By Rebecca R. Ruiz, Nicholas Kulish and Kim Barker
The New York Times
The Justice Department is investigating possible misuse of federal money by Southwest Key Programs, the nation’s largest operator of shelters for migrant children, according to two people familiar with the matter.
The inquiry could upend shelter care for thousands of children, escalating government scrutiny of the nonprofit even as it remains central to the Trump administration’s immigration agenda. The charity operates 24 shelters to house children who were separated from their parents at the border or arrived on their own.
The United States attorney’s office for the Western District of Texas is examining the finances of Southwest Key, based in Austin, and whether it misappropriated government money, according to the people, who were not authorized to speak publicly about the inquiry. Prosecutors on the case are working with the Federal Bureau of Investigation.
The inquiry comes after a New York Times report this month detailing possible financial improprieties by Southwest Key, which has collected $1.7 billion in federal grants in the past decade, including $626 million in the last year alone.
The Justice Department is investigating possible misuse of federal money by Southwest Key Programs, the nation’s largest operator of shelters for migrant children, according to two people familiar with the matter.
The inquiry could upend shelter care for thousands of children, escalating government scrutiny of the nonprofit even as it remains central to the Trump administration’s immigration agenda. The charity operates 24 shelters to house children who were separated from their parents at the border or arrived on their own.
The United States attorney’s office for the Western District of Texas is examining the finances of Southwest Key, based in Austin, and whether it misappropriated government money, according to the people, who were not authorized to speak publicly about the inquiry. Prosecutors on the case are working with the Federal Bureau of Investigation.
The inquiry comes after a New York Times report this month detailing possible financial improprieties by Southwest Key, which has collected $1.7 billion in federal grants in the past decade, including $626 million in the last year alone.
The nonprofit has engaged in potential self-dealing with its top executives, stockpiled tens of millions of taxpayer dollars and lent out millions for real estate purchases, acting more like a bank than a traditional charity, according to records and interviews. It has funneled government money through a web of for-profit companies, converting public funds into private money for the organization, which has paid top executives millions of dollars.
In response to The Times’s report, a spokesman for Southwest Key, Jeff Eller, acknowledged management mistakes but said there had been no criminal intent by the charity’s officials or “a desire to game the system.” Southwest Key also said it would commission an internal investigation.
Mr. Eller said on Thursday that the charity had not yet been contacted by the F.B.I. or the United States attorney’s office, but that it had “a policy of working with any and all investigations.”
Southwest Key, which became a focal point during the Trump administration’s decision to separate migrant children from their families this year, now houses up to 5,000 children in its facilities. One of them is a converted Walmart Supercenter in Brownsville, Tex., that can hold 1,400 children, drawing complaints that it was warehousing them.
In response to The Times’s report, a spokesman for Southwest Key, Jeff Eller, acknowledged management mistakes but said there had been no criminal intent by the charity’s officials or “a desire to game the system.” Southwest Key also said it would commission an internal investigation.
Mr. Eller said on Thursday that the charity had not yet been contacted by the F.B.I. or the United States attorney’s office, but that it had “a policy of working with any and all investigations.”
Southwest Key, which became a focal point during the Trump administration’s decision to separate migrant children from their families this year, now houses up to 5,000 children in its facilities. One of them is a converted Walmart Supercenter in Brownsville, Tex., that can hold 1,400 children, drawing complaints that it was warehousing them.
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