An Austin-based nonprofit focused on housing migrant children is the subject of a New York Times investigation. The report details a record of poor management and potential financial misconduct. Southwest Key has shelters across the country capable of holding up to 5,000 migrant children. The organization has become a key housing resource for the federal government as thousands of minors and their families have crossed the U.S.-Mexico border this year.
“They’ve really diversified, almost becoming a nonprofit conglomerate with charter schools, for-profit companies and their original juvenile justice programs,” says Nick Kulish who covers immigration for the Times and who was one of the reporters who worked on the investigation.
Kulish says Southwest Key and its founder Juan Sanchez are ‘stockpiling taxpayer dollars,’ in addition to more questionable practices uncovered by the Time’s investigation.
Southwest Key’s Chief Financial Officer, along with Sanchez and a realtor, personally owned of one of the shelters, paying themselves rent from the federal grants. That arrangement raises questions because they essentially loaned themselves millions of dollars, Kulish says.
Kulish says Southwest Key paid salaries to Sanchez, his wife and the CFO that were disproportionately high for the industry. Sanchez’s salary is more than twice as high as that of the head of the American Red Cross is making, despite that the Red Cross dwarfs Southwest Key when it comes to profits.
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Written by Kristen Cabrera.