SOUTHWEST KEY'S SANCHEZ PAID $3.6 MILLION IN 2017

By Maria Sacchetti

The Washington Post

The former leader of a nonprofit organization that shelters migrant children for the U.S. government resigned this year after it was publicly disclosed that he earned nearly $1.5 million in 2016. New tax records obtained by The Washington Post indicate he earned more than double that — $3.6 million — in total compensation in 2017.

Juan Sanchez, founder of Southwest Key Programs, the Texas-based nonprofit that houses thousands of children and teens for the Department of Health and Human Services, left his job on April 1 amid outrage over his compensation and business dealings. Members of Congress fumed about individuals profiting off migrant detention just as the Trump administration was separating migrant families at the U.S.-Mexico border, prosecuting adults for illegal entry and shuttling their children to Southwest Key and other shelters.

Southwest Key is one of the main contractors involved in housing unaccompanied migrant children as they wait to be placed with family members or sponsors, housing approximately 4,500 minors in Texas, California and Arizona. The organization cares for just more than one-third of the 12,500 minors in HHS custody. Southwest Key has an annual contract of approximately $460 million a year to shelter children, and federal records show the nonprofit has collected more than $1.1 billion since 2014.

Housing children during the migrant crisis has created a major financial strain for HHS, which in May suspended English classes, soccer and legal aid for children until Congress approved a $4.6 billion supplemental funding package that included money for migrant care. But it also has created a boon for those who provide HHS housing, with contracts worth hundreds of millions of dollars; BCFS Health and Human Services recently received a $300 million contract to run an emergency shelter in Carrizo Springs, Tex

Southwest Key is one of several contractors that have come under scrutiny during the migration surge that has led to the U.S. government’s crackdown on illegal immigration.

[‘I hate this mission,’ says operator of new emergency shelter for migrant children]

Sanchez’s income is detailed in a tax filing by Promesa Public Schools, Inc., a subsidiary of Southwest Key that manages the nonprofit’s Texas charter schools in Austin, Brownsville and Corpus Christi. Southwest Key’s separate tax returns are due this month and will not show additional income for Sanchez, according to a Southwest Key official who spoke on the condition of anonymity to discuss details that have not yet been released.

Sanchez did not respond to a request for comment. A representative for Sanchez declined to comment and referred questions to Southwest Key.

In an interview last year, Sanchez told The Post that his salary increase in 2016 reflected a retirement contribution rather than a pay bump, noting that he for years had worked for a low salary and no benefits. He said Southwest Key’s work was critical to providing a safe environment for children.

“We had nothing,” he said in June 2018, referring to the early years of Southwest Key. “No benefits, no 401(k), no insurance. We just go out there keeping kids out of prisons and jails.”

In 2017, Sanchez received more than $1 million in cash payments — nearly $784,000 in base salary and $238,500 in bonus pay, according to records filed with the Internal Revenue Service and obtained by The Post. Sanchez’s largest source of income was $2.5 million paid in a cash-value life insurance and retirement policy.

Joella Brooks, the interim chief executive of Southwest Key, said Sanchez’s increase in compensation “had nothing to do with the number of youth in our care.” She attributed the increase to the life insurance and retirement policy the Southwest Key board approved for Sanchez, Brooks and a few other organization leaders.

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Brooks said the life insurance policy has since been discontinued and that Sanchez “forfeited hundreds of thousands of unvested dollars from this program as a result of his departure. That money has been returned to Southwest Key.”

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