Ex-CEO of nonprofit that houses migrant children earned over $3.5 million: report

Ex-CEO of nonprofit that houses migrant children earned over $3.5 million: report
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The former CEO of a nonprofit that houses thousands of migrant children and teens reportedly earned $3.6 million in total compensation in 2017. 

The Washington Post, citing new tax records it obtained, reported on Saturday that Juan Sanchez, founder of Southwest Key Programs, earned more than $1 million in cash payments for his services that year. 

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According to records filed with the Internal Revenue Service, he received a base salary of about $784,000 and a bonus of $238,500. He also reportedly received $2.5 million paid in a cash-value life insurance and retirement policy.

The new details regarding Sanchez's earnings emerge just months after he resigned amid mounting scrutiny over the $1.5 million he earned in 2016. Sánchez, whose nonprofit has provided shelter and housing for migrant children being held in U.S. custody for more than 20 years, said at the time that he was stepping down because "widespread misunderstanding of our business and unfair criticism of our people have become a distraction our employees do not deserve, and I can no longer bear."

Founded in 1987, Southwest Key Programs has housed numerous migrant children and teens for Department of Health and Human Services (HHS). The Texas-based nonprofit holds about 4,5000 unaccompanied migrant children in Texas, California and Arizona as they wait to be placed with families or sponsors, the Post noted.

The nonprofit has $460 million annual contract and has earned more than $1.1 billion since 2014, the newspaper reported, citing federal records. 

It added that while the surge in immigration has strained HHS financially, it has served as a boon for contractors that house migrants. Southwest Key has since become one of the multiple contractors to come under congressional scrutiny over its services. 

The Post noted that Sanchez’s income was 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.

Joella Brooks, the interim chief executive of Southwest Key, told the newspaper that Sanchez’s increase in compensation “had nothing to do with the number of youth in our care." She said that the added compensation instead amounted to an increase to the life insurance and retirement policy for officials such as Sanchez. 

She added that the policy has been terminated 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.”

The Post noted that other executives have returned a substantial amount of unvested funds after leaving Southwest Key. Brooks and other leaders reportedly agreed to return some of their life insurance benefits. 

“The new team I’m building in Austin is committed to transparency and doing all we can to continue the good work done in the decades of Southwest Key’s existence and address issues related to decisions made in the past,” Brooks said. “As the leader of our organization, I am committed to taking corrective action when necessary and restoring the faith and trust in our operations.”

Southwest Key did not immediately respond to a request for comment from The Hill. Sanchez did not respond to a request for comment from the Post. 

HHS is on pace to house the largest number of unaccompanied migrant children in a fiscal year, officials told the Post. The agency has provided shelter for more than 63,000 so far this fiscal year, a figure that surpasses last year's total.