Prison Entrepreneurship Program changes lives of felons — and executive volunteers

by Mike Orren

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While judging a business plan competition for cons, I discovered a program that could curb recidivism worldwide.

CLEVELAND — Most prisoners entering the Cleveland Correctional Center are happy to arrive there. To get into the state-owned, privately operated facility, you have to be within three years of parole. Most of the 520 men housed there have been moved from higher-security facilities where they did their “hard time,” and Cleveland, about 50 miles Northeast of Houston, is where they begin their transition to freedom.

Still, for most prisoners, Cleveland used to be just another waystation in the vicious cycle of crime and incarceration. A third of Texas prisoners find themselves back inside within three years.

But now Cleveland is home to the Prison Entrepreneurship Program (PEP), a privately-funded nonprofit that provides business, life skills and character development education to an elite group of the smartest, best-behaved, most-changed prisoners in the Texas system.

A third of the prison’s beds are now allocated to PEP. Roughly twice a year, at a cost of around $1.5 million per annum, PEP graduates a class of about fifty student-prisoners. In its sixth year it boasts 650 graduates with remarkable statistics:

• Only ten percent have been sent back to prison.
• 90 98 percent have jobs within ninety days of graduation.
• Collectively, they pay an estimated $4 million in taxes annually.
• They make up 13% of PEP's donor list, giving back to the organization that gave them a “hand up.”

Each five-month PEP class culminates with a two-day business plan competition and graduation ceremony. About fifty executive volunteers from around Texas (plus a few from out of state) converge on Cleveland, where they judge pitches from the students.

When I got an invitation to judge, I contacted PEP and asked if they would mind me doing a story on the experience. With some minimal haggling over getting note-taking materials inside, they agreed.

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I arrive at the Cleveland Correctional Center a little before 9 a.m. on Thursday, December 2 and join a queue of executives in the reception area. I’m standing behind Paul, a lanky, bespectacled fellow in a sharp black suit talking to Jeff, a younger guy who is bit more casual. They clearly know each other well. Paul is from Sacramento, California and has been coming to PEP events as a judge and advisor for several years. Jeff is a graduate who has a printing business in Houston and has become one of Paul’s suppliers.

We go to a window and trade our IDs for pre-printed name-tags. We’re buzzed into a corridor where we walk through a metal detector and receive a pat down from a guard. It is far less invasive than even pre-body-scan TSA procedures. We’ve been instructed to bring only our drivers license and keys, but one man with a special diet manages to bring his lunch in a clear plastic container.

In waves, we’re ushered into a dining hall where we’re greeted by a phalanx of prisoners in blue jumpsuits. They have name-tags with a logo indicating their membership in PEP’s fourteenth graduating class. One checks us off on a list of guests, while the others stop us for a handshake and a hello. Once inside, prisoners (who I later learn are graduates from a prior class) are dishing out bagels, cream cheese and fruit. I opt for coffee from a titanic dispenser and survey the room. About thirty prisoners are mingling with a similar number of outsiders dressed in suits or sportcoats. There are a half-dozen students in street clothes -- they were released before graduation, and in a relaxation of standard prison rules have been allowed to return to compete and graduate.

A couple prisoners see me standing alone and strike up a conversation. Edward and Aundra are friendly and funny, alternately teasing each other and quizzing me about my business, putting me instantly at ease. They are clearly close friends: Aundra starts rubbing Edward’s ample belly and demands that I guess what his business plan might involve, issuing a high-five and a cackle when I take the bait and guess catering.

I’m pulled away to join a group photo with ten prisoners. Tomorrow I’ll get a framed print as a thank-you gift. I awkwardly accept back-pats from these prisoners whom I haven’t yet met, but relax as they jokingly compliment me on my “executive posture” and promise to take note of it for their future use on the outside.

I chat with a fellow executive who owns a business specializing in interior construction of stadiums. Cowboys Stadium is among his recent projects. He is also new to the program, making the trip at the behest of a friend. We’re interrupted by PEP Executive Relations Director David Joekel, who takes the mic from the prisoner running the DJ station and asks for all first-time judges to join him across the hall.

As we move into the room known as “Club PEP,” I note that the prison looks and feels more like a really restrictive high school than a detention facility. Prisoners are moving about without overly-direct supervision. Various motivational and educational posters are on interior walls.

Club PEP reminds me of the fellowship area at a sizable church. There’s a stage with a screen and podium and some disco lights. A small library has shelves packed with an assortment of business books from arcane tax texts to Trump’s Art of the Deal; Friedman’s The World is Flat; lots of Dave Ramsey finance guides; and one of my favorites, Allen’s Getting Things Done.

I’m most struck by the wall art -- neatly arranged collages featuring photos of the heads of the members of Class Fourteen, informally dubbed “The Fantastic 14,” superimposed on superhero bodies. Each has a series of descriptors like honest, caring, loving, righteous.

We settle onto some comfy couches while Joekel and PEP CEO Bert Smith provide a rundown on the program and the logistics of the day. At one point, they indicate a single-head bathroom in the back corner of Club PEP and tell us that men can use it, but that women will have to get a guard to take them back into the outer office area.

“Is there any reason we can’t use the bathroom in here?,” one of the female executives asks, with a hint of feminist indignation.

“Yes,” Smith deadpans. “This is a prison.”

He introduces a couple of graduates of the program to tell us their stories. This is the first in a series of testimonials we’ll hear over the next two days.

Adam tells us he is from Denton and grew up in a close-knit family with good values. He did well in high school but got into drugs in college and things spiraled out of control, landing him in prison. He is articulate and comes across as very smart. As someone who is pretty libertarian on drug policy, I find myself a smidge uncomfortable with the abject analysis of his wrongs, noting that 80 percent of these men are here for drug-related offenses. But I brighten as he describes the things he’s learned while in PEP, how he is both better educated and a better person.

Next, Michael’s story begins what I find to be a recurrent and disturbing story arc among the men I will meet: troubled youth with dabblings in substance abuse and petty crimes; a stint in the military to “straighten out,” generally facing active duty and combat; a return shortly followed by fathering a child and then by a return to crime to fund either substance abuse or family care or both. Since the last published study, five years ago, claims that only 10 percent of state prisoners are veterans, I hypothesize that they may be more attuned to the rigors of a program like PEP.

At this point, PEP Development Director Andrew Kramer finds me a pad and paper. I’m outed as a reporter, becoming a minor object of fascination among the PEP student-prisoners. They’re even more eager to talk to me than before. By the end of Friday, my pen will be dry.

Soon, we move back to the dining area and the students move to the PEP room. After a few minutes, we are told to join them.

I quickly realize that this isn’t going to be a casual stroll to file into a seat. The main lights are off and the disco lights are pulsing to Katy Perry’s “Firework.” The students are in two lines forming a tunnel with their outstretched arms, as though we are entering a football stadium from a locker room tunnel, taking the field for the big game. They are yelling and cheering. Somewhere over the din, I can hear Jamil, one of the students, on a mic playing hypeman. I would describe the cacophony as deafening, were it not just a whisper of what was to come Friday.

The proceedings continue with a “Pray-in,” which kicks off every PEP gathering. One student volunteers to lead a prayer while everyone in the room puts their arms around the shoulders of the people to either side.

PEP is not a faith-based organization, but Christian principles are at the fore and are a big part of the rhetoric you hear from the students and volunteers. One PEP supporter confides a concern that the religious overtones might sometimes handicap the organization’s acceptance in secular environments like government and non-denominational foundation pitches.

Smith takes the stage and introduces himself as “Chocolate Truffle,” to uproarious laughter from the students. This is his “sweet name,” an inside joke among PEP folk, and a hint of what the softer side of the program is about.

Every PEP student (and most of the staff and regular volunteers) have a “sweet name.” It is a nickname that is as un-masculine, uncool and innocent as possible. It is part of what Smith calls the “de-gangsterization” of the men. “We are washing off the negative street residue,” he says.

Many of the men have had rough n’ tough noms de guerre, bestowed by gang members and accomplices. A major part of PEP is to break down that hardened self-image and replace it with one of kindness, love and responsibility. The sweet name takes that to the extreme.

Any time one of the students introduces themselves on stage, they use both their real name and their sweet name: pseudonyms like Rainbow Delight, Sugar Bun, Ellie May, Marshmellow Bunny, and Banana Montana.

Some announce themselves with gusto and flair, turning it into a bit of performance art. Some names lead to a Rocky Horror-esque crowd participation. Jamye, a tough-looking, head-tattooed student from Fort Worth, is known as “Smurfette,” and his introduction incites a singalong of the Smurfs "la, la, la, lalala" theme song.

Even at the end of the five-month program, the men have varying levels of comfort with their sweet names. But, in another illustration of PEP values, when one mumbles or stumbles on it, they are chided by their classmates. “Own it!!!” comes the shout from the crowd in a blend of support and reprimand.

At the other end of the spectrum is the networking environment introduction. Without variation, every man introduces himself in the same way:

“Hi. I’m [Name], proud owner and founder of [Business Name]”

For a man who has been in prison upwards of a decade, that’s a profound statement of identity. I’m so struck by it that when I am asked to introduce myself to the group, I involuntarily say, “Hi, I’m Mike Orren, proud founder and former owner of Pegasus News.”

It gets a laugh, but it brings a lump to my throat.

This all feels surreal at first, but Club PEP is a world unto itself, with its own rules. Jamil hypes up the crowd with the rallying cry: “In here, now-- this is not prison! This is Club P-E-P!”

It is surprisingly easy to forget you are in a prison, even if half the people in the room are wearing matching blue jumpsuits. Even when the obvious is acknowledged, it comes with a sense of hope and humor. Repeat volunteers are called “recidivists.” Smith refers to the prison as “our gated community.”

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It’s easy to get caught up in the energy of Club PEP, but I find myself asking why we’re basically having a party for a bunch of felons. Most of these men have been sentenced to at least five years in prison this time around and are at least second-time offenders. Half are guilty of violent crimes. Why are they deserving of special treatment?

The graduates have been through a rigorous process by the time they reach this day. PEP Recruiter Marcus Hill, a PEP graduate, puts the word out to the Texas’ 155,000 prisoners when applications are open, personally visiting 60 of the state’s 112 prisons to ferret out the most promising men. (Women make up such a small percentage of the prison population that there isn't yet a space for a program like PEP.)

Only men with at least a General Equivalency Degree and within three years of fulfilling their sentence are eligible to apply. Sex offenders are not eligible. Nor is anyone who has had a hint of gang affiliation within the past year. There is a multipage written application that is scored by a panel of three administrators and volunteers. After a series of interviews, the top 150 are conditionally accepted and moved to Cleveland.

“The most important thing,” says Smith, “is does it appear that the man has genuinely committed to change? We are not trying to convince anyone. We are looking for men who have already made the decision.”

Once on site, there is additional evaluation and only about a hundred of the 150 begin work with Jose (pronounced “Joe-zay”) Cavaliere. He is a large man, alternately stern and jolly. He’s a businessman originally from Brazil. Like many who work with PEP, he is an graduate of the program.

Cavaliere is a stern taskmaster and renaissance man who puts them men through their paces, both academically and in a constant examination of character. The program starts with reading and discussing Crime and Punishment. Then, supplemented with guest lectures from visiting executives, the students move on to economics, history, personal finance, AP Style (!) and even classical music.

There are sixty-five homework assignments. Thirty-five tests. Students are graded and ranked.

Then, working from a program created by the National Foundation for Teaching Entrepreneurship (NFTE), students start formulating a business plan with research help from MBA student volunteers on the outside. Executives work with the students to brush up their plans and presentations.

By the time they reach graduation, these are the top .06 percent of most promising Texas prisoners; the top .14% of the roughly 70,000 who will be released this year.

That’s why PEP Chairman Mike Humphrey, himself a Harvard grad, says, “It may be harder to get through PEP than it is to get into Harvard.”

Of course, this somewhat belies the notion of comparing PEP’s recidivism rate to the average. PEP officials tell me that at my suggestion they are going to look at a comparative analysis of their graduates versus those who qualify for the program but don’t make it through. Based on what I saw last week, I suspect the numbers will still be remarkable.

But no matter how good they are, they will be but a drop in the ocean, according to Robert Parkinson, author of Texas Tough: The Rise of America's Prison Empire. "The Texas prison system is bloated," he tells me in a phone interview. "It's far too large. People are going to prison too long for too little. It's only matched by California, and the only reason it happens for half the price is that Texas prison officers are egregiously underpaid."

Parkinson isn't necessarily surprised that Texas would nurture a program like PEP. "Texas' system is big and diverse," he says. There are a lot of interesting worthwhile programs. The problem isn't that it doesn't have pockets of innovation."

(That's a charitable outlook from an author whose book TDCJ banned from prisons.)

Instead, he sees the problem as one of resource allocation. "The largest share of that pot just goes to locking them up in cages, which leaves them angry, less employable and overall worse off."

Employability is one of the key problems PEP seeks to address. Richard, a longtime volunteer, brings a friend who works in human resources at a large Houston corporation to the graduation.

"It would be great if PEP could help remove the stigma many have against hiring ex-cons," he tells me. "Like a Good Housekeeping seal... But the first step is for them to come here and see that we aren't so different."

---

Joekel leads the group in an icebreaker game called “Step to the Line,” adapted from a scene in the 2007 Hillary Swank film Freedom Writers. There is a taped line in the center of the room. Executives are sent to one side and PEP-ers to the other. Graduates of the program who have been released and are back as visitors are given the option of which side to choose. All go to the PEP side.

Joekel makes a series of statements and if they apply to you, you step up to the line, facing those on the other side who are in the same boat. If the next statement applies, you stay. If not, you walk away. “Integrity is one of our core values,” he admonishes.

We start with easy stuff: If you’re from Dallas. If you’re from Houston, etc.

If this is your first time at PEP. I and the other newbies step to the line to the most uproarious ovation we’ve ever received.

Then we go deeper.

If you’ve been in prison once. Twice. Three times.

Nearly half the prisoners are still at the line for three. A few make it to five.

If you were only raised by one parent. If you weren’t raised by either of your parents. If you came from an abusive home. If you saw your parent abuse drugs. If you had family in prison.

Most of those at the line are prisoners, but on every point a smattering of business suits move forward and back.

If you have ever used an illegal substance.

Almost every one from both sides crowds at the line, eye to eye.

If you’ve ever been intoxicated.

Every single person in the room is at the line.

If you have ever operated a vehicle in a state of intoxication.

Not one person in the entire room steps away from the line. Not one of fifty felons. Not one of fifty-some business people, brought in as role models and judges. Not one.

Joekel only has to raise an eyebrow to get the message across.

Later in the day, Smith underlines the point: “When I came to this organization as a volunteer, I realized that I had committed crimes for which I’d never been captured, much less convicted,” he says. “That line in the middle of the floor is blurry.”

Earlier, in the cafeteria, I had noticed that there didn’t seem to be much separation or social hierarchy between the prisoners and the executives. From this point forward, there would be none.

Next comes the “Dance-in.” In groups of five or so, the students dance from the back of the room to the stage, with some of the bolder ones soloing with a freestyle. The Black-Eyed Peas’ “I Gotta Feeling” provides the soundtrack. Each student introduces themselves, including sweet name, company and a jingle.

Then it’s our turn. Each of the first-time executive visitors is called to the back of the room to do the same. Most of us are businesspeople recruited as judges. A few are social workers focused on prison initiatives elsewhere. One is a representative of one of PEP’s largest foundation funders. We all dance awkwardly to the stage. From the tenor of the introductions, it’s clear that everyone’s already been touched. The students hang on every word and erupt from their seats for each of us as though we’d just announced an early release.

Jamil, who was born in Malaysia, is now running the proceedings and is a skilled emcee. He’s also riotously funny. He tells us he had to change the slogan for his gardening business plan to “Plant the seed today for the food of tomorrow” after the original, “We work like immigrants because we are immigrants” was deemed "too real." He sets up and rolls a mock trailer video that he and another student made, portraying Class 14 as an Oscar-worthy movie.

---

It is time for the Business Plan Competition. We are to be split into seven rooms with 4-5 judges in each. We’ll each hear around a half-dozen pitches and vote two through to the semi-finals (for a total of fourteen). Voting is done via “investor bucks.” We are given an account of $10,000 to distribute among the contenders as we see fit. We also score on a 10-point scale on a wide variety of factors, but those are more for feedback and for tie-breaking. We are told that our detailed comments are critical because the students aren’t allowed internet access and their only market research has come from MBA student volunteers. We are their last, best reality check.

The first round is split into two sessions, divided by lunch. For clarity, I’ll address them together, after the lunch -- where PEP became a transformational experience for me.

---

I sit down to a meal of cheeseburger, fries and two cookies with three of the students. I intentionally join a table where I am the only executive.

Reness, a student from Houston, is the first to engage me. I press him on why he would join the program.

“It’s an opportunity you gotta take,” he says. “How are you gonna waste this time? I mean, what else do you have to do in here that’s more important?”

We’re joined by Chad, a former bartender from Dallas. We have a lot in common and used to frequent a lot of the same Uptown spots. I’m fairly certain he has served me a drink at Obar.

Chad’s family is opening a new restaurant in Tarrant County and he grills me on how to get exposure for the enterprise on Pegasus News. All the students are really interested in our model and ask the sort of questions that people who have been studying business plans might ask: Where does our revenue come from; how do we attract audience; what are our challenges?

Scott, a student from Plano, seeks my advice on a career in journalism. He wants to know how to get experience when newspapers aren’t hiring and I turn him on to freelance services like our Assignment Desk, Associated Content and Seed.

Chad has an idea for a web business but says it’s too good to share, which drives Reness crazy. I jokingly offer to write up an NDA.

Feeling like I’ve built up some trust, I broach the question I’ve been setting them up for from the moment I sat at the table:

“So, you guys all say the same stuff about honor and responsibility and change. You all share the same religious rhetoric. You have the script down perfectly. It sounds beautiful. I have to know: How many of you are faking it?”

I halfway expect them to clam up. I at least expect some equivocation. But Chad answers without missing a beat:

“Some guys do, but they don’t make it. Guys quit. Something like 25 percent of our class just plain quit, and it is generally more like 35 percent. It is really hard to fake it. We do this all day every day. Sooner or later, you’re going to stumble if it isn’t real.”

Twice during the five-month program, the students go through a rigorous Character Assessment. They are not only subjected to their own analysis and that of their instructors, but to that of their peers. With about a hundred guys in the class, if you’ve faltered, chances are someone will have seen it. If the difficulty of the class material doesn’t weed you out, the assessment will. After each assessment, those who don’t measure up are removed from the program by administrators.

The assessment isn’t just a weapon -- it’s also a safety net. I talk to one student who earlier this year was told he was being released, but was instead brought to Cleveland as one of the 150 PEP contenders. He didn’t make the cut and was shipped off to another facility. But his classmates lobbied for him, and based on the Character Assessment data, he was brought back. Now, he is about to graduate.

---

Our conversation is interrupted by the announcement of more testimonies. First comes Corey, a Dallas man who grew up the youngest of three children, all with different fathers. He doesn’t know exactly who is father is. His mother was murdered in his presence when he was 10 months old. Psychologists have suggested he has memories of this that have affected him, but he doesn’t buy it. He was adopted by his aunt and uncle, a teacher and a cop, who raised him as their own. He only learned they weren’t his real parents at age ten, when his adopted sister lashed out in a sibling spat and spilled the story.

“I felt like I didn’t know who I was anymore,” he says, with his voice only slightly aquiver.

The aunt and uncle divorced because of the uncle’s affair. He vocally claimed he succumbed to looking for acceptance because the children, especially Corey, didn’t respect him.

“I don’t blame my environment for anything I’ve done wrong,” Corey insists, only a little unconvincingly.

The aunt moved the family and encouraged Corey in his friendship with some seemingly polite, respectful, educated classmates who were apparently operating from the dark side of the Eddie Haskell playbook. He started getting in trouble with them and was in state jail by his senior year.

“The only thing I thought I did wrong,” he says, “was getting caught.”

He was released, but was back in jail by 2009, now with two kids and a wife on the outside.

Change is hard he says, partially because until he made it into PEP, it was hard to catch a break.

“It is a cliche in jail,” he says. “People will criticize positive things you do in prison because you didn’t do that in The World. So what’s the motivation to do those things?”

Next comes My, the youngest PEP student, a first-generation son of immigrants who grew up in California. He is tall and has an ever-present enormous smile. It is obvious that he is a favorite of his classmates.

My had a hard time fitting in at school and got involved in a street gang. In order to get him out of that environment, his parents, whom he only faults for being too easy on him, moved the family to Texas.

Here, he spotted a market for drugs and got his old gang to ship him a supply to sell. But he used more than he sold, and soon found himself $30,000 in debt to his suppliers. To pay that off, he took a wheelman job on a robbery, which landed him in prison.

While here, he has gotten his associates degree, draftsman training and is second in his PEP class.

Finally, Jonathan, a 29 year-old from Mansfield, steps forward, his eyes already welling with tears.

He explains that his father-in-law, who also was his last employer, is in the room for the first time since the incarceration. Jonathan did not know that he was going to attend until he saw him just moments ago.

Jonathan has a wife and three children. He had an unstable upbringing, with his father in prison and his mother taking him to seven states and seventeen schools by the time he finished junior high. He was abused by an uncle.

When he was fifteen, his mom died in a car wreck. He made his own way and graduated at the top of his high school class while working as a waiter. It was rough going, though, and by the time he engaged in the typical teenage experiment with drinking, the pressures made it an all-too-attractive escape. He was an alcoholic at 18.

By 23, he decided to clean himself up and, perhaps not coincidentally, met the woman who would be his wife. He took a job with her father, a successful businessman, but problems came quickly: “My immaturity, my lack of responsibility, my arrogance caused me to abandon my wife and let down my father-in-law.”

His drinking resumed and culminated with an inebriated crash into a police car, sending the officer to the hospital. (The officer recovered fully.)

Then, PEP found him when he needed help most. His brother, who had been in active combat overseas, committed suicide. Jonathan was not allowed furlough for the funeral and was devastated by the things left unsaid.

“I came to PEP,” he says, choking on his tears. “Hugs were offered. They were so desperately needed.”

“I need to tell you all -- all of you executives who volunteer,” he says, beating his chest, “You believed in me when I didn’t deserve to be believed in.”

During the latter half of Jonathan’s talk, I am transfixed by a suntanned, slickly coiffed man in the front row who is sobbing his eyes out. I assume he is the father-in-law.

So I am gobsmacked when Max, another of the executive judges I met earlier, marches up from the back of the room to embrace the young prisoner. Max, whom I thought was just a volunteer, is the father-in-law. The man in the front row is but a stranger, deeply touched by the story.

All of us are, I believe, irreversibly moved.

The next morning, some of us gather for breakfast at the Cleveland Best Western hotel to find Max there with his wife, his daughter and a granddaughter. We tell Jonathan’s wife how moved we were by his story and she beams with pride. There is a virtual glow about her and she kisses her dad on the cheek but flashes a bit of a “told you so” look. Max shares that they weren’t planning to come, having even gone away on a vacation and returning early “because I couldn’t stand to see the disappointment in my little girl’s eyes.”

Later, at the prison, I ask him why they had changed their minds and what the visit had meant to him. “Look,” he says, “she’s been on the verge in the last couple of years-- and at my urging-- to give up on him. Before, he’s always had so much pride, so much arrogance. But, the fact that he acknowledged he hurt me ... He had refused my mentoring before. I didn’t expect anything of this magnitude. To see the humility of these guys is amazing.”

“You know,” he continues, “I don’t know where to find a better group of guys. If you gave me a choice between these guys and any fifty businessmen, I’ll take them. They have the struggle. They have the humility. They know redemption.”

---

If redemption seems to be a theme for PEP, it is doubly so on the occasion of the fourteenth class, the first to have run entirely during Smith’s tenure as CEO, and one that a year ago was in serious jeopardy.

Aside from a brief interim stint by the organization’s COO, Phi Tran (himself a PEP Class One graduate), PEP has otherwise been led by its founder, Catherine Rohr. Rohr was a Wall Street investment banker who, in 2004, wound up visiting a Texas prison with a friend during a vacation. Struck with the idea that many prisoners, particularly drug sellers, had many of the raw tools of entrepreneurship that could be directed productively, she and her husband moved to Texas to found PEP, cashing out their 401-K and investing more than $50,000 of their own money.

Based on all accounts, and on videos still available online, Rohr must be extremely charismatic. She raised foundation funding and convinced a dedicated and elite group of businesspeople to get behind the organization in a big way. She convinced the Texas Department of Criminal Justice (TDCJ) to embrace an unorthodox, unprecedented experimental program. I spoke to two volunteers from California who were moved to join up and fly to Texas regularly just based on a short talk she gave at their church.

Rohr became something of a celebrity on the national social entrepreneurship scene, and by last year, her star and PEP’s were clearly hitched and rising.

But all was not well. Rohr and her husband divorced, and last October, in a letter to the organization, she resigned, admitting an inappropriate relationship with four different graduates of the program.

TDCJ banned her from re-entering a prison or working with men during parole. PEP faced a nightmare scenario beyond the board’s wildest fears -- not only losing their charismatic leader, but doing so under an air of scandal.

Smith, who himself was inspired to join PEP by a rousing Rohr speech, was a board member involved in creating the go-forward plan and eventually was asked by the board to take the CEO chair.

“I thought about it and prayed about it for a few weeks and indicated to the board that I’d be willing to do whatever I could to help,” he told me in a phone interview last week.

Smith is pleased with the recovery. “Our staff responded like champions,” he says. “We had no significant turnover or departures. They really responded with a plan to ensure this continued. They came together and said ‘We’re not going to let this thing fall apart.’”

According to Smith, loss of volunteers was minimal, something other board members confirm. He admits that contributions are down slightly this year, but attributes some of that to the economy and says that the organization is “well on track to satisfy our needs for this year and into 2011.”

While Smith may not be as photogenic as Rohr, in his own quiet way he has clearly made the organization his own, albeit with an even clearer servant leadership ethos. Even so, while the students cheer everyone, his mere entry into the room sends them into a frenzy. They refer to him as their brother and mentor. The “Investor Bucks” provided to the judges feature his face on the bill. When he speaks, though, his conviction and emotion make clear that this is about belief and passion, not demagoguery.

“We’ve come to find that it’s not about the one personality,” Smith says, “but the importance of continuing to serve the men.”

In a conversation with Amy, a representative of the Harry and Jeannette Weinberg Foundation, one of PEP’s largest funders (and also a funder of NFTE), she bolsters those claims. She is on site as an executive judge, the first time anyone from the foundation has been there for the competition and graduation.

She says that while a couple smaller funders had pulled out, her group is impressed with the good job PEP continues to do of delivering -- and tracking -- positive outcomes.

“It has proven itself beyond [Rohr’s] leadership,” she says. “Now it is about what the program achieves, and that is real, tangible results.”

I ask what, if anything, surprises her on her first visit. After a brief pause, she brightens, saying simply, “There’s joy.”

Later in the day, when executives get a chance to speak to the students about their impressions, she says, “I know people know I’m with a funder. And they keep thanking me. Stop it. Don’t thank me anymore.”

She gestures towards the assembly. “This,” she says, “is all the thank-you I need... Now we need to figure out how to bring PEP to more people.”

According to multiple sources, despite her dramatic fall from grace, Rohr may be trying to do just that, or at least something similar. I’m told she is raising seed capital to start a new prisoner-focused organization back in her home state of New York.

Meantime, PEP’s goal is to grow to serve all 520 prisoners in Cleveland and then look towards expansion to prisons near Dallas and beyond.

---

If you have been to a business plan competition before, you probably have the wrong impression about what to expect in Cleveland. This is not about novel concepts or creating the next Google. The business plans are well-written, well-researched and cover all the bases, but they are largely for traditional businesses: painters, landscapers, electricians, caterers and other trades.

It also has to be understood that in reality, only a few will start these businesses in the outside world: Out of just over 650 graduates, about 80 businesses have been launched. However, the 90 percent employment rate among graduates suggests that the process of learning what goes into building a business, the levers that make the difference between success and failure, help make these men more employable.

The plans are, on the whole, over-optimistic, ramping revenue too quickly. They assume that customer number one will materialize from the ether, telling his friends and neighbors of the remarkable business, initiating a viral chain that will envelop the market with customers eager to pay premium prices.

That is to say, they are not dissimilar from most plans presented to venture capitalists and at MBA business plan competitions.

It is clear that all have been coached on some common tenets and a common format: Market through networking, flyers, business cards and the internet. Send birthday and Christmas cards to customers. Do newsletters highlighting discounts. Customer service is king. Offer a premium service at a premium price. Donate a portion of proceeds to charity.

Each pitch, printed by James, the graduate-printer I met earlier in the day, also contains a “personal statement” -- a history of the contestant, including his crime(s) and what he has gotten out of PEP. (This is not in the version posted online.) They aren’t templated and have the variety and unflinching honesty of the personal testimonies we’ve heard.

Every contestant has a good grip on the drivers of the business: the average revenue per customer; the cost of goods sold; operating expenses; capital outlays; return on investment.

However, the pitches deviate from most I’ve heard (and many I’ve given) in two key ways:

First, every contestant makes a clear, concise "ask," stating precisely what they are going to contribute and exactly what they seek in terms of capital or an advisory board position.

Second, whatever their level of articulation, every single contestant makes eye contact throughout the entire pitch and question-and-answer session-- And not in a creepy “I’ve-been-trained-to-do-this-so-I-can’t-blink” manner that I’ve seen in some professional pitches. It is with a natural, confident poise that I’ve rarely seen anywhere. It is stunning.

We hear eight pitches in the first round. They are of varying levels of quality and sophistication, but all represent themselves well. As a judging panel, we ask probing questions but are careful to keep things positive. All handle questions with poise and thank us for each suggestion.

As well as the contestants are doing, by the last pitch, I’m flagging a bit. I’ve been up since 4 a.m. for the drive from Dallas, and after several hours I’m starting to feel like I’ve heard it all.

Then, Daniel steps up to speak.

He is short, slight, a little hunched and asthmatic, his eyes small dots behind thick glasses. I am utterly unprepared for anything remarkable.

With serene confidence, Daniel launches into the pitch of the day, for a welding business he intends to start in Dallas. He not only has the experience necessary, but he even has historical figures from his father’s business to back up his assumptions. He knows that in the digital age, fewer people are going in for such work, pointing out that the average age of a welder today is 56. He speaks with expertise and passion, never pausing and never rushing. There’s little fluff here -- it is real world knowledge, expertise and energy from the student with the third-highest GPA. When he finishes, the room erupts with applause.

We judges are left with an easy choice and a difficult one. Daniel clearly goes through, but there are another three presentations that we think stood above the others. We eventually come to a consensus that Ryan, a Houston man who wants to launch a solar cell sales and installation business has the most complete package.

We then hear from two of the semifinalists from another room. They are good, but either Stockholm syndrome is setting in or they aren’t quite as strong as the ones we put through. We allocate our funds more evenly than in the first round.

After another brief gathering in Club PEP, we’re dismissed for the day. Exhausted, I head to the Best Western and am asleep before 9 PM.

---

Day two starts much like day one: the cheering welcome, the dancing and a reprise of the line game. We have some new judges, including a large group of employees and friends of a Chicago travel company that has hired PEP graduates.

One of the friends introduces herself to the room as a pharmaceutical sales rep. “I sell drugs the right way,” she quips.

Also in attendance is Karine, a Canadian who is trying to launch a PEP-type program in her native country, joining other PEP-inspired programs in Germany and Scotland.

The line game has some new wrinkles today. “Step to the line if you will wear a cap and gown for the first time ever today,” Joekel commands.

Nearly half the men step up.

“Step to the line if you’re seeing your family for the first time since coming to prison.”

About ten men, including Daniel, our room’s winner, step forward. I’m later told that one man’s stepfather is bringing his real father to meet him for the first time ever.

Meantime, I and my cohorts from the judging room are campaigning for Daniel, who is one of the three finalists. We do so even having not seen the other finalists. “He did well and he’s our boy, so we want him to win,” I tell other execs.

But, in a fit of the sort of no-holds-barred honesty being around PEP seems to engender, I offer a confessional addendum, “... and it’ll make my story better.”

Jay, a Houston businessman who judged with me yesterday, beams when Daniel steps up to lead the Pray-in. We high-five.

The atmosphere, if possible, is even more amped than the first day. The urgency of the impending graduation strikes everyone. But first, there is business to attend. The three finalists must present and be judged.

Daniel is first. There are some technical issues with sound that cause him to have to restart. He’s clearly a little nervous and emotional. Delivering a line from the prior day about doing work you love elicits a pause and a choke on the word “love.” My heart races.

He recovers and nails the close. Standing ovation ensues. I’m feeling good about his chances.

The next finalist is Jayme, the aforementioned “Smurfette” from Fort Worth. He proposes to launch a T-shirt printing and design shop focusing on positive images (No “I’m With Stupid”) and targeting Fort Worth ISD students and sports teams. His plan is pretty sound, but he gets really flustered, twice having to stop for what must feel like an eternity. That hitch is forgotten as he pulls off the top from his jumpsuit to reveal a t-shirt with an elaborate design, hand drawn, as a sample of his work. It is clear that the nerves are a matter of desire rather than lack of preparation.

“Wanting something is not enough,” he tells us. “You must hunger for it.”

John J. goes last with a pitch for a Houston-based electrical contracting company. It is, bar none, the most assured and articulate pitch I have ever heard anywhere. He leads in with a hypothetical about the listener suffering a power outage in the Texas summer, sweating in silence only to hear the hum of the neighbor’s air compressor, running on emergency solar power from a unit with his logo on it. He highlights his wealth of management experience while owning the lessons of failures past: “My company did not fail me. I failed my company.”

He loses a little steam when going through the numbers but delivers a rousing close, even pulling an altar-call, asking those of us willing to vote him our full $10,000 to stand up and be recognized. Several executives stand up. This one’s going to be close.

---

PEP’s Theresa Black works mostly with people who haven’t ever been inside the Cleveland Correctional Center: the family and friends of the prisoners. In many cases, families have gone past the point Max and his daughter reached, writing off men who have disappointed and failed one time too many. It is Black’s job to get them to understand the transformation that PEP brings and the importance of their acceptance as the men try to come back and rebuild their lives.

We executives file into the gym to find it brimming with the fruits of her labors: spouses, parents, children and grandchildren huddled around tables snacking on sandwiches and lemonade. A PEP volunteer is telling them about the program and the changes it has helped their men make. To me, they look subdued, even skeptical.

After a brief intermission, we hear the opening bars of “Pomp and Circumstance” and one by one, the students file in. Every one stands tall and walks with an air of pride. I see an older gentleman I easily identify as Daniel’s father sitting alone on the other side of the gym, and see him brighten as his son walks by. I also see My’s family sobbing as he strides past. His father holds his head in his hands and convulses.

Humphrey gives the assemblage the basic stats and premise of PEP. He then recognizes the families who came, polling on how far they traveled. The average looks to be around four hours, although some drove from the West Coast and Canada.

Special honors are accorded to the business plan finalists, with John J. taking first prize, Daniel second, and Jayme third. A man named Clayton is named “Mr. PEP” based on a vote of the men on who best exemplifies the principles of the organization. Appropriately, he is also the valedictorian.

The commencement speaker, Scott Wesley, is a PEP Class Five graduate who now helps ex-cons, homeless and drug addicts find work. “Makes sense, because I’ve been all three,” he jokes.

He talks about life post-graduation: “I got out, got the tattoo removed from my neck, got my grill fixed and learned how to tie a double-windsor,” he begins.

Then he stresses the struggle that even the best of them will face. “I followed my pal in and out of here. He was smarter, handsomer and had a better business plan than I did. But now he’s back in for a fresh fifteen, one of the 10 percent who can’t make it with the free-world squares.”

“I trespassed. I came into Texas in a stolen car, so I everywhere I was I was trespassing... But I had to hit bottom. I got free when I got locked up.”

He points out to the families: “Look at them. Those are the people you’ve let down who came to see you today. You are forgiven. You have been set free.”

Next, the diplomas are distributed. Like at any graduation, the principal, in this case Smith, poses for a photo with each grad while family and friends cheer. But the cheers here come with more vigor and apparent pride than at any graduation I’ve seen before, all earlier doubt and reticence seemingly gone.

Another executive-judge leans over to me and whispers, “Man, I wish somebody was that proud of me.”

My crosses the stage, and the family that was sobbing before is jumping up and down, the father giving a double thumbs-up.

Joekel takes the stage and announces that the men will now be able to join with their guests without the usual prison rules: “No one standing over your shoulder, telling you not to hold hands.” Guards are stationed at the periphery, but are unobtrusive.

The grads carry offerings for their guests: custom-designed teddy bears for their children and roses for their spouses. Joekel notes that for many of the children, this will be the first gift they have ever received directly from their father’s hand.

If there is a dry eye anywhere, I can’t find it through my own tears.

After gifts are given and before the extended two-hour reception begins, the entire assembly joins in prayer. One particular petition sticks with me:

“One day, may these children get to see not just their father, but their daddy.”

---

As the reception begins, I mingle a bit but keep a respectful distance, not wanting to interrupt family reunions. Still, several grads deliver high-fives and hugs. Max, Jonathan and their family give me thumbs-up. Reness brings his parents to meet me. His dad, an engineer, has an invention he’s looking into patenting, but says he’s going to wait for his son’s release to get him to write a business plan before going to market.

I make a point of shaking the hand of Daniel’s father and telling him how proud his son did him. He smiles and nods vigorously.

Jayme sits with his children, a son whom he’s not seen since infancy and a daughter he’s never seen before. He looks up balefully, saying “This separation, it’s been so hard on them.”

The wide-eyed siblings nod, tightly clutching their bears.

“I’ll be in Fort Worth soon,” he tells me. “Watch for me. I’ll make it.”

If he’s like 90 percent of PEP grads, he will. But everyone has reinforced that the hard work really begins on release.

Sixty percent of graduates go to a PEP-run halfway house. “What happens at home can be part of the problem that got them here,” says Smith. The voluntary transitional home can help the men slowly wean off the rules and structure of prison, gradually learning to deal with the myriad opportunities to make the sort of wrong decisions that got them in trouble.

In contrast, most Texas prisoners are set free with $100, a bus ticket and no direction.

“Imagine the choices these guys face that they don’t know how to deal with anymore,” points out Mike, a volunteer who helps the men with spiritual development. “After years of no choice in the chow line, they walk into a grocery megastore? When a lot of these guys went in, there were only a couple cell phones on the market. Can you imagine waking into a cell phone store and trying to make a good decision on a phone? And those are the easy decisions they face compared to the things that can bring them back here.”

The North Dallas halfway house, known as “Casablanca,” is near Watermark Church, which is a PEP supporter. It serves the thirty percent of graduates who are released into the DFW area.

“You’re gonna get tested the minute you walk out this door,” Max had noted earlier in the day. The PEP staff agree, continually reinforcing the importance of going to the halfway house, abiding by the rules and working with a volunteer mentor. The clear message is this:

PEP is a family, now fourteen generations deep. It is always there to offer a “hand-up” and it can be the difference between success and becoming a statistic.

These men have been on wanted signs, but now they are featured on superhero posters. They came to Cleveland in cuffs, but now sport caps and gowns. They own their crimes and in embracing their shame have found pride and the respect of privileged people who, in ordinary circumstances, would lock their doors against them.

There is a recurrent theme when you talk to PEP staffers and volunteers -- the sense that they, not the prisoners, are getting the best end of this exchange. I heard it first in my phone interview with Smith:

“I’ve been blessed in many ways with opportunity,” he says. “It hit me that there’s a population of men in many cases that have not had many real opportunities presented to them... But I wasn’t in the unit my first time for more than an hour before I was overwhelmed about what I was receiving. Every time I go to the unit and every time I meet with these men in the free world--- Well, I am impressed. Their hearts are so strong and resilient.”

After receiving a gift of an autographed pencil sketch from the graduates, he is even more clearly touched.

“In seeking to serve,” he says, choking back tears and pausing for nearly ten seconds before recovering, “...I am served more than I can explain.”

That sentiment is echoed by every volunteer I meet. I’ll echo it too. I drive home Friday night unable to shake off the incredible things I’ve seen, the remarkable people I’ve met on both sides of that blurry line.

As I wend my way up I-45, I catch myself dreaming about my next trip to prison.

Photos from the event are coming soon and will be added to the story as soon as we receive them. All photos courtesy PEP and by Photo Studio Houston.

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