 
ideas to start businesses that allow them to provide for 
themselves and their families.
    Chairwoman VELAZQUEZ. Thank you, Ms. Hodges.
    Mr. Blassingame, you are next.

                 STATEMENT OF JERRY BLASSINGAME

    Mr. BLASSINGAME. Thank you so much, Chairwoman, and Ranking 
Member.
    I really appreciate the opportunity to come here today to 
share my story. When I think about my story people wonder, how 
can a college-educated person go to prison? My story does not 
start with me going to prison; it starts as a 5-year-old kid 
who witnessed his mother getting murdered. And a lot of times 
we do not talk about the trauma that a lot of us who have been 
incarcerated face.
    While I was in prison, one of the things that really helped 
me was faith and knowing that people who cared about me came 
into prison. The faith community was there for me when no one 
else was there and it got me to understand that when I got out, 
I needed to change my life. I ended up serving on 3-1/2 years 
of a 20-year prison sentence. And every day of that 3-1/2 years 
I wrote down the plan for what I am doing now. And that is one 
thing I look for when I bring men into my program. I look for 
guys who have short-term and long-term goals. I look for guys 
who have been journaling, and I look for guys when they get 
ready to get out, they are ready to get into the community.
    So one of the things that helped us, in 1999, when I was 
released, there was nothing, no services that were helping 
people to start business, especially with criminal backgrounds. 
So a young black man in the South trying to start businesses. 
So here I am with a nonprofit. I was released in March of 1999, 
and in April of 1999, we started a nonprofit, had a charter, 
and the faith community rallied around me, pooled money 
together to help me to get this nonprofit off the ground.
    One of the things we did first was we went to one of the 
local nonprofits to partner with us. They gave us a house. They 
gave us a three-bedroom, two-bath house. We put four guys in 
it. And then we got another house. Now we had eight guys in our 
transitional housing program. No one would hire any of our guys 
so we started a landscape business. And we started cutting 
grass in the community, and the guys were making money.
    A local couple in our church donated nine dilapidated 
housing in a drug-infested neighborhood, and we got a $100,000 
grant from the Deparmtent of Commerce through the South 
Carolina Association of Community Development Corporations. So 
we were able to take unlikely bedfellows and use resources that 
were not allowed for reentry. So we became a community 
development corporation, and I soon found out that community 
development corporations help low- to moderate-income people 
gain wealth and have access to capital. So I am one of those, I 
can take something a little and make a lot out of it. And so we 
took that $100,000 grant and we leveraged it to $700,000 to 
build six three-bedroom, two-bath, low-income rentals for men 
once they graduated our program because no one would rent the 
guys housing once they graduated a 1-year program.
    So we found out that it was more than just housing and 
jobs. It was family reintegration. And so I also want to let 
you all know who are here that we just cannot look at starting 
businesses. We have to look at trauma. We have to look at 
financial literacy, family reintegration. The whole community 
has to come together. And also, I believe every agency in 
Washington has to work together.
    One of the things that I realized, too, is that agencies do 
not work together. And so if all the agencies could work 
together it would be great because we also got home funds from 
HUD which was an unlikely bedfellow to give money to a reentry 
organization. So these are just some of the things that we have 
done over the last few years.
    Five years ago, we started a deconstruction business where 
we tear down old houses in our city. This lumber was going into 
the landfill to be thrown away. Our guys started taking the 
lumber and we make reclaimed wood furniture from the lumber. So 
we train the guys who are getting out of prison in our 
woodshop. And so now we have a business that sells reclaimed 
wood furniture. So we are reclaiming wood and we are reclaiming 
lives. The wood that would have been thrown away, the men who 
are getting out of prison are taking that wood and making 
beautiful artwork.
    And so I just wanted to be here to let you guys know that 
there are a lot of Jerry Blassingames out there who do not have 
an opportunity. And if the faith community had not stepped up 
to the plate 20 years ago, I would not be here today. So I am 
thrilled to know that you all are thinking about doing 
something to help those of us who have criminal backgrounds, 
and especially, those that do not get education.
    And my last thing I want to say is that when I got out, I 
went back to finish my degree in architecture and I could not 
get a Pell grant because of a drug conviction. And so all these 
agencies have to work together to make sure that we get the 
proper resources that we need to be productive citizens. Thank 
you for your time.
    Chairwoman VELAZQUEZ. Thank you very much. Let me take this 
opportunity to thank all of you for being here, for having the 
opportunity to build, to make contributions to our community 
and for sharing your stories so that we can look at ways to 
provide tools to help more individuals given the fact that 
thousands of people are coming out of incarceration unprepared. 
They deal with the stigma. How can we help these individuals 
empower themselves and their families? Thank you so much for 
taking the time to be here with us.
    I would like to ask my first question to Ms. Hodges.
    You spoke about some of the women's development centers, 
approximately how many are around the country?
    Ms. HODGES. One hundred fifty locations.
    Chairwoman VELAZQUEZ. How many of those are already 
providing services in literacy and training that is needed to 
help these individuals?
    Ms. HODGES. That is a tough question to answer, Ms. 
Chairwoman, because first of all, all 150 locations obviously 
provide training and counseling. And so if a returned citizen 
enters into a women's business center, of course they are 
offered services. In terms of services inside the Federal 
facilities, I do not know exactly the number. We are receiving 
anecdotes and reports from centers all across the country, but 
I do not have specific data to note specifically which ones do 
and which ones do not, which ones did this year and did last 
year.
    Chairwoman VELAZQUEZ. Based on the research that we have, 
many incarcerated individuals lack basic literacy skills. It is 
important for participants in federal entrepreneurship training 
programs to have a strong foundation in financial literacy.
    Based on the legislation we are discussing today, do you 
feel that the elements in the bill will help address some of 
those issues?
    Ms. HODGES. Yes, Madam Chairwoman, we feel that the bill is 
adequate and it addresses through the comprehensive and 
intensive training the access to capital, the financial 
literacy, the business plan development and pitching, all of 
the elements that have been incorporated successfully with 
results throughout the women's business centers. We also 
believe that the legislation that has been discussed is 
adequate in terms of the resources that it brings to the table 
because without those resources, those women's business centers 
could not provide these services without sacrificing services 
to their existing clients.
    And I would also be remiss if I did not thank this 
Committee for their support in passing H.R. 4405, the Women's 
Business Center Improvement Act of 2019, which increases the 
authorization level for women's business centers and also would 
have to highlight the efforts of Senator Cardin on this issue 
with his bill, the New Start Act of 2019, which AWBC endorsed.
    Chairwoman VELAZQUEZ. Thank you.
    Mr. Hopwood and Mr. Wozniak, we have heard how veterans 
hire veterans because they understand the challenges they face, 
but also the training and expertise other veterans have after 
returning home. Do the formerly incarcerated who launch their 
own businesses tend to hire other former inmates? Do you have 
any data or experience in that respect?
    Mr. WOZNIAK. So good question. We hire almost exclusively 
people coming out of prison. In our 3-1/2 year project to date, 
we have hired 20 people. Nineteen of them are still employed. 
None have reoffended. None have gone back, violated probation 
or parole. We continue to provide support services to make sure 
that they are stable in the workforce throughout the first 3 
years because we feel 3 years is a good indicator. The $13 
million greenhouse we are getting ready to build will employ 
another 30 people and the majority of them will be coming out 
of the system as well.
    Chairwoman VELAZQUEZ. Thank you.
    Mr. Hopwood, yes?
    Mr. HOPWOOD. Chairwoman Velazquez, I do not have any data 
other than anecdotes. And when I see businesses run by people 
like Mr. Wozniak or other people that I know who are formerly 
incarcerated, they do tend to hire the formerly incarcerated. 
One of the people that works for my law firm, Joshua Boyer, is 
a person who I served time with in Federal prison and then 
hired to work with me on litigation when he got out. Marcus 
Bullock, the example I gave before, the owner of Flikshop hires 
almost exclusively people who are coming out of prison. So most 
prison entrepreneurs hire people coming out of prison in part 
because they do not view them with the same stigma that your 
average American would.
    Chairwoman VELAZQUEZ. Can you explain or discuss the 
importance of providing entrepreneurship training in prison?
    Mr. HOPWOOD. Yes. Because there are several groups of 
people, particularly in the Federal system, that it is 
difficult for them to find employment. And the groups of people 
I am thinking of people that commit sex offenses, particularly 
possession of child pornography which is a large segment of the 
Federal prison population. Those people have a very difficult 
time finding employment.
    I also think prison entrepreneurship makes a whole lot of 
sense for the Federal prison population considering so many of 
them are in for drug offenses. As Mr. Wozniak was saying, a lot 
of the people who committed drug offenses kind of have that 
hustle and that inner drive that matches up well with 
entrepreneurship. And I have seen a number of former Federal 
drug offenders get out and go into that sort of work.
    Chairwoman VELAZQUEZ. Thank you.
    My time has expired, and now I recognize Mr. Hern, Ranking 
Member of the Subcommittee on Economic Growth, Tax, and Capital 
Access, from Oklahoma, for 5 minutes.
    Mr. HERN. Madam Chairwoman, thank you so much.
    It really is an honor to listen to you all. A lot of people 
would think that you want people to feel sorry for you but that 
is not what it is at all. I mean, it is quite the opposite of 
that. They want you to be respected for serving your time and 
to get reacquainted with society for whatever those purposes 
might be.
    I will tell you, I have been a business owner for over 30-
plus years. McDonald's restaurants, banking, all kinds of 
things. Probably one of the greatest things that has happened 
in recent years was ban the box on applications. I have spent a 
lot of time in this area. I am probably guilty like a lot of 
entrepreneurs and business owners out there of saying you would 
be the employee of last choice. I think this stigma has been 
changing. I would like to applaud the previous Congress and 
President Trump for the First Step Act. But as you alluded to, 
it is really just the first step. I have spent a lot of time in 
our one-stop centers, our workforce centers, and had people 
tell me that one in three people that come in the door have a 
record. And while ban the box has been off of the applications 
for a few years now, still employers view that and they always 
go Google people so you get sort of the stigma of ban the box 
because of Google.
    And so it is about training and educating and changing our 
workforce centers, and we are working with the state right now 
and the governor to actually put somebody in the one-stop 
centers to get people back to work because we know that lowers 
the recidivism rates dramatically. And being from Oklahoma 
where we have if not close to the highest, the highest women 
incarcerated in the country, the majority of that is for drugs, 
and whether it is the dad or the mom, it has a tremendous 
impact on the families, the kids. We have a lot of businesses, 
entrepreneurs that are hiring women to get them acquainted back 
to the workforce, and the entire place are women who have come 
out of prison.
    I think all of our hearts changed dramatically, not to be 
sympathetic but to be more understanding. And as we go forward 
here, we can do more and more. There is a tremendous amount of 
workforce. I am not sure what we are going to do with the 
issues of the sexual predators. I do not see that being, anyone 
softening on those issues. But the other issues, whether it be 
for robbery as you did your time for, or whether it be for 
drugs, whether it be for, you know, both of you all for drugs. 
You die your time, and I applaud you all for going back and 
never giving up.
    We have to protect that opportunity. We have incarceration 
terms for the purpose of paying back your debt to society for 
what you did and breaking laws. But you should not have it held 
over your head for the rest of your lives. Obviously, there are 
certain jobs that it probably will be a long time before people 
who have been incarcerated can take, but as we look forward--
and what I would like to do, I am the Ranking Member on the 
Subcommittee for Capital Access and Growth, a huge 
entrepreneur. I have thoughts on the idea. We have talked about 
employment. I would like to just in the remaining time to go 
through, and I would like to start with Mr. Blassingame and 
just kind of work to our left. I am going to jump over you for 
just a second.
    What programs out there, I know the SBA is sort of 
softening at the opportunity to get loans, the microloans for 
people that have been incarcerated, but what are some of the 
other areas that you have seen a real detriment in trying to 
get help to start businesses?
    Mr. BLASSINGAME. Well, every area. You know, we have had to 
create our own, you know, streams. You know, one of the things 
that helped us back, you know, a few years ago in 2008 and 2009 
when the Feds had the IDA program, we used the IDA program 
which was not even for people with criminal backgrounds. We 
used it to fuel our entrepreneurs in homeownership. You know, 
so that people who were getting out of prison could gain 
access. So it was not even for us, but as a community 
development practitioner, I brought those resources into our 
organization and gave them to the people who were previously 
incarcerated. So we created a lot of homeowners and business 
owners through that.
    Mr. HERN. Okay.
    Mr. Wozniak?
    Mr. WOZNIAK. So most of our funding has come from state 
resources, through the Machine Economic Development Corporation 
and foundations. I have also brought whatever personal wealth I 
could bring into the equation. We just got approved, or the 
U.S. Deparmtent of Agriculture for close to $7 million in 
funding. We are having a struggle with the SBA because of my 
felony background, even though 30 years of being out of prison, 
they are having some issues with wanting to fund us. So I mean, 
but that is where we are getting our money from.
    Mr. HERN. Mr. Hopwood?
    Mr. HOPWOOD. the program starts oftentimes in prison. A lot 
of the men I served time with have never balanced a bank book, 
a checkbook. And so just the knowledge of how to run a 
business. In order to reduce recidivism, the process needs to 
start in prison, not just when they get out.
    Mr. HERN. Madam Chairwoman, if I may. Secretary DeVos 
recognized a prison in Oklahoma 2 months ago for a community 
college's involvement in doing the soft skills like you are 
talking about, and some will not be out for 2 or 3 years, but 
they have 40 or 50 folks who showed up for that. So it was 
really great.
    Thank you so much for your time, and I yield back.
    Chairwoman VELAZQUEZ. The time has expired.
    Now we recognize the gentleman from Maine, Mr. Golden, 
Chairman of the Subcommittee on Contracting and Infrastructure, 
for 5 minutes.
    Mr. GOLDEN. Thank you, Madam Chair.
    I just wanted to say real quickly, Mr. Hopwood, when you 
were talking about the issues of stigma surrounding this and 
how it can really, well, all of you spoke about it I think 
really eloquently about some of the issues and focused in on 
employment and housing.
    Just maybe 2 weeks ago I was visiting a transitional 
housing facility for veterans and, you know, Mr. Hopwood, you 
talked about how people change. I was talking to an individual 
who got out of the military, was struggling with post-traumatic 
stress. Got into a fight and hurt some people. And look, I was 
in the Marines. I served. We were taught to accept 
responsibility for our actions. And then move on. And you know, 
become better people for it. But decades later this guy still 
has this charge following him and he cannot get housing. Right? 
And he clearly, he managed to stay out of prison for a long 
time and is clearly working really hard to be successful but 
this housing issue will not, he cannot overcome it. So I 
appreciate you sharing that. And I agree with you that we have 
to find some way to address this.
    I was curious, you did not really talk much about how you 
got the educational opportunity when you were in prison, and 
Mr. Blassingame did mention that he had trouble with a Pell 
grants when he wanted to go and get his education, so I wanted 
to know what you did. Because at the University of Maine, in 
Augusta, there is a partnership with the Maine State Prison and 
the Maine Correction Center, Women's Reentry Center where they 
work with the Deparmtent of Education on what they call Second 
Chance Pell Initiative so that people can get benefits or, you 
know, fund their education costs so they can get that 
education. You said it is important that we start in prison. So 
I was curious how you were able to do it.
    Mr. HOPWOOD. Well, it was not due to the Federal Bureau of 
Prisons, I can tell you that. There were very few educational 
or rehabilitation programs when I was in prison. I served in 
the military, in the U.S. Navy and had a Montgomery GI bill 
that I used to take college courses all across the country, and 
then when I got out I pooled those courses together and 
finished a bachelor's degree and was very fortunate after that 
to get into law school. But most people do not have that 
ability. And the veterans particularly really struggle with 
trauma. And many of them will tell you that the trauma of war 
is not that much different from the trauma of serving a long 
time in the Federal prison system. And so, you know, we really 
have to start, if we want to reduce recidivism, obviously, we 
need things, resources for people when they get out of prison. 
But I say that recidivism reduction and rehabilitation starts 
the day someone enters the prison system. And all too often 
people waste years or decades just in prison, and we do not 
give them any programs, and then we kick them out with no job 
skills and we expect a miracle to happen. And when it does not 
we tend to say, oh, see, you were evil always to begin with 
when really they just needed some chances. Second chances.
    Mr. GOLDEN. Well, I do want to point out it sounds as 
though your GI Bill stuck with you despite the fact that you 
had committed a crime.
    Mr. HOPWOOD. Yes.
    Mr. GOLDEN. So there is a policy different right there 
between the GI bill and how we treat veterans who do find 
themselves in trouble with the law and other people and when it 
comes to other Federal education programs. So it is just 
something for us to think about.
    But I wanted to ask any of you if you wanted to talk about 
it, do you see any opportunity for any of the SBA 
entrepreneurial development programs, like SBDCs or others, to 
work within the prison system to build on educational 
opportunities like second chance Pell? I mean, would your 
programs be potentially more successful? Ms. Hodges, I am kind 
of thinking of yours, if it were tied in hand-in-hand with 
educational opportunities.
    Ms. HODGES. I certainly think that is an interesting idea. 
The more partnerships that we forge throughout all of our 
services, whether it is in a facility or out, we know that that 
makes the results and the outcomes more successful. So I 
welcome the opportunity to really begin to research that more 
formally and to engage with the Office of Entrepreneurial 
Development on that topic. Certainly, there are already some 
examples of those partnerships in place, and I know with the 
small business development centers, and my partner over here, 
Tee Rowe, his offices are already on campuses. And in some 
cases, our women's business centers are as well. And so forging 
those partnerships would be natural. It would be easy. But 
working more formally with the Office of Entrepreneurial 
Development I think could really put some wind in our sails.
    Mr. GOLDEN. Thank you.
    Madam Chair, I yield back.
    Chairwoman VELAZQUEZ. The gentleman yields back.
    The gentleman from Tennessee, Mr. Burchett, is recognized 
for 5 minutes.
    Mr. BURCHETT. Thank you, Chairlady. It is Burchett, birch 
like the tree, and it, like I just ate breakfast. So I just 
remind you of that.
    And I want to commend our Chairlady. The first week we were 
here I was reading, saw on the Internet where there was a jail 
in her district where they, unbelievably it was cold up there. 
I live in Tennessee and it gets down to 32 degrees and we get a 
quarter inch of snow and we close the schools. But it was 
really cold where she is, and there was a jail and the power 
was off. And I felt compelled to bring that to the Committee's 
attention then and I feel compelled now because I think it is, 
you know, it is easy and it is cool to beat up on people that 
are in jail, but eventually, I believe 95 percent of them are 
going to get out and we have got to do something about it. And 
my background is technical and adult education. And we have got 
to do something. The trades are where it is at it seems to me 
and that is a perfect thing. And of course, I have skipped all 
over. I did not read what my staff prepared for me. I do not 
know what I pay them for, Chairlady. I do not ever follow what 
they have got. Maybe that is where we need to start. No, I am 
just kidding. Do not get nervous.
    But anyway, I will just go through my thing there, and I 
apologize. It is the Southern Baptist in me. I got to 
preaching. Just do not let us be your offering plate. That is 
all I got to say.
    Thank you all, Madam Chair. Again, I appreciate you for 
holding this important hearing. And thank you all for being 
here. It is an incredibly important issue, and I believe we 
need to work on it more.
    Earlier this month I wrote a letter in support of a prison 
workforce program in Claiborne County. It is a small area. 
Rural folks, just hardworking country people. They are 
unbelievably cool people. And it works out to about 3 percent 
of the district I represent, but I try to spend as much time up 
there as I can.
    And ultimately, I wanted to make sure that individuals who 
are incarcerated, are ready for a fresh start, they get a new 
beginning, they have all the opportunity to do so.
    My question, Mr. Blassingame--I believe I said that right. 
If not, I apologize--you make a point in your testimony about 
government grants being hard to manage, and the people who need 
them never seem to receive them. Could you elaborate a little 
bit on that and how we can make sure this is not the case 
anymore?
    Mr. BLASSINGAME. Sure. So there is a lot of reporting and a 
lot of staffing that is needed when it comes to managing 
government grants. A lot of small, grassroots organizations do 
not have the capacity to manage. And then when the money comes 
down, we have to hire consultants to manage the grants for us, 
and the money that needs to go to programming goes to people, 
you know, to pay them. So it is just a catch-22. So I would 
like to see more of us getting training on the ground, the 
self-taught person. I love to read, and so I taught myself to 
write grants. I taught myself business. And so I am an anomaly. 
I was one of those. But everybody is not a Jerry Blassingame. 
So I would love to see more people get training, even training 
while they are incarcerated on how to manage grants and how to 
do business.
    Mr. BURCHETT. Yeah. A simple bookkeeping class might be in 
order. I suggested that in the past and it fell on deaf ears. 
Maybe something like that, some basic skills that you will need 
to learn in the business community would be good I would think.
    Mr. BLASSINGAME. Yes.
    Mr. BURCHETT. Mr. Wozniak, you mentioned a couple of 
educational opportunities with SCORE mentorship programs. Would 
specifically teaching individuals how to start a business work?
    Mr. WOZNIAK. It did me. So unlike Mr. Hopwood, we did not 
have any opportunities for education when I was in Federal 
prison. I could barely get newspapers in to read them to stay 
current. Had I had the opportunity to take Business 101 while I 
was in prison, you know, how to read a balance sheet, how to do 
a P&L, how to do cash flow management, and then had access to 
funding and then had access to mentoring through a SCORE 
system, I would not have even bothered to look for a job. I 
would have had a business model already lined up and had some 
seed capital to get into it. So yes, it would make a very big 
difference.
    Mr. BURCHETT. All right. I just want to thank you all for 
being here and to have the courage to be here to talk about 
what is going on. Hopefully, we can rewrite some of this in the 
future.
    And Chairlady, again, I commend you on your noble stand. I 
know it maybe does not help you politically, but I think God 
likes it. He talks about the least amongst us.
    Chairwoman VELAZQUEZ. It is the right thing to do.
    Mr. BURCHETT. It is the right thing to do, Chairlady. Thank 
you so much.
    Chairwoman VELAZQUEZ. The gentleman yields back. Thank you.
    Now we recognize Ms. Chu from California, Chairwoman of the 
Subcommittee on Investigations, Oversight, and Regulations, for 
5 minutes.
    Ms. CHU. Thank you. And Mr. Hopwood, Mr. Wozniak, and Mr. 
Blassingame, your stories are so compelling.
    And Mr. Hopwood, I remember watching you on 60 Minutes 
telling your story and it was just so incredibly important for 
people in America to understand what this process of rebuilding 
your lives is all about.
    And so let me ask you, Mr. Hopwood, my home state of 
California has taken several steps in recent years to extend 
higher education opportunities to incarcerated people. And the 
state now enrolls thousands of students in full credit degree 
building college courses in 34 of its 35 prisons. As you cite 
in your testimony, the RAND Corporation has found that 
correctional education programs are correlated with a 43 
percent reduction in recidivism.
    So how do you think that public colleges and universities 
can promote employment and entrepreneur opportunities for 
incarcerated and returning citizens? How can they make a 
difference?
    Mr. HOPWOOD. Well, so many of the best reentry stories I 
have seen involve community. And one of the communities that is 
very safe for people coming out of prison are colleagues and 
universities where people go and they feel like they are 
getting a fresh chance at life. And I think those programs have 
had success because people coming out of prison get the 
education they maybe never had and the chance that they maybe 
never had while in prison. Those programs you mentioned reduce 
recidivism. And what often you hear is, well, why would we give 
these free programs to people who broke the law? But that is so 
shortsighted when you think about spending a little bit of 
money on education in prison and entrepreneurship in prison, it 
saves a whole lot of money on the back end when that person 
does not commit a new offense, does not re-victimize someone, 
and we do not have to pay for the re-prosecution and re-
incarceration. So spending a little bit of money on the 
frontend to make us safer and save a bunch of money on the 
backend, I call that good government. And we just have to quit 
being so shortsighted when it comes to trying to use 
rehabilitation programs. And between the First Step Act and 
some of the things that this Congress is doing now, I am 
hopeful that people in Federal prison today will have the 
opportunities that Mr. Wozniak did not have.
    Ms. CHU. And then there is the release upon prison, from 
prison. What type of barriers do recently incarcerated people 
face as they leverage their training into full-time training or 
entrepreneurship?
    Mr. HOPWOOD. Well, somebody mentioned how difficult it is 
to get employment with the Google age. And yes, we have these 
policies that say ban the box, but people do not have to do 
deep background checks anymore. Even if the box is banned, 
someone does a Google search and finds out that someone has 
been convicted of a felony, it is really difficult to sway that 
person and convince that person to give them a second chance. 
And so we need more public-private partnerships.
    Just this last weekend, JPMorgan announced that it is going 
to start doing second chance hiring. Koch Industries has done 
that for several years, and I think it is going to require new 
laws from the Congress, but it is also going to require 
businesses to step up and say we are going to affirmatively 
hire people coming out of prison knowing that they have felony 
convictions. And I think it is going to take us kind of 
pressing from all sides in order to get at this recidivism 
problem.
    Ms. CHU. In fact, Mr. Wozniak, you experienced firsthand 
the barriers that formerly incarcerated people face who seek 
employment. You have a breadth of experience as a business 
owner running both traditional businesses and RecoveryPark 
where you offer employment. What would you tell business owners 
in breaking down the stigmas associated with hiring a formerly 
incarcerated, I mean, what would you tell them in terms of 
hiring those who are formerly incarcerated?
    Mr. WOZNIAK. So we are working with a couple of 
manufacturing companies in Detroit right now because 
unemployment is so low. And I mean, people coming out of prison 
are a great resource. I tell them the successes that we are 
having and all the businesses that I have had, how stable the 
employees are, how they follow the rules, how they show up on 
time, how they want to work the extra mile. You know, how they 
do not exhibit any of the tendencies that probably took them to 
prison in the first place. I also talk about the opportunity to 
hire people and provide some support services to stabilize the 
workforce so that they are not hiring and firing and hiring and 
firing people because it is expensive to do that. So if you 
hire somebody, my biggest suggest is a guy who went into prison 
at 14 years old. He came out 33 years later. In 2 years, he is 
on his way to a $60,000 welding job. He is getting married. He 
owns two cars. We helped him clean up his credit. I mean, that 
is a success story. That is what I tell people.
    Ms. CHU. And have you been successful in persuading them?
    Mr. WOZNIAK. Yes. I have got one company now, a steel 
manufacturer, that wants us to come in and manage the returning 
workforce population.
    Ms. CHU. Thank you. I yield back.
    Chairwoman VELAZQUEZ. Time has expired. The gentlelady 
yields back.
    The gentleman from Pennsylvania, Mr. Evans, Vice Chair of 
the committee, is recognized for 5 minutes.
    Mr. EVANS. Thank you, Madam Chair.
    I, too, like others, want to congratulate you and your 
leadership for just giving the opportunity to have this 
platform discussion. So I thank you sincerely for your 
leadership.
    I want to deal with a question I think Mr. Hopwood was 
starting to touch on about what does it take? And the question 
I ask to members of the panel, what other barriers do ex-
offenders face when trying to start new businesses? You started 
down the line of saying a certain type of person. Can you kind 
of recall that conversation, pick up on that? You were saying 
someone who has been involved in drugs who comes out of prison 
is better. Do you want to talk a little bit about that?
    Mr. HOPWOOD. Yeah. From my experience, most of the people I 
served time with were there for drug offenses and those people 
had hustled on the streets. And so I have seen several of them 
get out and hustle on the streets but in a different path. And 
have been wildly successful starting businesses. They have the 
inner motivation. Some of them, you know, are risk-takers. And 
most of what they need is just educational opportunities in 
prison and some support when they get out. And if they had that 
support, I mean, you look at the prison entrepreneurship 
program in Texas. It has reduced recidivism there by a third. 
There is Defy Ventures. There is, in my home state of Nebraska, 
ARISE, which goes in and trains people how to create a business 
plan and then helps them get small loans up to like $5,000 when 
they are released. I know one gentleman took the prison 
entrepreneurship program in prison, got out, got a small grant, 
and started a lawnmower service. He now, you know, has eight 
employees and 10 different riding lawnmowers and is widely 
successful. And so particularly the Federal prison system which 
has fewer people in for violent offenses than the state systems 
and a lot more people in there for drug offenses. And in my 
experience, people who have committed drug offenses are ripe 
for doing entrepreneurship when they are out and have had 
success.
    Mr. EVANS. So in other words, I hear what you are saying. I 
mean, that is why I gave the Chairwoman credit for these 
initiatives. I mean, we can do our part, but there is another 
part you were talking about and I am just trying to understand 
how can that connection be made.
    Mr. HOPWOOD. Well, I think part of it would, if I could 
waive a magic wand, would be not imposing such long sentences 
on people to begin with which I think really hampers the 
rehabilitation effort. You take a 20-year-old and give him a 20 
year mandatory minimum and tell him wake up every day and seize 
the day and improve yourself. Well, that is really hard for 
that person to do so. And the great irony of the American 
criminal justice system is the longer someone tends to spend in 
corrections, the least corrected they are. Not necessarily 
because, well, in part because of the prison system but in part 
because your social skills deteriorate while in prison. And 
unless there are programs and educational opportunities and 
visitors coming in where you can kind of be tethered to the 
outside world, it is hard for people to take advantage of the 
programs that are in prison. And so I would tell you, as a 
first step, reduce the prison sentences and put in more 
programs and you would see a lot more people come out and have 
success.
    Mr. EVANS. Can I come down the line real quick? So 
anything?
    Mr. WOZNIAK. Thank you. In Michigan, we have innovation 
villages or vocational villages where people can actually go 
and they leave the prison for 9 hours a day and they are in an 
actual work environment and they are learning the skillsets 
that they need and they are coupled with an employer. For the 
last 5 years, me and my team have been going into the prisons 
and we have been actually teaching entrepreneurship classes in 
about five state prisons in the state of Michigan. And they are 
probably the most well attended classes out of all the classes 
that they offer in the state. People are like sponges. They 
want to learn but they need the basic skillsets as well. So 
like how to put a business plan together. How to put the 
narrative together. How to put the financial spreadsheet 
together. And that needs to happen in prison. It needs to 
happen quickly because you need to capture people and keep them 
motivated to do good things when they get out.
    Mr. BLASSINGAME. I went to prison for selling drugs while I 
was in college, and so I had about eight people in my community 
working for me. So when I got out I took $100,000 and leveraged 
the $700,000 to build an affordable housing project. And so you 
are exactly right that those of us who have been in the drug 
dealing business, we have a business acumen. We just need to 
clean it up.
    And I also became a Christian while I was in prison, and so 
that helped me, too. My faith has also been a great indicator 
to help me to do the right thing. I love getting guys who have 
been in prison for dealing drugs and putting them in our 
business. I have a guy right now who just got out from a 
Federal prison and he came right out and he became part of my 
leadership team because of his leadership ability that he had 
while a gang member on the street.
    Mr. EVANS. Thank you.
    I yield back. Thank you, Madam Chair.
    Chairwoman VELAZQUEZ. The gentleman yields back.
    Now we recognize the gentleman from Texas, Mr. Veasey.
    Mr. VEASEY. Madam Chair, thank you very much.
    This is really great. I wish that more people could be able 
to just hear these stories because they really are wonderful 
and just talks about a situation that we really do need to 
figure out a way how to address head on because, like you say, 
most people, 95 percent of the prison population will be coming 
back into society. And so how they fit back into society, be 
able to earn a living, and some of those I think factors are 
very complicated, too. Like how you are able to actually earn a 
good living and be able to pay a car note, any sort of back 
child support that you may have. I mean, there are lots of 
different issues that go out there. It is not as easy as just 
being able to go and work at a minimum wage job at a fast-food 
restaurant and think that that is going to supply like all of 
your needs to be able to function back in society. So I just 
wanted to thank all of you.
    Mr. Wozniak, one of the things that I missed in your 
testimony, and you may have talked about it but I did not catch 
it, when you started the pizza franchises, how did you get the 
capital or the money to start? Because I know most franchises 
cost, you know, at least, what, $10,000 to $20,000. A more 
well-known franchise could cost well into the hundreds of 
thousands of dollars.
    Mr. WOZNIAK. So I needed to raise a couple hundred thousand 
dollars to get into the franchise because I had a multi-store 
contract. I actually do not have a problem asking people for 
money because if I do not ask they cannot tell me now. And I 
went to some of the people that I actually stole money from to 
support my drug addiction. So some of my former clients and my 
relatives. And a number of them told me no but some of them 
said yes. And they got paid back. So, you know, that is how it 
started.
    Mr. VEASEY. What sort of advice would you give to people 
that are coming out of prison, people that may be from more, 
what is the correct word, marginalized communities, for 
instance, that may not have access to those types of friends 
that you had, if they wanted to come out of prison and start 
their own business? Because that is, I mean, I am talking to a 
lot of people that do not have, and people who live in my 
district that do not have a criminal background record, that 
would like capital to start up a business, would like to be 
able to have the relationships needed to go into a bank and get 
money and what have you but they cannot do it. And it is a huge 
source of frustration. And so I was just wondering what sort of 
advice would you have for people that are coming out that need 
access to this type of capital?
    Mr. WOZNIAK. So my advice would be, you know, if the access 
to capital that you need is too great, you know, maybe you need 
to just downsize your initial business and figure out how to 
leverage the resources that you do have. All of my businesses 
have been in the city of Detroit. It is a really challenged 
city. A lot of the people that I deal with and a lot of the 
businesses that I have helped launch for other people have had 
the barriers that you are talking about. So, 
undercapitalization. You just have to beat the bushes harder. 
You have just got to look for programs that are available and 
figure out how to take $5,000 here and $6,000 there and $10,000 
from somewhere else and piece it together and then leverage it 
like Mr. Blassingame did with his CDC.
    Mr. VEASEY. Right. Exactly.
    Mr. WOZNIAK. And also, just do not give up. I mean, the 
biggest reason that most people fail at getting into business 
is they give up. They start listening to the noise around them, 
the 85 percent of the people that tell them do not take the 
risk. You are going to fall flat on your face. You are going to 
make mistakes. Oh, you were a prisoner. Nobody is going to want 
you in your community. I do not listen to any of that noise. 
And any successful entrepreneur cannot.
    Mr. VEASEY. Mr. Hopwood, I think it was you, or it may have 
been Mr. Wozniak, that said something that was interesting 
about socialization. You know, because your socialization in 
prison is completely different than socialization on the 
outside. And I know a successful business owner in Dallas that 
told me that they have hired a lot of people that have been 
formerly incarcerated, and coming to work on time, honesty, 
those sorts of things really were not a problem but it really 
was the soft skills that was a huge issues because you do not 
necessarily resolve problems in prison the same way that you 
would in the outside world.
    Do you just want to touch on that? And do you think that 
there are enough efforts in that area to help people? Do you 
think that that is the biggest problem or----
    Mr. HOPWOOD. I think that is one of the biggest. There are 
not enough programs in the Federal prison system. I am hopeful 
First Step will change that. But you know, when you have 
conflict in the prison system there is no de-escalation.
    And I often tell the story of my poor wife back here who, 
we got married shortly after I got out and I had been in prison 
for 11 years. And when we had arguments, I tended to revert 
back to who I was in prison and that did not make for a very 
good husband. And it does not make for, you know, good 
coworkers when people get out. And so we do have to do a better 
job of helping people with social skills on the inside. And we 
have got to get more Americans to go in and teach classes in 
prison. And offer, you know, their wisdom and guidance to the 
people inside.
    Mr. VEASEY. Thank you very much. God bless all of you.
    Madam Chair, thank you very much.
    Chairwoman VELAZQUEZ. The gentleman yields back.
    We recognize the gentleman from Illinois, Mr. Schneider.
    Mr. SCHNEIDER. Thank you, Madam Chairman. And thank you for 
having this hearing. And I want to thank the witnesses for 
courageously sharing your stories and for doing what you do, 
for being out there.
    A lot of good points made. I am thinking of some of my 
experiences in my community. I am from the northern suburbs of 
Chicago, and in one of my communities, Waukegan, there is a 
disproportionate number of oftentimes young people who were in 
the prison system but there has been a compelling and 
compassionate effort to address that in an organization called 
the Coalition to Reduce Recidivism. And they have been at the 
forefront. And I have had the chance to attend many of their 
meetings. I have been a long-time supporter of the 
organization. And in those meetings I have had the chance to 
meet some of the people who are returning citizens and hearing 
their stories. And I bring that up because it is hearing those 
stories that is so important to understanding not just the 
challenges our returning citizens face but the part of the 
justice system we need to provide to make sure that these 
people have the chance to succeed and be a part of our 
communities.
    I think it was Mr. Hopwood, you said reentry requires a 
community, and it really is true. And that is one of the things 
that I hope through these conversations and hearings we can 
work to further that along. But also one of my takeaways, 
again, Mr. Hopwood, you said it is we need to start the process 
when people enter the prison system. It is important for us to 
see these young men and women of all ages as part of our 
community and it is our responsibility to help them make that 
transition.
    Is it Mr. Blassingame? Did I get that right? Your story and 
your experience, you talked about being an entrepreneur by 
being able to channel in the right direction. One of the things 
that my colleague, Mr. Veasey touched on is it is hard to be 
something or aspire to be something when you do not have a 
chance to see that something, whether it is in a role model or 
whatever. And so the need for mentoring, whether it is through 
SCORE programs or the other programs in prisons is a piece of 
the things that we have to do.
    But it is incumbent upon us as members of Congress to open 
our eyes and be willing to get out of our comfort zones. For 
me, it was the first time I had someone talk to me about ban 
the box, and coming from the financial services industry I was 
like, whoa, I need that box to know. They were, no, you can ask 
it later at least give the chance to have the interview. Give 
us a chance to tell the story.
    And having been an entrepreneur and understanding the 
importance of that, I appreciate being your own boss, making 
your own destiny, but again, Mr. Hopwood, you talked about 
scrappiness. And I think that is a piece of being an 
entrepreneur.
    In my district in the Chicago area, I had the chance to 
meet with a guy named Tom Decker. He is got a company called 
Chicago Green Insulation. And what they are doing is installing 
insulation mostly in basements, but that is part of the move 
towards green technology, green energy. But what he has found 
is that it is a skillset that he can teach pretty quickly to 
people coming out of prison and they can learn the skill. And 
he has hired a number of formerly incarcerated individuals, and 
what he has also found is that these people, as you mentioned 
Mr. Wozniak, these people show up on time. They do their work. 
But the soft skills, he is working on that.
    I guess my broad question for the whole panel, anyone can 
jump in, is you know, not just the entrepreneurs, the returning 
citizens who are becoming entrepreneurs, but the small 
businesses who want to reach out and hire returning citizens, 
what more can we do to help them? Are there programs we can put 
in place to help those companies that say, hey, give these 
people a chance. Let them learn the skills. Give them the space 
to make their mistakes and grow and maybe grow some 
entrepreneurs along the way?
    Mr. BLASSINGAME. I do not think it is about programs. I 
believe from our experience it is the relationships. You know, 
small businesses come to us to hire guys from our organization 
because we work on the hard skills and soft skills. The 
relationships, conflict resolution, you know, that is something 
that somebody mentioned about being in prison, a lot of 
conflict. That is the thing that I have had most problems with 
with the guys in our transitional houses, how to resolve 
conflict. Because if you cannot resolve conflict, you cannot 
keep a job. So that is one of the things that we work on on a 
daily basis in our program, in our 1-year program is resolving 
conflict. And when we talk to small businesses about that, they 
want to be able to hire people who can resolve conflict because 
they will stay on the job longer.
    Mr. SCHNEIDER. Absolutely.
    Mr. Wozniak?
    Mr. WOZNIAK. I think the biggest thing the Federal 
Government can do is actually start issuing contracts to 
companies that hire returning citizens and start talking about 
the success that they are having. The Federal Government tends 
not to do that. I know we are doing it in the state of 
Michigan. They banned the box and they actually hire people 
coming directly out of prison.
    Mr. SCHNEIDER. And as you said, not just do it and support 
the companies that do it, but celebrate.
    Mr. WOZNIAK. Absolutely.
    Mr. SCHNEIDER. We have communication tools at our disposal. 
We can work to get the message out.
    My time is up but again, I want to thank all the panelists 
for being here. And in particular, the Chairwoman, thank you 
for having this hearing.
    Chairwoman VELAZQUEZ. Thank you.
    Mr. SCHNEIDER. I yield back.
    Chairwoman VELAZQUEZ. Thank you. The gentleman yields back.
    Let me take this opportunity to thank all of the witnesses 
for taking time out of their schedule to be here with us today. 
Your testimonies were compelling. Your stories are truly 
inspirational. I cannot recall a more moving hearing that we 
have conducted throughout my 27 years serving on this 
committee. Thank you so much. I really appreciate it.
    Through hard work and perseverance, you were able to 
overcome the barriers to reentry and lead successful lives. I 
commend each and every one of you for your commitment to 
criminal justice reform, and I would also like to thank Ms. 
Hodges for her willingness to testify today and to share her 
expertise. And of course, we recognize the presence of Tee 
Rowe, the director of the Small Business Development Centers 
Network.
    In closing, we had a chance to learn more about the 
challenges facing formerly incarcerated individuals and how 
entrepreneurship can give them a second chance upon reentering 
society. I look forward to working with you as well as my 
colleagues on the committee to advance legislation that will 
provide the incarcerated and formerly incarcerated with 
entrepreneurship training services needed to launch and grow a 
small business.
    Before we close, I ask unanimous consent to enter into the 
record testimony submitted by Representative Hakeem Jeffries 
from New York.
    Without objection, so ordered.
    I ask unanimous consent that members have 5 legislative 
days to submit statements and supporting materials for the 
record.
    Without objection, so ordered.
    If there is no further business to come before the 
committee, we are adjourned. Thank you.
    [Whereupon, at 12:54 p.m., the Committee was adjourned.]
                            
                            A P P E N D I X

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 

                                 [all]