▶ 0:20:08Christmas party december 11th at 4 p.m. Right here in this room. So I hope everybody can come. Good morning everyone. Uh, I now call the committee on small business to order, and without objection, the chair is authorized to declare a recess of the committee at any time. Uh, before we begin opening statements, I want to congratulate my friend, ranking member velasquez, as she will be retiring at the end of one of the 119th congress.
▶ 0:20:34She's been a leader for over 30 years in the house and for 27 years in the in the committee. And I'm looking forward to continuing to work with her and next to her through the end of this congress. And thank you for your patriotism and love of country. >> thank you. Thank you. Thank you, Mr. chairman.
▶ 0:21:18Thank you, Mr. chairman. It has been the honor of my life being in this committee and serving small businesses across the country. Thank you. >> and she likes orange, so. I now recognize myself for my opening statement. Welcome to today's hearing. Entitled main street under attack the cost of crime on small business.
▶ 0:21:47Today's hearing on crime is unfortunately timely. As many of you know, on the day before thanksgiving last week, two west virginia national guard members were violently ambushed in our nation's capital. Tragically, the 20 year old sara beckstrom lost her life and 24 year old andrew wolf continues to fight for his. We continue to pray for their families during this devastating time. I want to thank our witnesses for joining us today. We recognize many of you have been have traveled to be here, and we appreciate your time and your perspective.
▶ 0:22:19America's prosperity begins on main street. While small business owners work hard to create jobs and build a community. However, main street businesses are under attack in many cities across the country. Violent crime, organized retail theft, and petty shoplifting are hitting small businesses hard. As a small business owner myself in the car, as a car dealer in the car industry, we've been seeing an uptick in stolen inventory and cyber attacks. This increased crime has devastating impact on our operations. These costs cannot be passed on to the consumer.
▶ 0:22:50Unfortunately, the crime is being fueled by political choices that embrace soft on crime policies at the expense of hard working americans. Policies like cashless bail, defunding the police, prosecutorial decisions that fail to impose consequences for repeat offenders, make it extremely difficult for mom and pop shops to operate. All too often, we see headlines of repeat offenders committing horrific crimes.
▶ 0:23:16In charlotte, a 23 year old ukrainian refugee was commuting home from a work at a pizzeria when she was horrifically stabbed in the neck. The murder had 14 arrests and last month a 26 year old woman was set on fire in the chicago subway by a man who had 53 criminal cases against him, with only two resulting in jail time. This should not be possible in a civilized society.
▶ 0:23:41So even more alarming statistics from government agencies are likely missing this spike in crime. More than half of small business small businesses don't bother reporting thefts anymore because of the limited police response and crime creates uncertainty, raises costs and drives away customers. When small business owners are forced to install expensive security systems, lock goods away on shelves and brace for a daily theft, they divert capital from hiring, expanding and innovating.
▶ 0:24:10These challenges are not limited limited to physical crime. Cyber crime is growing in significant to main street. Small businesses are 210% more likely to experience a cyber attack than large companies, simply because they lack the resources to implement strong cybersecurity policies. Attackers know this, and our foreign adversaries knowingly target smaller companies because they assume a weaker defense and faster payout.
▶ 0:24:35As artificial intelligence becomes increasingly prevalent, small businesses are at a greater risk of the ai generated emails, impersonation schemes and scams. That is why I'm thankful that president trump is taking decisive action to make america safe again.
▶ 0:24:53President trump is restoring law and order to cities across the country and taking decisive action to deter cyber criminals by reversing the weak biden-harris era mandates, by restoring law and order, strengthening cybersecurity, and reversing fatal soft on crime policies, republicans are giving small business the stability and confidence they need to grow, compete and succeed. I want to thank all of you again for joining us today, and I look forward to the conversation ahead. And now I yield to my friend, ranking member from new york, miss velasquez.
▶ 0:25:25>> thank you, Mr. chairman, and thank you to all the witnesses for being here this morning. Unlike large corporations, small businesses often lack the resources, expertise and experience to address and recover from a crime in cyberspace. A higgs a hiscox study found that 41% of small businesses were victims of a cyber attack in 2023, with a median cost of $8,300.
▶ 0:25:53These attacks on main street america, such as ransomware, data breaches and email compromises, result in business operations disruptions and the theft of valuable assets and funds.
▶ 0:26:13Under my leadership, congress passed the bipartisan small business cyber training act of 2022, which president biden signed into law, requiring small business development centers to train and certify staff to provide cybersecurity counseling to small businesses.
▶ 0:26:33Democrats remain committed to supporting and expanding cybersecurity resources for small businesses, and in real life, public safety has been a hot button issue since the onset of the covid pandemic. Under the previous administration, democrats made landmark investment in keeping our communities safe.
▶ 0:26:54The american rescue plan act gave $15 billion to state and cities for their police forces, and violent crime prevention. Similarly, the landmark bipartisan safer communities act closed key firearm safety loopholes and appropriated $13 billion to law enforcement and community violence violence intervention programs.
▶ 0:27:19Keeping guns and violent crime off our streets. In fact, over 700 defendants have been charged on their offenses created by the bca, including traffickers linked to transnational cartels and narco and narcotic distributors. In other words, democrats are serious about safety. But it seems that the trump administration is not.
▶ 0:27:50Under president trump, the cybersecurity and infrastructure security agency laid off a third of its workforce, firing dedicated experts who kept our nation on main street safe from cyber attacks, and his allies in congress neglected key federal cybersecurity provisions.
▶ 0:28:12They failed to reauthorize a key cyber intelligence sharing law, putting our cyber community in the dark about significant cyber threats. And they allowed the state and local cybersecurity grant program to expire at the department of justice.
▶ 0:28:32President trump revoked $500 million in grants to programs carrying out vital work and violent crime prevention, policing and prosecution, victim and survivor support, juvenile justice and child protection and corrections. He also rescinded regulations making highly lethal firearm attachments harder to obtain, empowering violent criminals across the country.
▶ 0:29:01For his part, the trump doj claims that it will focus on law enforcement operations, combating violent crime, protecting american children, supporting american victims of trafficking and sexual assault, and promoting coordination of law enforcement efforts at all levels of government. But clearly, actions speak louder than words.
▶ 0:29:26President trump's crime control cuts targeted empirically proven programs designed to achieve his stated goals and ultimately hurt law enforcement and their ability to fight crime instead of real solutions.
▶ 0:29:42President trump weilding racist rhetoric and sensationalized stories has deployed federal agents and troops to roam the streets of america, city where violent crime levels are at lows unseen in this century. Wasting valuable resources for photo ops. President trump has chosen to make america more dangerous and exploit the problem of crime for political gain.
▶ 0:30:12Main street is under attack. All right. Republicans think a hearing like this can help them rationalize their agenda and impose draconian fascist policies upon the american people. So to everyone watching, don't be fooled. The federal government can act to improve our public safety by protecting and expanding upon the investment we know work.
▶ 0:30:39So today, I hope we can refocus the conversation and the administration can refocus their attention on what will meaningfully improve safety for small businesses and their employees. I yield back. >> gentlelady yields back. I will now introduce our witnesses. Our first witness here with us today is Mr. tom wickham. Mr. wickham is the vice president and managing director of government affairs for the us chamber of commerce, right here in washington, D.C.
▶ 0:31:10For over 25 years, Mr. wickham worked on capitol hill. Many of you know him, beginning under speaker newt gingrich and concluding under speaker nancy pelosi, including serving as a parliamentarian of the us house of representatives. He is recipient of the speaker john w mccormack award of excellence, serves on the advisory board of the center of effective lawmaking partnership between the university of virginia and vanderbilt university. And they're doing pretty good, aren't they? Right now, you got two winners there and volunteers as a citizenship teacher in the community, Mr.
▶ 0:31:41Wickham earned bachelor of arts in political science and government from the university of iowa and a jd from the university of iowa college of law. We want to thank you for being with us today, tom. Our next witness here with us today is miss lisa meyer. Uh, and miss pete aguilar is executive director of the national cyber security alliance, based in austin, texas.
▶ 0:32:01Uh, miss meyer began her career with ford motor company and later advanced into technology, marketing and cybersecurity leadership roles at cdk global infosec and mediapro. She serves on the us secret service or secret service. Cyber investigations advisory board, is a volunteer advisory board member at identity theft resource center, and is a two time recipient of the cso award. Miss.
▶ 0:32:29Miss meyer earned a bachelor of arts from the university of michigan uh, majoring in marketing, psychology, and german. We appreciate you being here today. Our next witness is Mr. uh, I'm going to get it right now. Rag. Caleb jian okay. Got it. Mr. kalajian is the owner of henry's house of coffee at third generation coffee business in san francisco. Before returning to the family business, Mr.
▶ 0:32:58Kalajian, uh, spent over a decade in corporate finance and analytics, including roles at triple a, blue shield of california and optimum health behavioral solutions. Uh, Mr. kalajian is joined the coffee shop full time in 2013 as a certified specialty coffee sensory and and analysis, and a member of the us chamber of commerce, small business council. Uh, Mr.
▶ 0:33:24Kalajian earned a bachelor of arts in economics from the university of california, davis and a master of business administration in finance from san francisco state university. I want to thank you for joining us today, and I'm looking forward to our conversation. And with that, I now recognize ranking member from new york, miss velasquez, to introduce our last witness appearing before us today. >> thank you, Mr. chairman. Mr.
▶ 0:33:49Gregory jackson junior is the founder and owner of safer futures llc, a policy and strategic consulting firm specializing in violent crime reduction and prevention. Mr. jackson's expertise on gun violence began in 2013, when he was shot and seriously wounded. As an innocent bystander.
▶ 0:34:10That moment gave him his mission to ensure no family, business, owner or community will ever endure the pain he did. Eventually, Mr. jackson was appointed to the previous administration as a deputy director of the hawaii house of guns, office of gun violence prevention, and special assistant to the president.
▶ 0:34:34In this role, he helped implement the bipartisan safer communities act and oversaw the expansion of community violence, violence intervention resources in the federal government. Mr. jackson holds a bachelor's degree in government from the university of virginia, and is currently studying for a master of public health degree degree at yale university. Welcome, Mr. jackson, and good luck with your master, I yield back.
▶ 0:35:05>> thank you again to all of you. We appreciate all of you being here today. Now, before recognizing the witnesses, I would like to remind them that their oral testimony is restricted to five minutes in length. And we do stick with that. Uh, if you see the light turn red in front of you, it means that your five minutes has concluded and you should wrap up your testimony. And if you still keep talking, you'll hear this. That means quit talking. Okay? And I now, with that in mind, I now recognize Mr. wickham for his five minute opening remarks.
▶ 0:35:35>> uh, good morning, everyone, and thank you for inviting me to participate in this hearing. My name is tom wickham. I'm a vice president and managing director of government affairs at the us chamber of commerce. I've been at the us chamber since 2021, from 1995 through 2021, I served in the house parliamentarian's office, where I had the honor of advising many of you on your constitutional and institutional responsibilities.
▶ 0:36:04The us chamber of commerce is the world's largest business organization, representing companies of all sizes, including small and mid-sized businesses. We also have local chambers of commerce and leading industry associations as members. The chamber serves as the voice of american business in washington, across the country and across the globe.
▶ 0:36:29Since 2021, I have visited communities throughout the country, meeting with policymakers, law enforcement, prosecutors, and businesses to find solutions to the complex problems of crimes against businesses.
▶ 0:36:45The us chamber is committed to working with this committee and small businesses to combat crime and its negative impact on communities, while higher profile crimes and finger pointing often grab the headlines, small businesses continue to struggle with rising business focused crimes.
▶ 0:37:08Retail crimes like organized shoplifting, rings and smash and grabs have been persistent problems for america's businesses. Crime numbers often fluctuate from year to year, but the long term trends are clear here, with larcenies involving shoplifting having doubled since the 1970s, according to statistics from the nonprofit council for criminal justice.
▶ 0:37:32The effect of retail crime is widespread, with innocent consumers, employees and business owners bearing the financial and societal costs. Retail crime creates higher prices for consumers, results in stores having to close their doors, and communities are left without vital goods and services. Cargo theft is another rising concern for the business community.
▶ 0:38:01Cargo theft is increasing rapidly, with a significant shift toward sophisticated fraud and deception tactics. Cargo theft results in higher costs throughout the supply chain, ultimately impacting small business shippers and retailers.
▶ 0:38:19The latest numbers from cargo net show a 13% increase in cargo theft incidents in the second quarter of 2025 over 2024, following record high numbers of cargo theft incidents in 2023 and 2024.
▶ 0:38:38Unfortunately, texas is at the center of the problem with texas, illinois and california as the top three states for cargo theft, with 53% of incidents occurring in those states. And crimes against small businesses are not just a matter of national statistics, but affect all businesses at the local level.
▶ 0:39:01Rag kelly will testify to the continued problems plaguing his family run coffee shop in california. Rag is a proud member of our us chamber small business council, where, unfortunately, these stories are all too common and often include businesses in texas and in new york, according to a texas study led by their comptroller's office.
▶ 0:39:31Organized retail theft costs businesses in the state of texas over $421 million annually. These skyrocketing costs are in addition to the mental impact on small businesses, owners and employees.
▶ 0:39:45The us chamber has summoned policymakers and the business community to join us in our three part call to action for improved coordination, aggregation and prosecution in combating crimes against businesses. The us chamber stands ready to partner with this committee to fact pass effective laws and policies to combat crime, and ensure our communities are safe.
▶ 0:40:16I am happy to take questions at the appropriate time. >> thank you very much. And now recognize miss blake moore for her five minute opening remarks. >> chairman williams, ranking member velasquez, and distinguished members of the committee, thank you for the opportunity to provide testimony today. I greatly appreciate the committee, including cybersecurity, in this discussion. The national cyber security alliance is a nonprofit on a mission to educate people on how to protect themselves from cybercrime, scams and fraud.
▶ 0:40:44From families to fortune 500 and everyone in between, we work to make cybersecurity easier and more accessible. We reach millions of people with our campaigns on everything from ai deepfakes to avoiding scams like pig butchering. I haven't always worked in cybersecurity. I spent the first 15 years of my career in a large enterprise, working with small businesses, car dealers. I learned firsthand the importance of small businesses to their communities and the value of partnership between the factory and the franchise.
▶ 0:41:10Cybersecurity is not just a technical issue, it's a business risk that small businesses can learn to manage. The majority of security incidents are not technology failures. They're people and process failures. Many incidents have poor basic it management as their root cause, like employees using the same passwords on multiple accounts, a lack of multi-factor authentication, or mfa operating systems that are out of date and vulnerable software that goes unpatched. There are a few myths we regularly hear from small businesses. Myth.
▶ 0:41:37I just don't think I'm on the radar of the bad guys. 81% of small businesses have experienced a cyber incident. Businesses with fewer than 100 employees are now two and a half times more likely to be targeted than those with more than 500 employees. Small businesses are also targeted by scammers because they don't monitor for brand abuse like large organizations. According to visa. Fraud has evolved from being opportunistic. It's now strategic, automated and scalable.
▶ 0:42:04We're entering an era where nothing can be trusted at face value. Ai enables the creation of synthetic content, fake merchant websites, fake identities, fake chat agents that are all indistinguishable from legitimate businesses. Myth we don't have anything of value to the cyber criminals. For my auto experience, I can tell you that the average car dealer has 50,000 consumer records. That includes social security numbers, driver's license numbers, and more. Each of those records is worth hundreds of dollars on the dark web.
▶ 0:42:31Small business intellectual property is also very valuable to nation state actors like the people's republic of china. There are multiple examples of small businesses operating in highly specialized niche markets whose businesses have been threatened when their ip was stolen by the prc, who then spun up a low cost competitor producing the same highly specialized product at a fraction of the cost. I've met a small business owner who is the only manufacturer in the us of a piece of equipment necessary to road paving. Who said to me, why would a china attack us?
▶ 0:43:00He had no understanding of the risk of ip theft to his business. I've met a small business in a highly specialized segment who unknowingly employed a chinese spy for years. They didn't know it until the spy went to work for a large enterprise that detected the espionage quickly. The chinese national was convicted, but the small business still doesn't know what ip was stolen from them because they had no monitoring in place at the time they employed him. State actors were also increasingly targeting small businesses because they are entry points into supply chains.
▶ 0:43:27Russia and china patiently make multiple hops through smaller companies to get to their desired target. Myth. I've got a guy, an it guy. In our experience, small business owners don't know enough about cyber to manage it as a function of their business. They know enough about finance, for example, to have a meaningful conversation with their accountant. But the same is not true with their it person. Small businesses don't manage what they don't understand. So our cyber secure my business program educates owners using business terminology they can understand so they can better manage risk.
▶ 0:43:57Myth cyber security is too expensive. My it person just wants to spend money. Again, this lack of education and communication. One example I heard at a car dealership involved an end of life pc in the parts department running windows xp, introducing vulnerabilities into the dealer. When the it manager asked the owner to replace the pc, the owner said the parts manager says it works just fine, declining to make the investment. The failure was a lack of communication on the amount of risk to the business that that old pc represented.
▶ 0:44:24So all these myths point to a dangerous disconnect between the perception of risk and the adoptions of basic security controls. Like mfa. We believe that public private partnerships are an effective and efficient way to help small businesses learn to better protect themselves. According to our research, most people don't turn to the federal government for advice and guidance. They look to the private sector, companies, vendors, nonprofits, our cyber secure my business live talk remote course is just an hour a week for six weeks. Cyber security does not have to be as intimidating and confusing as people perceive it to be.
▶ 0:44:55Education works. We stand ready to work with federal agencies to better educate small businesses on how to avoid being victimized by cybercrime, ip theft, and scams through partnerships like cooperative agreements between nonprofits and government, we can work more efficiently and effectively than government can alone. We are stronger together. I would like to thank the committee and offer our ongoing partnership to support america's small businesses. >> thank you very much. And now recognize Mr. kalajian for his five minute opening remarks.
▶ 0:45:26>> chairman, ranking member and members of the committee, thank you for the opportunity to testify today. My name is kalajian and I'm the third generation owner of henry's house of coffee, a small batch, family owned coffee roaster that's been a part of san francisco's sunset since 1965. Our business was founded by my father and grandfather, who immigrated to the united states from lebanon.
▶ 0:45:49For decades, our shop has been a place where generations of neighbors gathered, share stories, and feel a sense of community over a cup of coffee roasted on site. In recent years, however, that sense of community and safety has eroded under the weight of rising crime and lawlessness that small business owners like myself face daily. About two years ago, a mentally unstable individual began repeatedly stealing from my store.
▶ 0:46:19He comes in, takes drinks or food from our refrigerated case, sometimes three times a week, and occasionally steals from our tip jar. On multiple occasions, he's harassed me and my staff, once even attempting to spit in my face. He stolen from us more than 35 times. Repeat offenders not only hurt the bottom line, but drive away loyal customers and endanger staff.
▶ 0:46:47I called the police numerous times. Officers respond quickly and I can tell they want to help, but they've told me their hands are tied. One officer advised me that my best option was to file a restraining order. I filed one, but enforcement has proven impossible. He returns repeatedly and the police can't take meaningful action for employees and customers. This isn't about the cost of stolen goods. It's about safety.
▶ 0:47:13I constantly remind my staff not to intervene because no one cup of coffee is worth someone getting hurt. Yet some of our loyal customers feel so protective of our shop that they've tried to stop the thief themselves. My worst nightmare is that something will happen to my employees or to my customers. The toll this criminal activity goes far beyond dollars.
▶ 0:47:35It's exhausting, demoralizing, and deeply discouraging to work hard every day, only to feel that the system no longer values your contribution. We've installed metal gates on our storefront. Shatterproof window screens replace stolen equipment such as cash registers and ipads, all costly measures for small business still recovering from the pandemic.
▶ 0:47:57Our shop even built a parklet during covid so neighbors could enjoy coffee, but it's frequently vandalized between security costs repairs, we spent thousands simply to stay operational while watching nearby businesses close due to the same issues. San francisco's sunset district was once a quiet, family centered neighborhood. Since the pandemic, criminal activity that was once concentrated downtown has spread into our residential communities.
▶ 0:48:25Break ins, vandalism, and theft are now common topics of neighborhood conversation. The closure of a nearby essential business, like the only local pharmacy, shows how crime affects not just merchants, but the very fabric of the community. When businesses close, blight follows, vacant storefronts attract more crime, and a cycle of decay begins.
▶ 0:48:50Each closure represents a lost opportunity for community connection and economic resilience. At the heart of this problem, our policy failures local prosecutors, constrained by political and legal choices, rarely pursue these cases. Police officers, many of whom are empathetic and dedicated, feel demoralized from a business owner's perspective, the absence of local leadership compound these problems. Our city supervisors have rarely visited our shop.
▶ 0:49:19Promises are made about prioritizing public safety, but in practice, laws and enforcement remain unchanged. My father always taught me that incentive drives the behavior. Show me the incentive and I'll show you the outcome. Right now, our incentives tell people that crime pays and accountability doesn't. That cannot be the legacy we leave for the next generation of small business owners. Henry's house of coffee is not just a business.
▶ 0:49:49It's a testament to immigrant perseverance, family legacy, and community pride. I love my city and my customers, and I want to remain part of san francisco's revival. But unless policymakers act decisively to restore law and order, more small businesses will make the painful choice to leave. Thank you for listening to my story, and for giving small business owners a voice on this issue. I look forward to your questions. >> thank you very much. And I now recognize Mr. jackson for his five minute opening remarks.
▶ 0:50:21>> all right. Thank you, chairman williams, ranking member velasquez and the committee for having me. I'm greg jackson, a D.C. resident, a survivor of gun violence here in the district, but also a small business owner and former deputy director for the white house office of gun violence prevention, uh, where we coordinated federal resources to implement life saving policies and coordinated with local leaders to reach a nationwide reduction in violent crime by 13.2% and homicides by 31% in just two years.
▶ 0:50:48I spent the last decade of my life working to address this crisis. After being shot in 2013. Um, I was shot by a stray bullet while walking home. Uh, and that bullet hit two arteries and left me with a 50% chance of survival. Uh, but since that fateful night, uh, you know, nearly a million americans have been shot or killed. Um, from buffalo to baltimore, stockton to washington. We've seen how gun violence is driving violent crime, but also destroying families across our country.
▶ 0:51:15Uh, and it also remains the leading cause of death for youth in america, the leading cause of death for pregnant women in america. Uh, above childbirth complications. And now even a leading cause of newly disabled americans, with 1 in 5 americans being impacted by violence. Uh, this is also become personal for too many. But we also know there's a clear financial cost to this crisis.
▶ 0:51:38Uh, according to brady, united and niger, we have seen this crisis cost our economy upwards of $557 billion a year, equivalent to 2.6% of the us gdp. With southern states bearing the brunt of this economic toll, uh, owning 41.4% of firearm related hospital costs, uh, and having a firearm death rate of 2.3 times higher than northeastern states. Additionally, gun violence has a direct cost for employers.
▶ 0:52:05The number of people shot increased by 400% between 2007 and 2020, according to data of individuals and dependents insured by their employer. It is estimated that a firearm injury causes employers $30,000 in direct medical spending. In the first year of injury alone. Employers must give employees who are shot a leave of absence, adding to over $535 million a year. Estimated impact on our businesses in our country, according to a recent harvard medical school research report.
▶ 0:52:36Uh gun violence is also estimated to cost private employers roughly 535 million per year because of lost productivity, and people who survive firearm injuries experienced a 40% increase in pain disorders. Uh, 51% increase in psychiatric disorders, and 85% increase in substance abuse disorders, affecting their ability to work and contribute to the business's goals and outcomes. But despite this crisis, in the last few years, uh, we have seen real solutions that work.
▶ 0:53:04Uh, in the last few years, we've invested in seeing historic reductions in violence and violent crime across our country, uh, without masked agents, uh, without military. But by investing in violence prevention, uh, by investing in law enforcement, uh, and most importantly, pushing accountability upstream to make sure illegal guns and firearms don't flood our streets. Uh, recently, even the current fbi director, kash patel, uh, celebrated historic low levels of violent crime.
▶ 0:53:30But we know these reductions are not a result of a few months of troops or fbi actions. They are a result of the billions invested in violence prevention, as well as these key policies and the hard work from business leaders and community leaders across our country, uh, to make our community safer. In fact, we saw a 54% reduction in homicides in baltimore, 41% reduction in phoenix, 38% reduction in chicago, even a 20% reduction in atlanta.
▶ 0:53:56Uh, but instead of investing more federal resources into what we know, what works, the trump administration has moved to dismantle and defund bipartisan strategies passed into law that reduce violence.
▶ 0:54:09Uh, they shut down the white house office of gun violence prevention, uh, in the big beautiful bill, they defunded law enforcement directly, defunded law enforcement by $418 million, uh, cut over 1 billion in mental health resources for schools, terminated 812 million for violence prevention and intervention programs, and dismantled important regulations like the zero tolerance policy for gun dealers to break the law.
▶ 0:54:33And now there are further plans to defund critical resources like housing, health and employment programs that we know address the root causes of violent crime. This is not the federal support that our small businesses or communities need. We need a government that is tough on crime by preventing it before it happens. And that means directing law enforcement to prevent illegal guns from flooding our streets that we know are being used for robberies, crimes, and homicides.
▶ 0:54:57Being tough on crime is funding atf to catch gun traffickers, to shut down rogue gun dealers and disrupt dangerous black markets that are selling illegal weapons that land at crime scenes. And being tough on crime is funding violence intervention and prevention programs, mental health resources for youth, and other ways that we know we can reduce violence. We have real solutions to reduce violence, to reduce violent crime, and help reduce the harm that gun violence causes to our economy and small businesses. And I hope that we'll continue to build on that progress.
▶ 0:55:25Thank you. >> gentleman yields back. And now, uh, I want to say as we get started, you'll see, uh, people moving in and out. It's not you said the wrong thing or the right thing. There's other hearings going on and you'll see that, uh, begin to begin to happen. Uh, we'll now move into the member questions under the five minute rule. And I now recognize myself for five minutes. Uh, Mr. wickham, in your testimony, you make it clear that most small businesses across america have been victims of crime.
▶ 0:55:55You note that these instances are becoming increasingly, uh, coordinated and violent and that the economic impact on small business are severe. The question is, how many small businesses nationwide are being affected by retail crime, and in which regions are you seeing the most significant impact? >> uh, thank you, Mr. chairman. Uh, that's a good question.
▶ 0:56:19When it comes to the statistics and, uh, continuing on a theme that we've heard earlier, one of the the statistics that's most distressing to the business community is the rise in violence accompanying an act, uh, criminal act.
▶ 0:56:36The recent studies by the national retail federation found that there's a 17% increase in violence accompanying these, um, individual acts of of criminality. And that's something that is a grave concern to both the small business owners we've heard from today, as well as our larger members.
▶ 0:57:00And when we see that violence, we often look at the laws of a specific jurisdiction. Is there a, uh, prosecutorial, uh, attitude toward certain crimes in that attitude in that, uh, district, or is there a question of police resources? And when we do a district by district breakdown, that's the type of thing that we're looking for.
▶ 0:57:29When we see that, we'll go in to states like ohio, florida, louisiana, wherever we have businesses that are reaching out because of rising crime, we try to meet with all of the actors in place. It is a multi-jurisdictional issue, so we are busy working with policy makers, with prosecutors, and with law enforcement to try to address these issues. Thank you. >> Mr. kelly.
▶ 0:57:59>> yeah. Mr. kalajian, uh, in cities where democratic leaders have embraced soft on crime policies like cashless bail, weekend prosecutions, small businesses are being hit the hardest. You've talked about that. Your coffee shop has faced multiple instances of theft. And unfortunately, you are not the only small business victim of these crimes. So can you explain how repeat theft, rising security costs, and the lack of meaningful law enforcement have affected your ability to serve customers in your community and have a successful business? >> yeah. Thank you chairman.
▶ 0:58:27I think that's the biggest issue is you have a mental challenge of feeling helpless. You have a embarrassment in front of customers where the the theft is happening and the customers are looking at you like, are you going to do anything? Um, and then you have the liability of, in my case, customers acting and taking on, um, to prevent the theft, which is a big scare for me as a business owner.
▶ 0:58:53Um, and in my area specifically, um, a lot of east asians, hard working, put their head down and don't complain. And I feel like as a member of the community, it's I have to speak up for them because they don't feel comfortable speaking up. >> come back sometimes. That's another issue. >> yes, sir. That's definitely a concern. Um, and as you mentioned, that goes straight to the bottom line. Mhm.
▶ 0:59:20>> uh, miss meyer, over the past few years, we've watched foreign and foreign adversaries infiltrate american networks and, uh, stealing sensitive data, uh, intellectual property and even penetrating the states army national guard system. So how do these large scale cyber attacks, uh, indirectly affect small businesses like mine and others?
▶ 0:59:40>> I think cybersecurity has turned into a kind of tax that we all pay, um, through ransomware attacks and just the, the cost of of protecting yourself. This has a sort of trickle down effect to even to us as consumers because, uh, it causes prices to go up. I think, um, the biggest problem that we see with small businesses is, is just getting their attention. They're very, very busy places.
▶ 1:00:09And, um, cyber security is an intangible. Protecting your business from physical theft is a very different thing. It's much more tangible. You can see it. You can't see a malware infection stealing information on your device. Um, and so I think a lot of small businesses just don't give it the priority that it needs until it's actually too late, until they've been affected. >> and my time is up. And I now recognize the ranking member for five minutes of questions. >> thank you, Mr. chairman. Mr.
▶ 1:00:39Jackson, how does the availability of guns escalate otherwise? Nonviolent incidents inside retail spaces like disputes, shoplifting, encounters or customer conflicts? >> yeah. I mean, we've seen, uh, you know, the presence of firearms really being the major driver of interpersonal conflict becoming deadly. Uh, in fact, now, uh, 81% of homicides in our cities are not connected to another felony.
▶ 1:01:08They're interpersonal conflicts with the presence of firearm, often in public places. >> thank you. And Mr. jackson found over 1 in 5 american adults have been personally threatened with a gun compared to other countries. How much worse of a problem is gun violence here? >> uh, we're nearly tripled every other developed nation when it comes to to violent crime related to firearms. And, uh, if you need any proof, you can go to london, where they're worried about knife fights.
▶ 1:01:37Uh, whereas we're still dealing with mass shootings as late as this week. >> uh, is the gun homicides, uh, higher in urban centers compared to other parts of the country? >> homicides are. But violence as a whole is still high, even in rural communities. Uh, we don't talk enough about suicide by firearm, uh, which also has a huge impact on rural america. >> Mr. Mr.
▶ 1:02:03Chairman, I would like to enter to the record this article entitled the highest rates of gun homicides are in rural counties. >> except. >> um. Mr. vladimir, what are the most common cyber security threats facing small businesses today? >> I see there's a lot of new threats. Ai.
▶ 1:02:30Ai has actually, uh, sort of up the whole problem. Um, it's made it easier and faster and more scalable for criminals to be effective. So when you think about probably the most prevalent problem is social engineering, things like phishing emails, scammy texts, um, uh, phone calls, malicious phone calls to your business, trying to trick employees into doing things they shouldn't do that, that create a vulnerability. Um, those things have just gotten ramped up.
▶ 1:02:56The volume and the quality because of ai is so much better than it used to be. I could have told you six months ago or a year ago that a phishing email would look kind of obvious. I'd tell you to look for, um, poor grammar or spelling or bad graphics, but ai has given the criminals the ability to make something that's indistinguishable from what's legitimate. I'd actually say that I think cyber criminals have adopted ai in their business, if you will, faster than small businesses have.
▶ 1:03:27>> and the sba used to have an online cybersecurity educational resource, but it was removed in 2018. Should we add one back? >> well, actually our link to our website, stay safe online.org is listed on the sba's website. When you look for their training, I think the most effective thing is public private partnership. So the training curriculum that we've already gone to the expense of creating, that's very, very effective.
▶ 1:03:56Um, you know, we we'd be more than happy to work in conjunction with the sba to deliver that to more small businesses. But. >> you know, we we know that cybersecurity attacks and crime is an issue that is impacting small businesses. It will take only one cybersecurity attack to a small business, and that could put them out of business.
▶ 1:04:20So given the fact that the mission of sba is to provide assistance and education capacity building to small businesses, don't you believe or don't you agree with me that having, um. An effective cybersecurity education at sba should be, you know, is something that is common sense?
▶ 1:04:49>> I think public private partnerships are the best way to to deliver that kind of training. So working together, um, between nonprofits and federal government, like, like we do today, I think is a really effective mechanism because we can be a little bit more nimble. We can bring things to market faster. Um, so I don't think they I think they should do it as.
▶ 1:05:09>> va has a network, uh, is partnering with a national network of more than 2000 small business development centers and other, uh, small business development, uh, organizations. So I don't see why it it they don't make it part of the mission of the sba so that, um, we've. >> held events with them in person at those centers. Yes.
▶ 1:05:41>> Mr. jackson, everytown research found. Oh, my time expired. I yield back. >> thank you. Ranking member. Um. >> I now recognize Mr. stauber from minnesota for five minutes. My favorite law enforcement officer on the hill. >> thank you, Mr. chair. You know, when crime increases, whether it's shoplifting, burglary, organized retail theft or vandalism, it's not just a statistic.
▶ 1:06:04Small business owners are left to wonder whether they'll make payroll after covering the cost of damages, whether foot traffic will slow because community members feel less safe walking around, or whether it's even worth their own safety to keep their doors open. We've heard the numbers across the country. 95% of small business retailers report that they have experienced theft, and most say it's getting worse. Nearly 80% of small business retailers report that their monthly losses from theft are between 500 and $2500 annually.
▶ 1:06:35As a as a former police officer who served my community for over two decades, I take this personally. When I talk to officers and small business owners. The story is the same as we heard in our crime hearing last congress. Policies from weak on crime. Cities and states are undercutting the people trying to do the right thing and tilting the field toward the repeat offenders. Mr.
▶ 1:06:56Wickham, from what you're hearing from small businesses across the country, how have soft on crime policies like cashless bail raised felony thresholds and lax prosecution changed their day to day reality? >> yeah. As I said earlier, we really look at this as a district or a jurisdiction by jurisdiction basis.
▶ 1:07:18And the criminal elements that we're dealing with are very sophisticated, and they are hitting the areas where they know they will not be prosecuted. So we've been working with individual units of government, whether it to be organized and coordinate.
▶ 1:07:36>> and then when they're not prosecuted, though, what does that do to the small business and the community when the when the owners know that they can still $300, because there are 300 or $450 worth of product and the $500 threshold is there, what does it do to the the small business owner? >> extremely demoralizing. The, uh, the lack of prosecution results in these repeat offenders that we hear about time and time again, whether it be Mr.
▶ 1:08:03Story being hit 35 times or big box retailers being hit 600 times, this is a message that gets out there amongst the criminal network. And we're working very hard to change the laws in all the states to allow for aggregation so that they're not allowed to, uh, hit these stores just below the felony limit and then do so on a reported basis.
▶ 1:08:31And we'd like to work with this committee to ensure that all the states allow for aggregation of prosecution. >> we just can't be soft on crime. Uh, if you if you steal $350 or $550, uh, you they have to be prosecuted and dealt with, uh, as you said, these, these criminals, they know, uh, if there's a if there's a small business that you can just steal from, we see it on a daily basis on the news across this nation.
▶ 1:09:01It is demoralizing and it affects people that want to go into retail business. Why would they want to go into retail business when they know they're going to lose a $2,500 a month? Sometimes that's what makes or breaks them to be able to stay in business. Uh, Mr. uh, kaleem, you talk about you talk about your coffee shop and you've. It's a third generation now in san francisco.
▶ 1:09:24I, I can't imagine what your grandfather and your father and what you are going through when you see, uh, this happening, and the officers are saying, my superiors just let it go. Let it go. It's got to be demoralizing it. Your customers see that? It's got to be devastating. Yeah, I would imagine that you would probably have more business when they know they're going in there and they're safe as customers.
▶ 1:09:48And you would probably be able to hire more workers when you know that it's safe and in your community that they prosecute. Yeah, even a cup of coffee, they prosecute. It's that broken windows theory, right? Yes. You prosecute the little things. Right. Um, tell us, tell us a little bit more, uh, what it's been like for you. >> thank you. Congressman. Well, you can thank prop 47 that was passed in 2014, where our threshold is $950. So you could steal anything. >> wait a minute. In california.
▶ 1:10:19>> yes, sir. >> your legislator, legislators said $950. >> yeah. >> and wait a minute. I gotta get this right. $950 in california. And you don't you don't get prosecuted unless it's above that. >> yes, sir. >> unbelievable. >> and we tried. We passed another prop, prop 37, which was a band aid to prop 47 that said, well, now you can do it twice, but after the third time, then we'll prosecute you. >> we cannot follow california in anything. This is just another example. Can you imagine? I was a small business owner for 31 years.
▶ 1:10:49We could never stand business. That's ridiculous. Yeah, I yield back. >> now. Recognize Mr. mcgarvey for kentucky for five minutes. >> thank you. >> Mr. chairman. I'd like to start by echoing the words of the chairman. And thank congresswoman nydia velazquez for her amazing service. Uh, luchadora has been a fighter for the people, for small businesses across this country and a historic tenure in congress.
▶ 1:11:19And we are all going to miss you incredibly. So I just want to start by by thanking you. And what will be the first of many times we thank you over the next year or so. Um, I want to get into cybersecurity and go into that a little bit right now. I was in a small business before coming to congress, where this is a real threat, and this is the kind of thing where, you know, people don't want to go through the trainings, but they got to go through the trainings because the emails are coming through.
▶ 1:11:44And if you're a small business, you cannot afford these types of attacks that are coming from people who are trying to extort you for money, their threat to everybody. But for small businesses who have limited resources, it is really and truly a problem. So you guys have highlighted that problem today. But I also want to say that because we're here in congress, a lot of the problems you guys are talking about, they are real problems. They're local problems. They're state problems and they're real. But here in congress, we got to think, what can we do for everybody across this country from the federal government?
▶ 1:12:12And one of the things we have had is a cybersecurity and infrastructure security agency known as cisa. Um, this has been an effective way of dealing with some of these cybersecurity threats and helping out our state and local partners. However, when president trump came into office, he has gutted the cybersecurity and infrastructure security agency. It's our premier cyber agency. It's enjoyed years of bipartisan support. But donald trump decided to tear it down. Now why did he decide to tear it down? He tore it down.
▶ 1:12:38Uh, because he doesn't like cisa director chris krebs for stating that the 2020 election was secure. That contradicts the president's lies about widespread fraud. Uh, but here's the thing that personal vendetta he's carrying out against cisa has real impacts. Because while now the agency in charge of combating cybersecurity is gone, the cybersecurity is more relevant than ever. Uh, and people are still our small businesses, our local governments, other entities are at great risk of exploitation.
▶ 1:13:06In kentucky alone, we've seen ransomware attacks against small businesses, county governments, local police departments, schools, universities, health care providers all happening real problems. These attacks, they leave us all vulnerable and we have to take that seriously, even if the president is not right now. So miss blake moore, on the national cyber security alliance's website, cisa is listed as a government partner. Can you tell us about how the cuts to the agency have been harmful to the efforts to keep small businesses cyber secure?
▶ 1:13:36>> our relationship is mainly with, um, external affairs in the public campaigns that we run. So I don't have firsthand knowledge of scissors work with small businesses. I know that all the resources that they provided in the past are still available. You can use templates to make your own tabletop exercise. There's, uh, fish simulation, the fishing simulation training available. Um, there's all the information that we work on together with external affairs at cisa to provide public education.
▶ 1:14:03Um, but I, I can't speak specifically to how they may or may not have helped small businesses in the past. I can say that when I talk to small businesses, you know, it's it's not really, um, the case. It's not really rational to think that the federal government or even federal law enforcement can help, can can provide hands on support when every small business has a security incident. Right? It just doesn't scale in that way.
▶ 1:14:28So that's why I think public private partnership and and the fact that this is a cybersecurity is a bipartisan issue, I think that's really, really important. I mean, we have been partnered with dhs before there was even a cisa for 22 years, and we're really proud of that partnership. >> and I think I think it is important. I think it's important we focus on cybersecurity, particularly in the federal government. Uh, there are crucial cybersecurity programs that are essential to this objective, like those of folks on cyber information sharing.
▶ 1:14:56But the federal provisions facilitating this lapsed at the end of september, which is why we should reauthorize this, which is why we should we should have this bipartisan thing. I want to change gears in the time I've got left, Mr. wickham, um, you're with the chamber of commerce and looking at the chamber of commerce and what you all said this year, the chamber of commerce estimates that, uh, the president's tariffs will impose a tax of slightly more than $200 billion on american small businesses this year.
▶ 1:15:19The chamber of commerce also found that in 2022, which is the year with the highest rate of reported retail crime, retail losses were organized. Retail crime significant driver amounted to $100 billion. Is $200 billion bigger or smaller than $100 billion? >> congressman, it's definitely. >> definitely bigger. Twice as big. And here's the thing. This is what we get at. This is important.
▶ 1:15:47So $100 billion there's cybersecurity is a big deal. We need to focus on crime for small businesses. But in this committee where there's $100 billion loss due to crime, there's a $200 billion loss, according to the chamber of commerce. Right now, to small businesses because of the president's tariff policies. And we have yet to have a single hearing on it or to address this and how it impacts small businesses. I think we need to focus on these types of things, as well as some of the local issues that we're that we're talking about today. Mr. chairman, I yield back. >> thank you. I recognize myself for five minutes.
▶ 1:16:16Uh, Mr. collegian, I'd like to start with you. Uh, did you come out here from san francisco? Is that where you said. >> yes, congressman? >> okay, well, thanks for coming out here to join us. Um, you, uh, you've you're a third generation business. Did your grandfather immigrate from armenia? >> lebanon, sir. >> from lebanon.
▶ 1:16:33And he started this business after immigrating here and started this coffee business, which has been in your family for three generations, except, I'm assuming at some point in time it was safe to operate and you were profitable and you had no problems finding employees. When did that stop? >> that's that's always been that's always been a challenge, ongoing challenge. >> but have you have you felt a lack of security and safety recently?
▶ 1:17:01Um, with the previous, uh, mayor in, in san francisco, is it starting to turn around with the new administration? >> yes, congressman. Actually, mayor lori, who was an heir of the levi's brand, has done a fantastic job so far. >> and why is she done a good job where the previous administration failed? >> well, he's a businessman. And his his number one point is the city of san francisco relies on small business. And he spends every single day walking the streets, talking to small business owners focused on security, crime and business.
▶ 1:17:32>> has there been a change in police presence? >> yes. >> and so since so the previous administration didn't do that. I'm I'm really wanting to know because I mean, san francisco in years. >> that was not that was not that was not the uh, the the tactical decisions by the previous administration. >> okay. So are your employees starting to feel safer in your city now or are we still having problems? >> we haven't had an issue at my store in the past four months, which is right around the time when.
▶ 1:18:03>> can you explain that? >> well, it's simple. You focus on preventing homelessness, crime, theft, and you focus on what small businesses need to survive. Do you have. >> a do you have a police officer that comes in and and frequents your your store for its fine coffee? >> so we, we, uh, we, we support the police officers often and we get fire fire department, the emt and the police officers coming in all the time. >> okay, so it's still a democrat administration, but a different, uh, law keeping and police enforcement philosophy.
▶ 1:18:33Correct? >> that's absolutely correct. >> okay. So it it is a nationwide problem based on policies, not which side of the aisle you happen to sit on, but recognizing as a small businessman, your new mayor says we're putting cops on the streets and protecting these small businesses because you can't hire anybody if they don't feel safe at work. If a homeless person is coming into your place spitting in your face and stealing money from the tip jar, people aren't going to work for you. >> not only are they not work for me, but customers will not come by either.
▶ 1:19:02So you get hit from both sides. >> and customers won't come in. Because if there's a if there's somebody who's mentally ill slash on drugs, which now the line is a lot blurrier, uh, especially in some of these cities that have been overrun by cheap drugs that, that are psychotics. Um, you're you're going to have a hard time continuing your business. So I hope that this new mayor continues those policies that that are not partizan. It's common sense. >> common.
▶ 1:19:29>> sense that you have to have a police presence in your city to prevent crime so businesses can thrive because businesses can't thrive if people aren't walking down the street, if there's needles and other stuff on the street, people aren't going to walk on them and you feel like the new, new mayor is doing a good job. >> he's doing a fantastic job. In fact, starting next year, he's implementing a new policy on the streets. If you are caught doing drugs, you have two choices. You either get arrested or you go to a clinic that's being built on sixth street in downtown san francisco. >> I'm glad to hear that.
▶ 1:19:58Okay, well, I hope your many years of success and thank you for coming down. >> thank you, >> congressman, by the way, before I go to miss pleasure, I'd like to address Mr. jackson. I'm glad you survived. I'm glad you're staying in your in your community and working to, uh, to make it make safer streets. And I just wanted to say thank you for being here, Mr. poggemeyer. Uh, as we talked to Mr. uh, the drip, drip, drip of having money stolen from the, the tip jar, things like that, that has a long term effect.
▶ 1:20:24But I'd like to also point out that miss velasquez mentioned in one fell swoop, a business can be completely destroyed, and nobody knows about it except the business owner. And people don't understand. Why did they go out of business? Uh, tell me the rate of increase that we're seeing in small businesses in the united states being cyber, having cyber attacks and just completely being put out of business, what's that look like? >> there's not really reliable data on how many businesses go because of the fact that you mentioned. Right. There's a lot of victim shame. Victim blame.
▶ 1:20:55Yeah. We don't always have reliable data. We know that when it comes to cyber crime and scams and fraud, only about 15% of entities report that to uh ic3 gov. The. >> so it's much worse than we even understand. >> probably worse than most. >> once they go out of business, there's no sense in reporting it. >> exactly. >> okay. Thank you very much. Uh, my time is expired. I now recognize miss golden from michigan for five minutes.
▶ 1:21:19>> thank you, sir, and thank you to our committee for having this important hearing today and all of our witnesses, uh, for for joining us to talk about, uh, this issue we take very seriously the impact that crime has on our small businesses across the country.
▶ 1:21:37But I do take issue with, uh, the chairman's statements that these are democratic policies, as we just heard from you, sir, democrats can institute policies that, uh, absolutely protect our businesses in even better ways.
▶ 1:21:50And currently, if we're going to have an honest hearing, we need to look at the ways that republican leadership has failed to fully fund law enforcement policies and has even further failed to hold criminals accountable. President trump has pardoned juan orlando hernandez, the former president of honduras, who was convicted by a federal court for drug trafficking and weapons charges.
▶ 1:22:20Virtually flooding our streets with illegal drugs and guns. The number one killer of pregnant women. Thank you for pointing that out, sir. Mr. hernandez once boasted that he would, quote, stuff the drugs up the gringos noses, end quote. How does this make us more safe as a community? Let's look at what our republican president is doing or not doing to keep our streets safe.
▶ 1:22:47Earlier this year, republicans introduced an appropriations bill that would slash billions of dollars from public safety funds. The trump administration slashed millions in grant awards. 88 million.
▶ 1:23:04I want to read this because this is so important 88 million in grant awards for substance abuse treatment, mental health services and programs that team with police and with health professionals to help divert crime programs that you're talking about here that directly impacted your small business. If we're going to have a serious hearing about this, let's have a serious hearing about this and talk about where the policies are doing the most good work to keep our small businesses safe. Mr.
▶ 1:23:34Jackson, my first question is for you. How does the availability of guns in the streets escalate otherwise? Nonviolent incidents in inside retail spaces like disputes, shoplifting, encounters, or customer conflicts? >> yes, I shared earlier, it turns any situation into a near fatal one.
▶ 1:23:56Uh, and I know we have a few members of law enforcement who are here earlier, but, uh, the presence of a firearm also makes it dangerous for our law enforcement officials. And that's why states like florida push forward the first ever red flag law to state level, to disarm those folks who are in a moment of crisis. And we know that republicans have fought for this. Law enforcement has fought for this. Uh, but many leaders on both sides of the aisle have fought to keep guns out of the hands of those who are in that moment of crisis before that conflict happens.
▶ 1:24:25That makes it dangerous for everyone present. >> absolutely. I couldn't agree more. And we're so glad that you survived, uh, to continue to to do the advocacy that you do. Um, gun safety remains a top issue in my district. In kent county alone, 14.2% of all fatal injuries are gun related. Um, it comes as no surprise that the great threat of gun violence has a huge threat on, uh, residents and small businesses alike.
▶ 1:24:51Um, I'm glad that that is such an important part of the conversation today. Um, I want to switch gears, uh, as well and turn to miss a second. My next question is for you. Um, your organization's 2025 2026 cybersecurity attitudes and behaviors report found that 52% of employed participants have never received training on the security or privacy risks of artificial intelligence tools. It's just astounding.
▶ 1:25:18My bill, the ai act, would help to educate small business owners on those risks. I'm so proud of the bipartisan support that bill has received in this committee. Can you explain why an ai user should be knowledgeable on the risks of ai? >> yeah, because it's not just about what you're getting back, the results you're getting from whatever ai tool you're using.
▶ 1:25:41We're really focused on the work that we're using it to do, or the information that we're using it to find, and we forget that it's not google what we're putting in there. We are giving away to the world literally. So if you look at this year's report, you'll also see, we asked people, uh, how many people are actually giving away company information to ai. Um, it's a pretty high percentage. It's up from last year. And then this year we asked them, just what is it that you're sharing with an ai tool that you probably shouldn't be? It's confidential business plans.
▶ 1:26:12It's customer information. It's, uh, you know, things like that that your company has produced, that your developers have produced. Um, it's information that really shouldn't be public. >> thank you. I yield back. >> gentlelady yields back. I now recognize Mr. downing from the great state of montana for five minutes. >> thank you. >> Mr. chairman. And thank you to the witnesses for being here. Preserving law and order is a fundamental component of fostering a secure environment for small businesses and entrepreneurship to thrive.
▶ 1:26:41Uh, businesses depend on the protection of property, employees and customers in order to be profitable and to attract investment. Unfortunately, in cities across the united states like washington dc, chicago, saint louis, the embrace of radical pro-crime policies like cashless bail, uh, limitations on police restrictions on self defense have empowered criminals and victimized innocent citizens and businesses.
▶ 1:27:10I'm going to start with Mr. wickham. In your testimony, you highlight how small businesses have faced the brunt of rising property and retail crime in the last few years. Can you expand? Excuse me, can you expand on what government policies you believe have contributed most to the forms of crime that most commonly victimize small businesses? >> yes, congressman, when we talk. >> microphone, please. >> uh, yes.
▶ 1:27:35When, uh, congressman, we talk to our small businesses, the issue that they are most concerned about is, uh, lack of law enforcement funding and prioritization. The second is, uh, decreased prosecution policies hitting it both at the initial reporting of the crime.
▶ 1:27:57We have a statistics from our friends at the national retail federation that 64% of businesses reported less than half of the crime incidents in, in their stores. And the reason most cited was lack of law enforcement support.
▶ 1:28:16So the other hand, you have members who are very concerned about repeat offenders, where prosecution policies, because the laws are not updated to allow for aggregation of effects. The sophisticated criminals are hitting the same, uh, organizations, hitting the same businesses over and over again. >> so how has this, uh, this crime within these neighborhoods, how has this impacted the ability of entrepreneurs to attract investment?
▶ 1:28:45>> oh, it's it's, uh, fundamental, um, one of our strongest chambers is in the state of missouri. And they were so concerned about crime that they took the rare step for a chamber of commerce, of surveying their members about crime. And they found that 90% of their ceos were concerned about public safety, but 70% of them saw it as a factor for the state's competitiveness.
▶ 1:29:14Thank you that you cannot draw businesses to your area if there is a public safety concern. >> I appreciate your responses there. I'm going to move on a little here. Um, I want to transition to discussing cybersecurity threats that plague small businesses, particularly particularly given the the rising impact of artificial intelligence. I'm going to move to miss meyer and your testimony. You alarmingly emphasized that cyber criminals have adopted ai faster than most small businesses.
▶ 1:29:42So what new capabilities has ai unlocked for cyber criminals and targeting small businesses? >> um, you don't need, uh, a bunch of criminals with devices all launching attacks. Um, you can use a bunch of devices in one person with ai launching attacks at scale. Um, it's, you know, you have the scam centers around the globe where people have been human trafficked into these, uh, scam centers, mainly in, in asia.
▶ 1:30:09There's hundreds of thousands of people in these scam centers, and they aren't just perpetrating crimes like pig butchering on individual citizens. They're also perpetrating crimes on small businesses. I mean, at the end of the day, we're all individuals and we're all targeted, whether we work at a large enterprise or we work at a at a small business. So, um, they're using a lot of automation to conduct those crimes. That a way that really, really scales for them. >> right? No, I appreciate that.
▶ 1:30:35You know, as a former securities regulator and dealing with things like, you know, pig butchering and some of these, uh, you know, use of these tools for defrauding people is really, really pretty alarming. Um, so how does a lack of knowledge about these cyber threats prevent small business owners from implementing adequate cyber security measures? >> our belief is that they just don't understand enough about basic it hygiene.
▶ 1:30:56Um, some of the things that I listed in my in my written statement, um, it's that lack of knowledge, that lack of education, some of those myths I mentioned where they, you know, oh my it guy has it handled or my managed services provider has it handled. And they don't know enough about the risk to manage the risk. So they don't know, uh, what questions should they ask when they hire an it person or a managed services provider? How do they hold that person accountable?
▶ 1:31:24What sort of data and reporting should they be looking for to say that we're actually, um, decreasing the risk to the business? So that's where we come in with small business education. In layman's terms, there's a lot of tech speak, there's a lot of jargon out there. And we try to cut through all that so that the the business owner understands how to manage it. >> right. I appreciate that, unfortunately, I've run out of time. I just want to acknowledge that, uh, the air act that I'm co-leading with, uh, representative skelton is trying to at least attack a part of that. But I, I thank you for that time.
▶ 1:31:54And with that, Mr. chair, I yield back. >> gentleman yields back. I now recognize miss mckeever from the great state of new jersey for five minutes. >> thank you, chairman and ranking member, for holding this hearing today. And thank you to our witnesses for joining us. America's small businesses are the backbone of our communities, the first employers for millions of families and the anchors of local economic life. I think we can all agree crime holds businesses back from reaching their full potential for their communities they serve.
▶ 1:32:20It makes it harder for business, for business owners and workers to keep their families fed and bills paid. Protecting and supporting small businesses is the only way for our economy to prosper. On top of everything, small business owners open their doors every morning morning, only to be hit from every direction. In this trump era, in spite of backward republican proposals that worsen crime, we have seen historic drops in crime over the last few years.
▶ 1:32:49But we can still do better, and we can reduce crime in ways that are smart and empathetic. Our focus must remain on advancing evidence based policies that foster real stability for our small businesses. Policies like those implemented in newark, new jersey, my home city, and our great congressional district ten. We are very proud to be charting a pathway forward that uses community based, holistic methods to reduce crime by embracing a public health approach.
▶ 1:33:17Newark has been. Newark has seen a violent crime drop over 50% in the last decade, and in 2024 saw the lowest rate of homicides in 60 years. This success is a testament to how we empower our community community to be co-producers of public safety, instead of outdated policies that do nothing more than lock people away and ignore the real cause. With that, I want to go to Mr. jackson. Um, Mr.
▶ 1:33:47Jackson, first of all, I want to thank you for being here, and I want to thank you for sharing your story and for all of the advocacy work that you have done, um, over your time, not just here in dc, but across the country. It's a great to see you again and thank you for being here. It's unfortunate that you have to be here and watch my colleagues across the aisle talk out of both sides of their mouths.
▶ 1:34:08Um, this morning while we talk about small businesses, um, you know, seeing an increase in attacks from, you know, violence, we also see that they have reduced so much in anti-violence funding from closing down and shutting down the office of gun violence prevention, all of these things that we constantly see happening. But yet they are concerned about law enforcement and concerned about crime in our communities.
▶ 1:34:33I find it, you know, baffling to hear that, um, small businesses often note that crime around their storefronts is tied to broader challenges, especially in urban communities, for example, lack of youth engagement, mental health supports, and neighborhood instability. Based on your experience, how do investments in these preventative services, such as job training and therapy, improve safety outcomes and reduce risk and operating costs for the small businesses located there?
▶ 1:35:03>> well, we we, uh, in the last two years, 2023 and 2024, we saw a 31% reduction in homicides. Uh, and this year we're on pace for another 18% reduction, which means we've cut the crisis of gun violence and gun related homicides in half. Um, due to these investments and investing in mental health, where the bipartisan safer communities act put us at the gold standard for youth mental health, investing in community violence intervention, investing in law enforcement, investing in victim services. We added $2 billion in victim services.
▶ 1:35:31And all of that helps prevent violence before it happens, prevent violent crime before it happens, as well as when you couple that with holding gun dealers and the gun industry accountable. Um, from from putting guns into communities or into the hands of those who are most at risk. But right now, as you shared, it's all under siege. Um, $820 million in grants were canceled, 373 awards in the department of justice alone.
▶ 1:35:55Uh, that included $3.5 million from project safe neighborhoods, a law enforcement program created under the president bush administration. Uh, there was significant cuts for police training. There was even a $13 million cut to the rural violent crime reduction initiative. And so we're watching all the infrastructure that was put in place that has seen historic results three years in a row, uh, being dismantled, defunded and destroyed.
▶ 1:36:19And luckily, we have states like new jersey that have their own office of violence prevention that are investing at the state level to offset these slashes. Um, but we're seeing so many states and cities, uh, really suffer, um, in this infrastructure being destroyed. >> yes. Thank you so much for sharing that. Um, once again, you know, across the aisle, my colleagues, rather, it's a woman or a man always lying. But one thing that doesn't lie is the number and the data. Thank you for sharing. With that, I yield back. >> the. >> gentlelady yields back.
▶ 1:36:49I now recognize Mr. musser from the great state of pennsylvania for five minutes. >> thank you, Mr. chairman. Thank you very much. To our witnesses. Um, a very important subject. Uh, that's why we're happy to be on this committee and have you here testifying. So we just heard my colleague talk about data and facts and truth. Um, you know, if it weren't for the amount of stress small businesses would have if we did not pass, uh, the one big, beautiful bill as it's known.
▶ 1:37:18199 a, it's a 20% tax increase on small business bonus depreciation, r&d tax credit, no tax on tips, tax on overtime, income tax reductions, energy costs have come down. Regulations are minimizing. Inflation is far lower than it was before. Uh and now we're talking about crime. These are all things that republicans voted for. And democrats facts and data voted against.
▶ 1:37:43I mean, almost 100% of them, if not 100% crime. You know, I'm from pennsylvania, philadelphia. We have a district attorney up there that thinks it's a wonderful idea never to prosecute, uh, those who commit, uh, gun, um, illegal gun carrying crimes. Now, somebody wants to blame it on guns. Uh, it's clear that when you when you, uh, prosecute less than 30%. It used to be 70% just a few years ago in philadelphia.
▶ 1:38:14Our crime is is over the top. Chicago, new york, detroit. Uh, charlotte, uh, crime is san francisco. Okay? The crime levels are not, in some cases, simply not being reported as they're not in philadelphia. Yet. You do know homicides, homicides are are almost as high on on a population basis as chicago. And, you know, it's even worse.
▶ 1:38:38I looked up what were the worst cities in the world on a per capita basis for murders? You know what's behind chicago and philadelphia? Nairobi. And they have something there where they're out killing women for some crazy reason. Okay, this the united states. And so we've got a big problem. And this is just one of the problems, I think, facing a small business. And if we ignore it and act like money will save everything, that's never going to get us there.
▶ 1:39:07Uh, frankly, I mean, it's unbelievable. I mean, they want to double down on every mistake being made, um, with, with with more cash. So, uh, Mr. wickham, let me just start with you. What are you what do you say about this? You started saying how when gun violence is not being, uh, people using guns is not being prosecuted. I mean, what what sort of effect is that on small business these days?
▶ 1:39:32>> it really sets up a challenging environment for all businesses and communities where there is no consequence for criminal activity. And when a store is hit repeatedly, the first thing they're going to have to do is look at raising prices and eventually closing their doors. And we have a saying at the us chamber, no business should have to close because of crime.
▶ 1:39:59>> and what about the fact that people don't want to come downtown when the scene riots and problems and, and, uh, all kinds of anti-police. They say we're not funding the police. What about in the streets? Well, I you know, I don't want to get political here, but when was the last time we saw anybody in democrat democrat party denounce the protesting that's existing in front of all of these stores? Is that a problem, too? Is that less traffic?
▶ 1:40:22>> there's no there's no challenging the fact that when you have, uh, high crime rates in that area, it is extremely destabilizing to business. >> my little town of wilkes-barre, right outside. But inside my district, people aren't showing up. Um, um, uh, miss. Sorry. If you could elaborate on cyber. Let's, let's let's veer a little bit here, miss meier. Um, what what are small businesses? I know some companies that have been hit by cyber.
▶ 1:40:52Um, don't report it. Call me and ask, what? What should we do? That sort of thing. Um, what are the avenues that you can tell us that we need to accentuate? So small business, medium sized business, even large business can find answers if they feel they're under cyber threat. >> we have a lot of answers on stay safe online. Org. Um, we have a lot of educational materials that are free. We're a nonprofit.
▶ 1:41:16Um, I think the what we need are more points of leverage to get businesses to be proactive, right? Um, I mean, cybersecurity people like to say there's two kinds of businesses. There's the ones that have had a security incident and the ones that have had one, they just don't know it yet. So it's it's really about, um, getting people to engage sooner before something catastrophic happens that puts them out of business. And that's really the problem that we see is getting their attention. They're very, very busy places.
▶ 1:41:45So finding those points of leverage, we've tried to work with franchisers to get franchisees to take training. We've had programs in the past with the sba, and we'll continue those. Um, it's just it's finding more and more ways to connect. >> I'm out of time. If you could provide us just some of that information, I would appreciate it. And maybe in your, uh, in your comments. And, Mr. john, I hope you get a chance to express, uh, your situation and all. And sorry I missed it earlier. I yield back, Mr. chairman. >> gentleman yields back. I now recognize Mr.
▶ 1:42:14Tran from the great state of california for five minutes. >> thank you, Mr. chairman. And thank you to the ranking member and yourself for convening today's hearing. Uh, thank you to all the witnesses who traveled here. I want to address my colleague's comment. Sliding my state. I am proud to represent california, the fourth largest economy in the world, with 4.2 small businesses representing 99.9% of all businesses in the state.
▶ 1:42:39Let me just say that california farmers, farmers, many of them small businesses, supply 62% of the country's fruit and nuts and 50%, 56% of the vegetables to feed our country. California continues to be instrumental in the success of this nation economically. Period. Mr. jackson jr, thank you for being so open and vulnerable about your experience as a gun violence survivor.
▶ 1:43:02According to the trump administration, fiscal year 26 budget requests, they are proposing to cut 1 billion in funding across 40 department of justice programs, supporting police departments that directly impacts enforcement and violent crime, hate crimes and drug crimes.
▶ 1:43:21The trump administration has also requested 550 545 million in cuts from the fbi, 468 million from the atf, and 212 million from the dea, which would limit the federal government's ability to fight major crime and combat international drug trafficking. The chairman's sentiment about small businesses not reporting crimes because of lack of resources to address these crimes is absolutely true.
▶ 1:43:44As a small business owner, my wife and I saw multiple break ins last year, and there's just not enough resources to help us and other small businesses with these attacks. And that's why I'm concerned about these cuts. Administration is directly and indirectly making to local and federal law enforcement. What are your thoughts on those cuts, and how would those funding cuts impact america's public safety and small businesses? >> yeah, again, I want to echo what you're sharing is that we have solutions that work.
▶ 1:44:10And we know that investing, especially in federal law enforcement, has seen significant results. Uh, in the last two years, we were able to prosecute over 600 gun traffickers. We shut down over 200 gun stores that were violating the law. Uh, and we even shut down 350 websites that were illegally selling machine gun conversion devices. And all of that has helped us get this reduction of 13% violent crime and 31% homicides.
▶ 1:44:35Uh, but as opposed to being applauded for that and building up the atf, uh, as you shared, there's been a 30% cut to that with over $460 million being cut. Uh, and that is not the approach that we need. If we truly care about investing in law enforcement and keeping our small businesses safe. Uh, and we are also seeing to build on your point, the cities and states that are investing are seeing results. Uh, philadelphia, as he shared earlier, they're down 17.5% in homicides this year. Um, california is down 9.5%.
▶ 1:45:05Violent crime and property crimes are down 15.4% in california. And so we are seeing that states and cities that lean in and invest in law enforcement and community based strategies and violence prevention efforts are seeing tremendous results, historic results, if you will. >> thank you for that. Mr. jackson jr, as you know, the trump administration is aggressively ramping up immigration enforcement across the nation in an effort to fulfill his campaign promise of mass deportation.
▶ 1:45:30He has terrorized immigrant communities across the nation, including in my home district spanning both la and orange county. The white house has also diverted a considerable number of federal agents from their jobs, preventing serious crimes and jeopardizing important public safety initiatives, including protecting american families from gun crime to patrol the streets of major cities.
▶ 1:45:50And according to a report published by the cato institute, ice has diverted more than 28,000 federal law enforcement agents from their jobs of investigating and preventing serious crimes to now conducting civil immigration operations. Furthermore, reporting suggests that atf has reassigned 80% of its special agents to immigration enforcement. Likewise, the fbi has had 23% of agents allocated to focus on immigration enforcement.
▶ 1:46:19How effective is that diversion in fighting and preventing violent crime? >> uh, it's it's ineffective. Uh, it's dangerous. And frankly, it's it's a huge waste of resources. I mean, the opportunity cost is major. When you, uh, deplete a workforce that's already very small, that's inspecting, uh, gun dealerships that are trying to break down black market rings of firearm sales.
▶ 1:46:42And we know that illegally sold guns are the fastest guns to arrive on the crime scene, whether it's a homicide or other forms of crime. And so to dismantle and pretty much shut down the atf, uh, leave cities and states really vulnerable, um, to guns illegally flowing into their communities and frankly, getting to the hands of those who have the mindset of committing crime. >> thank you. With that, chairman, I yield back. >> gentleman yields back. I now recognize Mr. rob bresnahan from the great state of pennsylvania for five minutes.
▶ 1:47:13>> thank you. >> Mr. chairman. And to the ranking member and thank you to our witnesses for being here today. Uh, although I've had, uh, I have to say, I'm disappointed that we must actually have a hearing on this topic at all. Um, but as we've heard today, american small businesses are increasingly forced to factor in safety measures into their business plans to guard against shoplifting and retail theft, on top of managing inventory, supply chains and staffing needs. Pennsylvania knows this reality all too well.
▶ 1:47:41Our commonwealth ranks fifth in the nation for retail crime and suffers the highest total value of stolen goods in the country, averaging $430 per resident. This is unacceptable and preventable. Retail crime threatens the very existence of mom and pop shops in northeastern pennsylvania. These businesses simply cannot budget for loss or absorb the hit of merchandise walking out the door.
▶ 1:48:03Supermarkets with ten locations across northeastern pennsylvania from clarks summit to west pittston, reported loss of theft can reach over $2 million a year. As members of the small business committee, we have a responsibility to focus on policies that help our small, local businesses stay open and stay safe. My first question, Mr.
▶ 1:48:21Wickham, can you explain or expand more on the impact of retail theft and crime on the people that experience it firsthand, small business owners and their employees, as well as the broader community, uh, and the neighborhoods these businesses operate in? >> yes.
▶ 1:48:36Time after time, stories like our colleague greg's, uh, are brought to the us chamber, whereby there has been an incident that, uh, causes employees to want to leave, uh, causes shoppers to not want to come to, uh, that business. And then eventually, that business has to close its doors. And that has a profound impact on the community.
▶ 1:49:06And we encourage those small businesses in the area to coordinate, to try to take preventative attitude towards stemming some of these things, because it is so systemic. It's not just the small business down the block, it's the whole block. When there is an incident. >> has there been any case studies or suggestions?
▶ 1:49:34Congressman musser referenced wilkes-barre. Um, and we have cities like scranton and stroudsburg and hazleton that we have big city problems right in our own backyard. Uh, we have five interstate highway systems that interconnect to within northeastern pennsylvania. But is there anything specific that you can point to within the community culture that you found to be successful in mitigating some of these ramifications? >> yes.
▶ 1:49:59The most successful, um, cooperation I've seen is when the prosecutors, law enforcement and the business community get together in an organized fashion. We refer to them shorthand as orcas.
▶ 1:50:16Organized retail crime associations because the sharing of information is so important, and it is so challenging for small businesses that don't have a large umbrella corporate office to unite their resources.
▶ 1:50:30So it's very important for the small businesses to work together with prosecutors, with law enforcement and with policy makers, and to commend your state, the pennsylvania chamber of commerce supported the state law to set up an organized retail crime office within the attorney general's office.
▶ 1:50:52And just in just over a year, they've, uh, they've opened over 65 investigations, made more than 40 arrests and recovered nearly $2 million in stolen goods, uniting those rural communities, those small and mid-sized communities you're talking about. And some of the larger urban centers. >> well, it's nice to know that the, uh, with the attorney general, dave sunday, that there's been an initiative there.
▶ 1:51:22Um, in my last life, I was a real estate developer, and we made investments into downtown pittston and getting to work with the entrepreneur. And, you know, just seeing the struggles in which they go through every single day. On making sure that their stores are staffed and, you know, they can keep up with inventory and process, you know, various different surges, uh, whether that's a brewery, black hat brewing or, you know, grayson park or, you know, a hair salon, they're all dealing with the with the same reality.
▶ 1:51:47Um, but I think it's important that you have to have that cultural impact. And I think you phrased it very eloquently about having the culture of the community come together to repeal or repel, um, some of the crime. Also, what's unfortunate is when you have a detective in the scranton police department that gets shot in the head, thank goodness he made a great recovery, but it's still detriment, detrimental to the success of a community. So I seem to be out of time. I yield, I yield back. >> gentleman yields back.
▶ 1:52:15I now recognize miss simon from the great state of california for five minutes. >> thank you, Mr. chairman. >> and thank you to our ranking member, Mr. jackson, just briefly, um, thank you so much for being here. And I followed the work of the office, um, prior to the betrayal of this administration and shutting it down. What I thought was so interesting about the office is that the, uh, the initiating group that brought the office of violence prevention together. Uh, is this correct? Was faith leaders, faith leaders from all over the country?
▶ 1:52:44Thank you, thank you, and thank you for your work. Uh, my next question is from my bay area brother. Uh, you're in the sunset. My mama lives in the sunset, and I believe I know where your coffee shop is. And just really thank you for traveling. It is a long flight. I take it every week. And we're just honored and happy to have you here. Um, just a couple of questions. Uh, that may seem a little off topic, but I believe that they'll they'll come together.
▶ 1:53:13Do your employees, sir, at the coffee shop have health insurance? >> yes. >> and are you aware that the proposed cuts to the affordable care act and small business tax credits would make it harder for small business owners like yourself to provide health coverage to your employees? >> yes. >> thank you sir. You also told the chronicle and I read the article and I agree with you.
▶ 1:53:37I read the article about five times in the last couple of days, since I knew that you were coming out of deep respect. I agree with everything that you said in that article, but I want to be clear that I think it's going to get worse while you have a mayor. In fact, Mr. lurie is actually not a businessman. He led the tipping point foundation, and I was on his board for eight years and really loved the work that they were doing at tipping point to combat poverty in some of these root causes.
▶ 1:54:03And I agree with your assessment that his being on the streets every day, working with small businesses, asking the questions about root causes, it works. So I'm really excited that you're in communication with the administration. But this administration is cutting $1.7 billion from mental health services that go into states, then counties and in cities. And in fact, he's fired half of the mental health staff from samhsa, which is just shocking.
▶ 1:54:34So my question is simple how do we solve the mental health crises that you clearly and beautifully articulated in your chronicle article, mental health crises that are driving small crime, which feels like big crime.
▶ 1:54:48If you're running a small business in our communities when this administration is defunding mental health in real time, if you think it was bad last year, can you imagine counties like san francisco, way to louisiana, denver, you name it, they're going to see their mental health grants slashed. How do we support small businesses while stripping away your ability to one.
▶ 1:55:14Keep your employees safe, insured, and the folks who are causing the issues outside of your business, they will receive a deeper cut to the small services that they already receive in their struggle for mental health. Would love to hear your thoughts on that. >> yeah, my thought is, I mean, congressman mentioned that california is the fourth largest economy in the world. We are a big company. We are a big country. We can figure it out.
▶ 1:55:42And I think california should be able to solve for that. One example would, would we could stop funding the train to nowhere that we've been spending $5 million per mile to build that hasn't been built for ten years. So that that would be one example that I would give. >> I thank you so much.
▶ 1:55:57And I would, with my just brief time left, want to bring it home that we have a federal government that has been explicit about defunding mental health services that reach our cities in real time. So in san francisco, in oakland, where I represent, should a police officer take a mentally ill person into custody?
▶ 1:56:24We know now that there are so few beds, and with the cuts to mental health that are coming in real time, there will be fewer beds and fewer services. Now, train and infrastructure. Those are very different parts of our federal and local budgets.
▶ 1:56:39But health and human services, when those real cuts hit our streets, I would hope that this committee, we find it in our hearts to figure out how to push sba, push other parts of our federal government to fund real opportunities for our small business owners to keep their storefronts safe, to provide opportunities for our local and regional and state and federal law enforcement
▶ 1:57:10Officers, to actually have places to send folks in their midst of crisis. And again, I want to thank you for being here, and I appreciate your advocacy. Thank you so much. And I'll yield back. >> gentlelady yields back. I now recognize Mr. weed from the great state of wisconsin for five minutes. >> thank you, Mr. chairman. You know, it doesn't matter if your business is in green bay or new york city, appleton or washington, D.C. retail crime negatively and disproportionately impacts small businesses across the united states.
▶ 1:57:37As a former small business owner, I know firsthand how detrimental crime is for small businesses. A 2024 study found that almost 80% of small businesses reported the annual cost of theft to be between 500 and $2500 per year. While this may not seem like a lot to some businesses already operating on thin margins have a hard time recovering from these losses, and it could be the difference between ending the month in the black or ending the month in the red.
▶ 1:58:09Retail crime is not the only way crime impacts small businesses in blue democrat cities, where police are prohibited from enforcing the law and district attorneys refuse to prosecute crimes. People don't feel safe shopping. They don't feel safe going out to eat or even going for a walk in the local park. Next time you're in a city like chicago or san francisco, just walk down the street. What used to be a bustling area filled with local businesses are now boarded up and abandoned.
▶ 1:58:39This is a direct result of democrats doubling down on their failed soft on crime policies, such as reducing penalties for retail theft and cashless bail, which allows criminals to return to the street before the arresting officer has finished their shift. These policies not only hurt the small businesses, but their customers and their staff as well, Mr.
▶ 1:59:03I always enjoy hearing directly from small businesses. And you you've obviously carried on the legacy that you talk about your dad and some of his advice, and I love hearing that. Um, you know, your father always taught you that incentives drive behavior, and that couldn't be more true. Show me the incentive and I'll show you the outcome. And right now, our incentives tell people that crime pays and accountability doesn't.
▶ 1:59:31But I'd like to to to hear from you here today. Uh, as a small business owner, you've faced the onslaught of theft from a repeat offender, and I did as well. Uh, what impact have you seen on people willing to come into your store based on your experiences? >> you know, that specifically hasn't been as big because we do have. >> a really, really tight community.
▶ 1:59:54But what the impact has done more on me and my staff feeling helpless, feeling unsafe and sad, you know, the conversations instead of being, you know, it was busy today or, you know, that customer came by and said hi. It was more of conversations like, stanley came in again. This time he, you know, dropped the the tip jar. We gotta replace those kinds of negative comments was impacting my retail side of the business as opposed to the customers because they were supporting us throughout it.
▶ 2:00:23>> so you you have a good network of other business owners. I mean, how tell us about your friends and business that are around you. >> yeah, I mean, the example we talk about is. >> it only impacts small businesses. You know, it impacts large businesses too. We had a walgreens pharmacy down the street. The employees would come to our shop every day to grab a cup of coffee, and we would ask them and we would talk about how bad it was. Well, that guess what? That pharmacy is now closed because people were just coming in and stealing under 950 bucks every single day.
▶ 2:00:52And even a big business like walgreens can't afford it. And it's the only pharmacy in like a two mile radius. So now that community has also lost a place to go get prescriptions. >> so you talk about this, something congress can do is which is shining a spotlight on the problem. I think we have to admit there's a problem. Yeah. And I think people need to all admit there's a problem. And which until you admit it, how do you find a solution? But you talk about the heart of the problem is policy failures. And locally, local prosecutors.
▶ 2:01:20And you talk about being constrained. They are constrained by political choices rather than pursuing these cases. Can you explain locally how that has impacted you? The local. >> yeah, I mean. >> I mentioned this earlier on prop 47, which was passed in 2014, which took, you know, a petty craft, petty theft down to a a nothing burger.
▶ 2:01:42And so that policy granted, it started in 2014 when covid hit, everybody started to move away from the downtown into other neighborhoods where we are. And now it's a free for all. I mean, you're literally passing a bill that says you can steal up to 950 bucks and you won't get arrested. What's going to happen? What's the incentive?
▶ 2:02:05And then we pass prop 37 last year, which was a band-aid to it, that said, well, now you can steal two more times, but after that, then we'll might arrest you as opposed to just getting rid of prop 47 altogether. >> well, thank you. And thank you for being a small business owner and continuing on the legacy that your, you know, your family has done. And thank you, congressman. Really appreciate that. You're the heart of america. Thank you gentlemen. >> I yield back. I now recognize mitchell from the great state of maryland for five minutes.
▶ 2:02:35>> thank you very much, Mr. chairman. And to our ranking member and of course, to our witnesses. I appreciate the opportunity to discuss the impact of crime on small business across our country today. And it is true, uh, surges in retail and cybercrime put both our nation's employers and our consumers at risk. We in congress should be doing all that we can to stop crime.
▶ 2:02:56It's an issue that I was passionate about when I was baltimore county executive, before I came here to congress, where we made combating crime central to helping small businesses grow and thrive. And in stark contrast to some of the hyperbolic defund the police rhetoric I've heard earlier today, I was a democrat, one of many over the past years, who invested in new and smart policing tactics.
▶ 2:03:21I spent tens of millions of dollars in new local resources to support our police department and public safety generally. But I also made investments in prevention because I know that we can be both tough on crime, not only by holding people accountable and we should for their actions, but also by making those upstream investments to prevent crime from happening in the first place.
▶ 2:03:45Our efforts were strengthened by smart and efficient federal funding, made possible by laws like the american rescue act and the bipartisan safer communities act, which granted billions of dollars to states and cities for public safety and violence prevention initiatives through a $12.7 million grant from the cdc, baltimore county's department of health and social services and the fire department deployed peer outreach specialists and ems clinicians trained specifically for peer outreach for non-fatal
▶ 2:04:15Overdose victims and their families, reducing the downstream impact of substance abuse on our communities and our commercial users. Just yesterday, I heard from our county that they don't readily know what the administration's cuts are to that grant, or what the subsequent impacts will be to that program. This is a program that led to a decrease in fatal overdoses by more than 40% in 2025, non-fatal overdoses, down almost 25%, and fentanyl related deaths down near 50%.
▶ 2:04:42We sent corporals to the fbi on the cyber task force to learn about how we can do more to fight cyber crime. We work directly with businesses and owners with programs like roca, an organization that engages both young people and police officers to heal trauma and drive change. And through federal grants, we installed enhanced lighting camera systems, and we also deployed more license plate readers, expanding our mobile crisis units. And we put a 901 clinician in our call center.
▶ 2:05:13We put the resources where there was greatest need and we saw significant impact. But again, these results were possible because of that strong collaboration among federal, state and local leaders. Unfortunately, as you've heard today, the trump administration is now handicapping public safety by cutting and laying off people. States are now dealing with a collective $500 million in revoked balances from 373 grants, undermining the very programs that keep our communities and businesses safe. And yet, not a peep.
▶ 2:05:42Not a peep from the other side of the aisle. So I look forward to working with this committee to draft and uplift legislation that strengthens america's small businesses on this and many other issues. I hope to get to two quick questions, Mr. chairman. First is to Mr. jackson, uh, the city of baltimore, which you referenced, which I'm proud to now represent in congress, um, has also experienced a significant decrease in homicides, on track to have the lowest homicide rate in 50 years.
▶ 2:06:10We have to keep doing more, but we're proud of that progress. They were recently awarded $62 million after a jury ruled in their favor against the hanover based firearm shop for selling untraceable ghost guns. Still, sales have increased exponentially in recent years. How has the federal government acted to reduce the spread of ghost guns, in your opinion? >> yeah. >> historically, uh, especially during the biden-harris administration, that was a top priority to crack down on ghost guns. Uh, there were multiple executive actions moved forward.
▶ 2:06:40Uh, and frankly, the the largest manufacturer of ghost guns, polymer 80, uh, was shut down after we made changes that required them to go through licensing and background checks just like any other gun dealer. Uh, so it's a huge priority. And we also know that ghost guns are leading to a lot, of lot of death and harm across our country. And lastly, I just want to congratulate you in baltimore. I mean, you all are seeing a 33% reduction in homicides this year and literally are turning baltimore into one of the safest cities in the country. So congrats. >> thank you.
▶ 2:07:09A lot of credit to the mayor and the partnership we had, and we're hopeful we can get back to that. Uh, lastly, quickly, with my 20s left, uh, miss, uh, meyer, I apologize. I get my name mixed up too. Um, with ai being such an important part of cybercrime, would you agree that we should be wary about efforts that lead to, um, blanket restrictions on the regulation of ai as it drives and fuels these cyber crimes? >> yeah, I'd agree with that.
▶ 2:07:34I mean, ai has just been, um, has poured fuel on the fire of cybercrime. >> okay. Thank you very much. Appreciate your time. I yield, Mr. chairman. >> gentleman yields back. And I recognize Mr. schmidt from the great state of kansas for five minutes. >> thank you, Mr. chairman, and appreciate the witnesses being here. I before I started serving in this role, I spent 12 years as a state level law enforcement officials, prosecutor. And before that, I was a local prosecutor in municipal court.
▶ 2:08:00Nobody's talked about municipal court that I've heard yet today, but an awful lot of these retail crimes wind up in city courts around the country, which is they're different animals from from state courts or federal courts. Um, in fact, I've got a friend who was a career federal law enforcement official and has later in his career, become a state level law enforcement person. And, uh, when I was attorney general, my state, we actually turned some federal money back because it was just a pain in the neck to deal with all the strings.
▶ 2:08:29Just let me do my job. I don't need help. I just need you out of the way. Don't want to partner with the feds. I just want to do my job. Um, and this fellow called me the other day and said, you know, now that I'm on the state side of this, I have a new appreciation for how difficult even well-intended federal actions can be, uh, in some of this. So that's that's the context in which I ask, you know, a handful of questions here. Uh, Mr.
▶ 2:08:51Wickham, in your written testimony, you talked about aggregating offenses, and I, I took your testimony to be how that conversation usually unfolds, which is, you know, if you got somebody who steals three different little amounts over a fixed period of time within a window, you add them up and you get a bigger amount. So you get to a higher level crime, or you get from a misdemeanor to a felony or whatever, which, by the way, is not.
▶ 2:09:17We used to actually sometimes deliberately charge misdemeanors, even though it was a felony amount, because you could actually get time in the county jail for a misdemeanor, but you were going to get probation for the low level felony. So if you wanted to take somebody off the street, you didn't want to charge the felony. So my point is, it's a little more complicated sometimes than we make it in this town. But, uh, my question for you on aggregation, have you had any discussions, thoughts or otherwise on perhaps a little bit of a different type of aggregation?
▶ 2:09:43Is there is there is there benefit to having a conversation about whether aggregating repeated state crimes, for example, stealing something in interstate commerce, which almost all of this is, should at some point become a federal offense, a freestanding federal offense in and of itself. So you can get not low level guys, but repeat offenders that do a lot of small things into the federal system.
▶ 2:10:04>> that's a great question, and I appreciate your perspective being in the room with people like you and hearing you saying that things are a little more complicated, there's a little more nuance, or the best way to pass information from policy makers, from prosecutors to our small business members. So I really appreciate that.
▶ 2:10:26Well, I think what underlies your concern is that oftentimes we are seeing these networks are so broad that they can, with very small amounts of people, uh, be able to get multiple jurisdictions, not only in the state but outside the state. And is there a federal aspect to it?
▶ 2:10:51We recently had an arrest in california, where there were just nine people hitting one specific big box retailer 600 times, and that's a valid question as to are we getting to a point where there needs to be some sort of national crime and we support the cauca bill, the combating organized retail crime act, to have a larger federal role here
▶ 2:11:22So that we can put the evolving nature of these types of crimes, whether it be just nine people or 900 people throughout the united states under a federal lens, and get the right kinds of to right size, the laws to the problem at hand. So that's something that I really hope that the upcoming debate on cauca will, will bring out.
▶ 2:11:50>> because there's a time, I mean, I believe most of these ought to be dealt with state and local, and the feds ought to stay out of them. But you ought to figure out the ones that are better dealt with under federal law, with federal tools, and then give the federal authorities the tools to do the job, as opposed to having to rely on state folks to find them, arrest them, stop them, ship them to the feds, and then maybe you get attention and maybe you don't get attention. And it's, you know, pick a lane, right. Pick a lane.
▶ 2:12:15Uh, so, you know, on that point, uh, you know, one of the, one of the things we did in kansas on our watch, not really in this space, but related financial crime space. Uh, we finally got tired of dealing with our friends in washington. And we went to the regional enforcement authorities and a number of the federal law enforcement agencies. A lot of them were out of kansas city. It happened to be. So they were close for us. We sat down.
▶ 2:12:36We had a great working relationship with these guys, and we said, hey, you guys come across a whole lot of lower level crimes in the course of your work that the us attorney's office will never take up because they're not big enough. Can we enter into an agreement where you will ship them to us and we will prosecute them under state law, which is the key? Don't don't make me a federal prosecutor if I'm a state guy. But you're your law enforcement guys have investigated them and worked them up and we did that and got a lot of convictions. Is there any merit in that? And thank you, Mr. chairman.
▶ 2:13:06>> yeah, I'd just like to first commend kansas for a lot of the innovation and leadership. Uh, wichita had a really big problem with, uh, retail crime in the last few years, and kansas has gotten them the, the resources. And then secondly, having this conversation. Homeland security investigations. >> gentleman's time is up. >> that's really critical. And they have regional offices that can be helpful. Resources. >> gentleman's time is up. Uh, I now recognize miss goodlander from the great state of new hampshire for five minutes. >> thank you, Mr. chairman.
▶ 2:13:32And thank you to our witnesses for being here today for this really important hearing. I came here to congress, uh, to really make our country safer, more prosperous, and more free. Those three pillars work together. But safety, public safety is really at the core. And the root of the root of what we've got to be doing here. And before I came to congress, uh, I served for years at the department of justice.
▶ 2:13:56And one of the things, with all due respect to county and local officials and actually the utmost respect, because what I see every day in this work is how mission critical our state, local, county, uh, partners are. And, Mr. wickham, you pointed this out powerfully in your testimony. Uh, Mr. jackson, you have as well. And I appreciate all of your service in government and your testimony today. But you know what I saw at the justice department and what I see in this job is partnership.
▶ 2:14:26This if there's a through line in this hearing, what I'm hearing from all of you, partnership is at the core of how we combat crime in this country, whether it's partnership across government at every level and across branches, partnership with the private sector partnership is is the key. I want to start by asking about our partnerships with, uh, local law enforcement. And Mr. wickham, you you pointed out in your testimony just how important county attorneys are as gatekeepers in our criminal justice system.
▶ 2:14:55Um, when I was at the justice department, I saw how these federal dollars really make a huge difference in the work that law enforcement is able to do. We're asking them to do more with less every single day. And so these these grant programs, you know, I serve on the armed services committee, when I look at the budget of the department of defense, nearly $1 trillion, and you look at the department of justice's budget, you know, they're being asked to do more with less every day.
▶ 2:15:22So I'm deeply concerned about the millions of dollars in cuts that we've seen already this year to really successful and important department of justice programs and billions of dollars in proposed cuts, uh, for next year's budget. So, Mr. wickham, can you speak to what you've seen in your work about the importance of federal programs? As much as they need to be improved, how important they are as a lifeline to local law enforcement? >> I think they're very important.
▶ 2:15:49And our numbers back that up, that, um, when you are asking, why is this a persistent problem over time? And people will point back to the fact that it is underreported. Why is it being underreported? Our data shows that the majority of those small businesses and retailers are not reporting it, because there's a lack of law enforcement support.
▶ 2:16:18So if, as harragas testified to, if there isn't an accompanying, um, law enforcement presence there, that is going to discourage, uh, the, the reporting of this, and then we will just see repeat offenders and then that repeat offender builds up the frustration and increases the risk of violence.
▶ 2:16:45So resources is really something that we're talking to both our small businesses and our larger retailers is something that's almost always brought up first, second or third concern. >> well, I appreciate that. I want to ask you to follow up on, on some of the earlier discussion about how we measure the impact of cybercrime. So by some estimates, cybercrime is costing us more than $10 trillion a year.
▶ 2:17:13Does that sound like a fair ballpark estimate? Do we even have a way of estimating the overall dollar cost? >> I don't know that we do. I think right now we're seeing this, um, conflagration of of cybercrime scams and fraud. And traditionally those have been handled as like three separate pillars by financial services institutions, by corporations, even by small businesses.
▶ 2:17:34Um, but if you start to peel the onion, you're going to see some of the same bad actors like the ccp behind, um, things that we would have considered just a run of the mill scam is now highly, highly organized and has a nation state actor at the at the top of the food chain. So it's hard to estimate. >> if you had to give guidance to this committee on the the the most significant thing we could do to combat cybercrime. What is your recommendation?
▶ 2:18:00>> I think for small businesses, it's finding those leverage points to get them to engage before the bad thing happens, whether that's through the sba or, um, other partnerships, finding a way to encourage more small businesses to to engage the owner themselves and not to just think, oh my it guy has it handled because your it guy might not have it handled.
▶ 2:18:20>> well, I appreciate that I'll be following up with questions for the record, but I just note that the cybersecurity information sharing act of 2015, an important provision of law that has allowed for some measure of information sharing, uh, is set to expire at the end of january, and we would very much welcome all of the witnesses assistance in thinking through how we make sure that we keep that critical lifeline of information alive. >> thank you. Very important. >> gentle lady yields back. I now recognize mister jack from the great state of georgia for five minutes. >> thank you very much, Mr. chairman.
▶ 2:18:50As a freshman, uh, one of the benefits of being a freshman is you get to ask questions. Last, and as a component of that, I would welcome a chance, Mr. wickham, for you. I don't know if you want to continue on on what you were discussing with my colleague, Mr. schmidt on some of those recommendations right before that time expired, but give you an opportunity to to further your comments there. >> well, I appreciate your service, Mr. jack.
▶ 2:19:12And, uh, we've had very good partnerships with the state of georgia and your attorney general on combating retail crime. I'd like to to joke with your attorney general that he was on the precipice on on the issue of, um, verified transactions online, that georgia had that in place before the federal inform act, which we worked very hard to pass.
▶ 2:19:38The issue of coordination is seems so basic, but when you and I have a discussion about jurisdiction, which is so critical in this area, people's eyes roll back. You know, it's just that we have the fiefdoms. What is the rule of congress? What is the rule of the policymaker? What is the rule of the prosecutor? And we really need to hit this particular problem at all angles.
▶ 2:20:07And so we support the bill to coordinate efforts at the national level. And also those individual decisions by prosecutors on what offenses they're going to charge, because those are equally important to this fight. >> thank you very much. If I could shift to Mr.
▶ 2:20:27Uh, I'm curious, um, as we close this hearing, uh, it's important for us to hear from someone like yourself who's directly impacted by this and welcome any closing thoughts and comments from you as to how best our committee can serve you and serve our constituents, combating these these retail crime thefts. >> thank you. Congressman. >> I think having me here speak on behalf of my brothers and sisters, making, uh, everybody aware of the situation is great.
▶ 2:20:54Uh, I think we need to put pressure on the states to have common sense laws. I would argue that what we had tried in the past has not worked. We were trying to help people, but by pretending to help, we actually hurt not only them, but the communities and the small businesses. We just need to make sure that any crime is considered a crime, no matter how small, to be able to enforce it.
▶ 2:21:18So we have some type of stability that will then create a common sense of community for people, for businesses and everybody that wants to do good and live a happy, healthy life. >> yeah. >> it's interesting. I'm gonna pivot back to Mr. wickham. Um, you mentioned the the enforcement mechanism.
▶ 2:21:35You know, I find at least in my community that I serve, um, you know, a lot of the, the local mom and mom and pop shops they suffer from, you know, that threshold, if it's under $1,000 or under $500, um, rarely will you see that prosecuted. I'm curious, in addition to what other ideas you may have for us to to navigate that, because invariably it seems like the criminals figure out what that threshold is. And they, they, they, they pursue their illicit theft right under it.
▶ 2:22:03>> we've talked a lot about aggregation of laws, and that is something we're very happy to see increased action by the states to allow either the attorney general or another prosecuting official to get these multiple offenders who deliberately cross jurisdictional lines because they know one, they can either steal below the minimum or two, just do what appears to be a
▶ 2:22:33One off in a particular jurisdiction. But going back to the example in california, where nine individuals hit a big box retailer 600 times, there's a point at which you have to say, these aren't one offs, and we need to work together to aggregate these offenses so that we can take these people off the streets. >> thank you very much.
▶ 2:22:57Um, miss, I want to give you an opportunity in these closing 47 seconds as they tick by to offer any closing thoughts and comments before this committee. >> yeah. One of the ideas that we've actually, um, considered is, or a question we've asked ourselves is, should collectively, small businesses around the country be considered a critical national infrastructure sector?
▶ 2:23:16And I think there might be some merit into looking into that concept, because when you look at small businesses holistically, there are an enormous part of our our gdp and our employment and drive a huge part of the economy. So I think looking at them like critical national infrastructure, like we do utilities and financial services sector and all the other sectors might be one way to to combat the problem of cyber crime affecting small businesses. >> well, thank you all, Mr.
▶ 2:23:46Jackson. Thank you for your testimony as well. I worked at the white house so I can have familiarity with that. And I will yield back to our distinguished chairman, Mr. schmidt. >> thank you. The chair now recognizes Mr. cisneros from california for five minutes. >> thank you very much. And I want to thank our witnesses for being here today. Uh, Mr. wickham, uh, welcome back. Um, I'm your last, uh, individual last set of questions you'll get here. So before we can wrap up.
▶ 2:24:14But, um, you know, I don't want to restate the numbers and data again, that's been kind of mentioned throughout this hearing, but simply say that when state and local governments focus on crime and gun violence and invest in it, uh, there is a change, right? Gun violence goes down and crime goes down. It does make a difference.
▶ 2:24:35Unfortunately, the trump administration cuts has cut programs and diverted resources to fight gun violence and crime, and instead has diverted those resources towards, uh, immigration. You know, towards targeting our immigration communities, immigrant communities that are not only the workforce for many of these small businesses, but they also shop at small businesses.
▶ 2:25:01And for many of them, these immigrants are the entrepreneurs who have started, uh, thriving businesses in our communities. And with that, I'll get to my questions. Uh, Mr. jackson, according to the giffords law center, multiple studies show a link between weakened public carry laws and increased violent crime rates, with some indicating an 11% to 15% increase in homicide and violent crimes after states deregulate concealed carry.
▶ 2:25:25As someone who has worked at both the federal level and at the community level, how do you respond to arguments that more guns in public equals less crime? >> uh, well, all the studies that we've seen in recent history have shown that that's false.
▶ 2:25:41Um, and if you need an example, you can look at what's happening in our southern states across the country, uh, the states with the weakest gun laws and the least amount of resources to prevent violence are seeing the harshest impact of violence, and not just in cities, but in rural communities where we're losing veterans and our elderly folks, um, to moments of crisis, um, after being armed and not having the resources to to remove those firearms, at least temporarily. And so, uh, this is huge.
▶ 2:26:06We have to make sure we continue to build on, uh, progress to keep guns out of our public spaces and out of the hands of those who are most at risk or most vulnerable. And the states that are doing that are seeing tremendous results, uh, states like massachusetts, new jersey, even california are seeing historic reductions because of their strong gun laws combined with those resources. >> and just to expand on that, can you explain how weak gun laws in one state can directly increase shooting risks for small businesses across state lines? >> well, yeah, D.C.
▶ 2:26:35Is a perfect example. We talked about the terrible incidents that have happened in this city, including, uh, the attacks on even our armed services, but 95% of the guns that arrive in washington, D.C. come from outside of the city. Uh, and the same is the same case for chicago. A third of the illegal guns come from indiana. And so we know that a neighboring state with weak gun laws, uh, is a breeding ground for illegal guns to flow into inner cities and into communities.
▶ 2:27:01And again, it's not just homicides that also leads to other forms of violent crime, whether it's robbery or theft or even retail crime. Many of those guns are illegally trafficked. >> thank you. Now, look, my grandfather was a world war two veteran who came back from the, uh, the world war two, uh, used his va benefits to start a small business, a market. Um, unfortunately, this is a long time ago, but unfortunately, that that store was robbed one day, and he became a victim of gun violence and, uh, died. Um, I want to thank you, Mr.
▶ 2:27:32Jackson, for sharing your story. Um, but based on your understanding, what survivors. What do survivors need most in the months and years after experiencing gun violence? >> yeah, in the short term, we need victim services. Um, we looked at, uh, when someone is shot, the employer themselves, um, the cost for their medical fees is upwards of $30,000. When I was shot, uh, it cost me around $20,000 in hospital costs alone. Uh, but those victim service dollars are under siege.
▶ 2:27:58In fact, the trump administration has already cut $2 billion from the crime victims fund. And in fact, 24 states are now suing the trump administration because they don't have those funds to support victims of violent crime. And so we start with that, uh, as well as focusing on efforts to prevent violence, uh, and then efforts to make sure we're holding those accountable who cause that crime. >> with that, thank you all again for being here today. Thank you for your answers. And I yield back. >> gentleman yields back.
▶ 2:28:25And I also would like to thank our witnesses for being here today and for your testimony. Uh, without objection, members have five legislative days to submit additional materials and written questions for the witnesses to the chair, which will be forwarded to the witnesses. So I'll ask the witnesses to please respond promptly if that happens. If there's no further business. Without objection, the committee is adjourned.