Southwest Key officials earned more than $1 million running migrant child shelters

By MARK BERMAN | 7/22/2019, 10:01 p.m.
Six high-ranking employees at a nonprofit organization housing thousands of migrant children for the federal government made at least $1 ...
Southwest Key headquarters in Austin. – Photo by Rachel Zein/The Texas Tribune

The Washington Post

(The Texas Tribune) – Six high-ranking employees at a nonprofit organization housing thousands of migrant children for the federal government made at least $1 million for their work in 2017, according to tax filings released Tuesday.

The tax records show that Juan Sanchez, founder of Southwest Key Programs, the Texas-based nonprofit, earned $3.6 million in total compensation that year, which The Washington Post reported last week. They also showed that other prominent employees – including the group’s chief financial officer, who earned more than $2.4 million – were earning substantial, seven-figure salaries at the nonprofit.

Sanchez left Southwest Key earlier this year amid anger over his income and scrutiny of the nonprofit’s facilities and processes. Three of the other officials who earned at least $1 million in 2017 also have left the group, according to an official at Southwest Key who was not authorized to speak publicly.

Southwest Key is a prominent contractor housing unaccompanied migrant children awaiting placement with relatives or other adults. It shelters about 4,500 children and teens in Texas, California and Arizona, caring for a little more than a third of the 12,500 minors held by the Department of Health and Human Services.

This work has proven to be very lucrative: The nonprofit has an annual contract of about $460 million to house children, and it has collected more than $1 billion since 2014, according to federal records. Other companies and nonprofits also have gotten contracts that could be worth hundreds of millions of dollars apiece for housing children, though some executives have expressed a grim view of their work.

Kevin Dinnin, head of the San Antonio-based nonprofit BCFS Health and Human Services, told reporters at a new emergency shelter for unaccompanied migrant children, “I hate this mission. The only reason we do it is to keep the kids out of the Border Patrol jail cells.”

Sanchez’s compensation has ballooned in recent years, nearly doubling from $786,222 in 2015 to $1.48 million a year later. Then it doubled again in 2017, according to the tax form released Tuesday and another filed by a Southwest Key subsidiary that manages charter schools in Texas.

In a 2018 interview, Sanchez said the increase between 2015 and 2016 came from a retirement contribution rather than a salary bump. He said that in the nonprofit’s early years, they “had nothing. No benefits, no 401(k), no insurance. We just go out there keeping kids out of prisons and jails.”

A representative for Sanchez reached Tuesday declined to comment on his compensation and the tax filing and referred all questions to Southwest Key.

Joella Brooks, who as chief operating officer made more than $1.2 million in 2017 and is now the nonprofit’s interim chief executive, has said the change in Sanchez’s compensation was due to a life insurance and retirement policy that has since been abandoned.

After the tax filing was made public Tuesday, Brooks said in a statement that she “and other leaders who participated in the program separately agreed to return substantial portions of the life insurance benefits.”