The controversy over the treatment of immigrant children continues. And some of it centers around immigrant children’s facilities run by 501(c)(3) nonprofit organizations.
The language of this crisis is also controversial. Are the children immigrants or migrants? I have chosen to use immigrants, as the definition of migrant - someone who moves from place to place in order to find work or better living conditions – doesn’t fit. And then there’s detention center vs. children’s shelter (the latter preferred by the Department of Health and Human Services/HHS). I’ve gone with the neutral word “center.”
Here's some context: Customs and Border Patrol (CBP) detention centers are part of law enforcement through the Department of Homeland Security (DHS). Immigrant children's centers are under the jurisdiction of HHS and required to comply with state regulations (CBP facilities are not). CBP shelters are specifically designated for short-term detention. Under U.S. law, once DHS learns that an unaccompanied child is in its custody, the child must be transferred to HHS custody within 72 hours.
There are numerous nonprofits receiving federal funds for children's centers, but Southwest Key Programs is the biggie. It houses over one-third of all unaccompanied immigrant children in detention. This has proved to be quite lucrative - the organization has an annual HHS contract of about $460 million, and it has collected more than $1.5 billion in federal funding since 2008.The Austin-based charity operates 24 permanent facilities in Texas, Arizona and California. One of those is Casa Padre, the nation’s largest, which houses more than 1,400 minors in a former Walmart featuring a massive mural of Donald Trump.
Southwest Key has been cited repeatedly by state health authorities for infractions including improper handling of food, unsanitary bathrooms, inappropriate behavior by employees, insufficient medical treatment for detainees, and child sexual abuse. The agency was forced to close one Arizona shelter because staffers were accused of physical abuse, and two others that weren't doing employee background checks.
Not only that - its founder and longtime President Juan Sanchez resigned in March amid scrutiny over the nearly $3.6 million in compensation he received during 2017 ($1.4 million in salary, the remainder in dubious payments from life insurance and retirement policies). Six other officers, including their Chief Financial Advisor and Vice President (Sanchez’ wife) also earned more than $1 million.
According to Marcus Owens, former head of the IRS nonprofit division, these salaries are extraordinary even for a large charity. CharityWatch president Daniel Borochoff said Sanchez's salary was the fifth-highest CEO salary among the more than 600 charities his organization ranks. The head of the American Red Cross (a multi-billion dollar charity) receives a $600,000 salary to run an organization that is ten times larger.
Just a quick reminder about the legal definition of a nonprofit: to be tax-exempt under the IRS code, an organization must be organized and operated exclusively for exempt charitable purposes (including relief of the poor, the distressed, or the underprivileged) and none of its earnings can be used to enrich any private shareholder or individual. This reprehensible behavior by Southwest Key leaders takes the “non” out of nonprofit.
Southwest Key is currently being investigated by the Justice Department for financial malfeasance. Yet despite this investigation plus hundreds of violations recorded at its centers across the state in the past few years, Southwest Key’s shelters are expanding (along with the number of children in detention), and the nonprofit is slated to receive $458 million from the federal government this year. According to Interim ED Joella Brooks, Southwest Key has hired a new chief financial officer, reexamined pay incentives, and the organization is trying to steer itself in a different direction.
Let’s hope so - but I'm not holding my breath.
