He’s Built an Empire, With Detained Migrant Children as the Bricks

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The Austin, Tex., headquarters of Southwest Key Programs, which houses more detained migrant children than any other organization in the United States.CreditCreditTamir Kalifa for The New York Times

He’s Built an Empire, With Detained Migrant Children as the Bricks

The founder of Southwest Key made millions from housing migrant children. His nonprofit has stockpiled taxpayer dollars and possibly engaged in self-dealing with top executives.

The Austin, Tex., headquarters of Southwest Key Programs, which houses more detained migrant children than any other organization in the United States.CreditCreditTamir Kalifa for The New York Times

Juan Sanchez grew up along the Mexican border in a two-bedroom house so crowded with children that he didn’t have a bed. But he fought his way to another life. He earned three degrees, including a doctorate in education from Harvard, before starting a nonprofit in his Texas hometown.

Mr. Sanchez has built an empire on the back of a crisis. His organization, Southwest Key Programs, now houses more migrant children than any other in the nation. Casting himself as a social-justice warrior, he calls himself El Presidente, a title inscribed outside his office and on the government contracts that helped make him rich.

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Juan Sanchez earned $ 1.5 million last year as Southwest Key’s chief executive.CreditTamir Kalifa for The New York Times

Southwest Key has collected $ 1.7 billion in federal grants in the past decade, including $ 626 million in the past year alone. But as it has grown, tripling its revenue in three years, the organization has left a record of sloppy management and possible financial improprieties, according to dozens of interviews and an examination of documents. It has stockpiled tens of millions of taxpayer dollars with little government oversight and possibly engaged in self-dealing with top executives.

Showing the ambition that brought him from the barrio to the Ivy League, Mr. Sanchez seized the chance to expand his nonprofit when thousands more unaccompanied children began crossing the border during the Obama era. When the Trump administration needed to house migrant children it had separated from their parents, Mr. Sanchez took them in.

As immigration intensifies as a flash point of the Trump presidency, with tear gas being fired at a migrant caravan and the price tag for separating families continuing to rise, Mr. Sanchez is central to the administration’s plans. Southwest Key can now house up to 5,000 children in its 24 shelters, including a converted Walmart Supercenter that has drawn criticism as a warehouse for youths. The system is nearing a breaking point, with a record 14,000 minors at about 100 sites — a human crisis, but also a moneymaking opportunity.

Though Southwest Key is, on paper, a charity, no one has benefited more than Mr. Sanchez, now 71. Serving as chief executive, he was paid $ 1.5 million last year — more than twice what his counterpart at the far larger American Red Cross made.

Shelter Capacity

1,000 occupants

Southwest Key’s 24 shelters are spread across Arizona, California and Texas.

500

100

San Francisco

California

Arizona

Phoenix

New Mexico

Texas

San Diego

El Paso

Houston

Tucson

San Antonio

Brownsville

Former Walmart

Capacity 1,410

Shelter Capacity

Southwest Key’s 24 shelters are spread across Arizona, California and Texas.

1,000

100

San Francisco

California

Arizona

Phoenix

New Mexico

Texas

San Diego

El Paso

Houston

Tucson

San Antonio

Former Walmart

Capacity 1,410

Brownsville

Southwest Key’s 24 shelters are spread

across Arizona, California and Texas.

El Paso

Texas

Houston

San Antonio

Shelter Capacity

1,000

100

Brownsville

Former Walmart

Capacity 1,410

Arizona

Phoenix

Tucson

San Francisco

California

San Diego

Source: Shelter capacity numbers from officials in Arizona, California and Texas | By The New York Times

Southwest Key has created a web of for-profit companies — construction, maintenance, food services and even a florist — that has funneled money back to the charity through high management fees and helps it circumvent government limits on executive pay.

The organization, sitting on $ 61 million in cash as of last fall, has lent millions of dollars to real estate developers, acting more like a bank than a traditional charity. It has opted to rent shelters rather than buy them, an unusual practice that has proved lucrative for shelter owners — who include Mr. Sanchez and the charity’s chief financial officer.

Marcus Owens, the former head of tax-exempt organizations for the Internal Revenue Service under both Republican and Democratic administrations, reviewed Southwest Key’s tax returns for The New York Times. Regulators, he said, seemed to be “asleep at the switch.” Describing the financial dealings of Mr. Sanchez and his colleagues, he said, “I think the word is ‘profiteering.’”

Mr. Sanchez defended his charity. It had to move fast at times, he said in an interview. But every act, he added, has been to help children.

“There are all these kids, they’re at the border, they’re in detention,” Mr. Sanchez said. “How do we get this thing done as quickly as we can so we can start serving those kids?”

Jeff Eller, a spokesman for Southwest Key, said on Tuesday that the charity was closely examining its management practices after questioning from The Times, and that there was “general acceptance” that the charity had made mistakes.

“Could we have done things better? Yeah. And should have? Yeah,” Mr. Eller said. “But there wasn’t a desire to game the system.”

Because of the substantial growth of migrant shelters, the federal government hired an accounting firm this year to review shelter grant recipients, said Mark Weber, a spokesman for the Department of Health and Human Services. He added that the department’s Office of Refugee Resettlement, which oversees migrant shelters, had also created a new division to monitor shelters’ spending.

Separately, the Federal Bureau of Investigation is looking into another shelter provider, International Educational Services, for possible misuse of federal money, according to two people informed of the inquiry. The nonprofit’s founder, Ruben Gallegos, said he had no comment on the investigation.

Mr. Gallegos’s charity — which Mr. Sanchez helped create but cut ties with years ago — lost its federal contracts in February for renting shelters owned by charity officials and paying those officials well above the government salary cap from migrant-shelter grants.

Last year, Southwest Key paid eight people more than the federal salary cap of $ 187,000. In addition to Mr. Sanchez, they included his wife, Jennifer Sanchez, who earned $ 500,000 as a vice president, and Melody Chung, the chief financial officer, who was paid $ 1 million.

Robert Carey, a director of the Office of Refugee Resettlement under the Obama administration, said he found the salaries “appalling.” He acknowledged that his office was focused on providing adequate care for the children and had not examined Southwest Key’s finances. “When you think of how those funds could be used and should be used,” he said, “it doesn’t sit well.”

Mr. Eller said the charity had not done anything improper, adding that the federal government had prohibited the organization from discussing executive pay.

In recent months, Southwest Key has come under scrutiny after a series of abuse allegations.

In July, a worker at a Phoenix shelter was accused of molesting a teenage girl. In September, an H.I.V.-positive worker was convicted of sexually abusing seven teenage boys at another Arizona shelter. Southwest Key, which has relied on temporary workers to staff facilities as it has ratcheted up operations, then blew a deadline to submit proof of employees’ background checks in Arizona. (Mr. Sanchez called the missed deadline a “very small, minor thing.”)

Shortly after, the federal government temporarily shuttered a third Arizona shelter, in Youngtown, after Southwest Key staff members were accused of physically abusing three children. In a recent agreement with Arizona officials, Southwest Key was fined $ 73,000 and agreed to close that facility and another troubled shelter in Phoenix. Mr. Weber, the government spokesman, said there were “numerous red flags and licensure problems” with the two shelters.

“He likes to take chances,” Paula Gomez, a friend of Mr. Sanchez’s since childhood, said of him. “Juan’s that way — you can have a couple T’s that aren’t crossed and I’s that aren’t dotted.”

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Mr. Sanchez wore a serape rather than a cap and gown when he graduated from Harvard with a doctorate in education. “It was just to make a statement that Latinos were here,” he said.

For much of his life, Mr. Sanchez has seen himself as an advocate for the vulnerable, but he also is an ambitious networker who sought to fit in with the powerful.

He met his first wife, Ellen, planning a protest against nonunion produce pickers; at the same time, he took up golf. His office features a portrait of Che Guevara, and his Harvard diploma. At his graduation ceremony, he wore a serape instead of a cap and gown.

“It was just to make a statement that Latinos were here,” he said.

Mr. Sanchez was ultimately accepted into influential circles: He joined the board of the nation’s largest Hispanic advocacy group, now known as UnidosUS. The Mexican government gave him its highest humanitarian award. He rounded up politicians to speak at Southwest Key celebrations and cultivated ties to government agencies.

Growing up in Brownsville, Tex., Mr. Sanchez and his four younger brothers had slept on the living room floor. Their father, a baggage carrier for the Missouri Pacific Railroad, suffered a heart attack driving Juan to his part-time job when he was 14. Juan grabbed the wheel of the car. His father died almost immediately.

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Mr. Sanchez’s diploma hangs beside a mosaic of the Rev. Dr. Martin Luther King Jr. in his Southwest Key office, which also features artwork of Che Guevara.CreditTamir Kalifa for The New York Times

Juan earned money for his family any way he could: selling newspapers, picking fruit alongside migrants from Mexico. He also became a fighter, a top flyweight — at 5-foot-6 and 110 pounds — in state boxing tournaments. He thought he might become a professional boxer; if not, a priest. His high school counselor thought he might make a good mechanic.

Some of Juan’s friends, who had dreamed of becoming football quarterbacks and scientists, started to get in trouble. They ended up in juvenile halls, in jail, or worse.

But he became the first in his family to go past high school, attending seminary before deciding against the priesthood. He graduated from college in San Antonio, earned a master’s degree at the University of Washington and his doctorate at Harvard.

In 1981, Mr. Sanchez, then 33, returned to Brownsville to run the Esperanza Home for Boys, a charity that housed juvenile delinquents. Six years later, he started his own charity to help children stay out of prison. He said he wanted to help kids like those he had known growing up.

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A top flyweight in his youth, Mr. Sanchez thought he might become a professional boxer.CreditThe Brownsville Herald

“Southwest Key was, in essence, started to help my friends,” Mr. Sanchez recalled.

In its first year, the charity raised about $ 200,000 from a state grant to care for 21 juveniles on parole. Mr. Sanchez’s salary was $ 35,000. Southwest Key took out loans of $ 6,700 to buy a Konica copier and an IBM computer.

Early employees described a sense of mission and camaraderie. But it was clear who was in charge.

“Juan is very intense,” recalled Angela Luck, the former deputy executive director. “He can have a temper. He does have a huge work ethic and expects everybody to have the same one. He can also be funny and kind and intelligent. But it was not an easy gig working for him.”

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The Esperanza Home for Boys in Brownsville, Tex.CreditTamir Kalifa for The New York Times

In the late 1980s, a court settlement meant for the first time that migrant children were required to have their own shelters. The federal government asked if Mr. Sanchez could take in migrant children, he said. Instead, he helped his former gym teacher and an Esperanza board member, Mr. Gallegos, establish a nonprofit to house migrants in Brownsville — International Educational Services, the organization now under federal investigation.

It was not until 1996 that Southwest Key entered the shelter business, opening facilities in Coolidge, Ariz., and El Paso, Tex. That year, it pulled in $ 12.2 million, about $ 2.5 million more than the year before.

“I was all for it,” recalled Ofelia de los Santos, a former board member. “The money was so good, and there were so few programs like ours who knew how to run residential programs.”

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A shelter in Conroe, Tex., that Southwest Key rents from a company in which Mr. Sanchez is a silent partner.CreditTamir Kalifa for The New York Times

Mr. Sanchez made little distinction between his professional and personal life, rewarding people he liked. He stacked his board of directors with longtime friends and served on it himself, a potential conflict of interest.

After his first marriage ended, he met his future wife, Jennifer Nelson, who was running a tiny nonprofit in Brooklyn. Southwest Key, by then based in Austin, took it over and hired her. Eventually, Mr. Sanchez’s daughter and brother-in-law would join his charity empire.

Mr. Sanchez also hired a childhood friend, Mera Champion, previously Southwest Key’s banker. Even after she was convicted of embezzling $ 5,300 from her bank, he kept her on.

“He founded Southwest Key, and in his mind, he owns it,” said Arjelia Gomez, the charity’s former chief operating officer. “I always had a problem with that.”

The lines grew blurry at times between the charity’s interests and his own. Ms. Chung, Southwest Key’s chief financial officer, introduced Mr. Sanchez to a friend, Ruth Hsu, a real estate broker. In 2005, she formed a limited partnership, Conroe CHS. Hers was the only name on the documents. But Ms. Chung and Mr. Sanchez were silent partners.

Conroe CHS (for Chung, Hsu and Sanchez) paid almost $ 950,000 for former boarding school dormitories and neighboring land in Conroe, Tex., near Houston, leasing the site to Southwest Key as its eighth shelter. Since then, the charity has paid the partners almost $ 3 million in rent, including about $ 275,000 last year.

Charities are not supposed to make deals that excessively benefit leaders, and shelter grant recipients are prohibited from pursuing their “private financial gain,” and even the appearance of it, according to government rules. Mr. Sanchez said the government knew of his ownership of the Conroe shelter and was “O.K. with us doing that.” Mr. Eller, the charity’s spokesman, also said that the Southwest Key board had been told, and that the rent was low compared with other shelters.

At least one board member, Ms. de los Santos, said she was never informed about the arrangement. Mr. Weber, the government spokesman, declined to comment specifically on Conroe, but said that the outside accounting firm was reviewing all shelter leases and that their findings would “inform future program decisions.”

Two days after The Times asked Mr. Sanchez about his ownership of the shelter, Southwest Key disclosed it publicly. A few weeks later, Southwest Key said Mr. Sanchez and Ms. Chung would seek to sell their stakes.

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Mr. Sanchez invested in almost 475 acres of undeveloped land near Troy, Tex., with a colleague and others. Southwest Key also put money in the deal.CreditTamir Kalifa for The New York Times

Ms. Hsu purchased another shelter near Brownsville in 2012 to rent to Southwest Key — using the charity’s address instead of her own on the deed. Ms. Chung and Mr. Sanchez joined her in buying almost 475 acres of undeveloped land near Troy, Tex., as an investment. The charity also put an undisclosed sum into the deal, mixing its money with that of the executives.

Mr. Sanchez and his wife built a real estate portfolio of six residential properties with the help of Ms. Hsu, under a company called Sueños Grandes Properties, or Big Dreams.

Ms. Hsu’s company also donated to Southwest Key’s new headquarters in Austin. To raise money for the building, Mr. Sanchez hustled like a door-to-door salesman, forging new connections and leveraging old ones.

He persuaded a local philanthropist to donate land. He was friendly with Austin’s first Latino mayor, Gus Garcia, as he pushed for city approval. He boasted of his credentials and promised jobs at the local branch of the federal Economic Development Administration.

“He was way out of the barrio,” said Pedro Ruiz Garza, then the federal agency’s regional director, who signed off on $ 4 million in grants to Southwest Key. “I don’t know how it is that he found his way to Harvard. That was very impressive.”

The new three-story glass building had a slide from the third floor to the second, showing the kind of corporate whimsy common in Silicon Valley. Everyone got a thank-you.

Mr. Garcia was named to Southwest Key’s board. Ms. Hsu’s company was recognized on a plaque in the lobby. When Southwest Key opened a 275-foot “walk of heroes,” with mosaics of people considered important to the charity, the first was Mr. Garza, the federal official. The second was the Rev. Dr. Martin Luther King Jr.

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Mr. Sanchez at his charity’s headquarters in Austin.CreditTamir Kalifa for the New York Times

In 2013, Mr. Sanchez took a “Juan Across America” tour, highlighting Southwest Key’s 25th anniversary. In a YouTube video, he arrived at a new San Antonio shelter. As “Hail to the Chief” played, Mr. Sanchez bowed; staff members applauded. “El Presidente’s in town,” announced the video. At 65, he was nowhere near retirement.

The shelter industry was poised to explode. Tens of thousands of migrant children began crossing the border without family members, more than ever before. Southwest Key, with its 15 shelters, became one-stop shopping for new beds. The government needed Southwest Key and Mr. Sanchez’s can-do attitude; he and his team worked closely with Obama officials to set up shelters.

“There were just kids all over the place,” Mr. Sanchez recalled. “The federal government got embarrassed.”

Southwest Key opened eight shelters in 2013 and 2014. These were no longer small group homes, the kind envisioned by advocates. They were large institutions, with room for 236, 300, even 420 children.

“It clearly had gone through enormous growth, and I think some of the growth was without a lot of scrutiny,” said Mr. Carey, appointed head of the Office of Refugee Resettlement in April 2015.

Conservative critics said Southwest Key wasted taxpayer dollars and coddled illegal immigrants. In 2014, Senator Charles E. Grassley, Republican of Iowa, criticized the charity for requesting $ 316 per child per day from the federal government for a California shelter that had an organic garden and a petting farm with miniature ponies.

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Casa El Presidente, a smaller Southwest Key facility that houses younger children in Brownsville.CreditTamir Kalifa for The New York Times

As the shelters multiplied, so did executive pay. Mr. Sanchez earned $ 279,000 in 2012, and $ 682,000 in 2015. His wife earned $ 123,000 in 2012, and $ 275,000 in 2015.

Budgets and shelter costs, not executive compensation, were the administration’s focus. “Salaries at the top and salaries of individuals in the organization were not something that I was looking at,” said Mark Greenberg, then acting head of the agency overseeing the Office of Refugee Resettlement.

One reason the charity could pay so much was that it had diversified, operating for-profit companies and charter schools. Mr. Sanchez, who had stepped down from the Southwest Key board in 2007, opted to sit on the boards of the for-profits and the charters.

A holding company, Southwest Key Enterprises, oversaw eight for-profits, including those providing construction, maintenance and food services.

These aimed to create jobs and earn money for the charity through outside work. But they largely subsisted on government grants and contracts with Southwest Key for work at the charter schools and headquarters. The charity also lent out employees to do work for the for-profits, charging the companies hundreds of thousands of dollars in management fees.

Regulating businesses can be tricky for a charity, especially when their major customer is the nonprofit itself and competitive bids are few. Ms. de los Santos, a lawyer, left the charity’s board around the time the companies began operating. “There would be more headaches and liabilities, especially with the for-profits,” she recalled.

Teo Tijerina, who ran the for-profits in 2014 and 2015, said they had to charge enough to help cover the charity’s overhead, making it tough to win bids for outside work. “We would always be undercut by the small guys,” Mr. Tijerina said.

Southwest Key also set up charter schools — an elementary school on the donated land at its headquarters and a secondary school nearby. It just opened two more, in Corpus Christi and Brownsville.

Martha Cotera, a school board member and friend of Mr. Sanchez, said she had grown suspicious over school spending, mostly because the board was given no choice about awarding work to Southwest Key for-profits.

“They were sold to us as economic development enterprises for the community, but I saw that as very self-serving,” Ms. Cotera said.

The businesses have charged the two Austin schools more than $ 4.4 million for food, maintenance and janitorial services since 2009. The charity has also charged the schools more than $ 6.3 million in rent and unspecified services.

Around the time Ms. Cotera quit the board, Ms. Hsu, the real estate broker, joined.

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Casa Padre, a former Walmart in Brownsville, can shelter more than 1,400 migrant children.CreditTamir Kalifa for The New York Times

Southwest Key’s shelters transformed the institutional landscape in towns near the Mexican border, replacing a psychiatric hospital, a nursing home, college apartments.

Mr. Sanchez built the shelter operation on a network of real estate investors. Instead of buying buildings, he engaged in complex rental transactions that charity experts said raised concerns.

Southwest Key asked friendly developers to buy properties to rent to the charity. Mr. Sanchez said he did not want to be stuck with empty shelters if children stopped coming. “It’s just not worth it for us to be purchasing buildings,” he said.

The investors were well rewarded. Over the past five years, a group based out of Mesa, Ariz., has earned more than $ 28 million in rent for properties that cost roughly $ 16 million. Others who benefited included a former New Mexico state cabinet secretary, a former adviser to a Mexican presidential candidate and two brothers who ran gas stations in Matamoros, Mexico.

In one case, Southwest Key paid inexplicably higher rent than the prior tenant. The charity paid $ 117,000 a month for a building in Mesa where the previous renter, trying to sublet, had advertised a rate of $ 30,000 a month.

The charity’s most unusual relationship was with a pair of Brownsville developers, Ryad Bakalem and Rafael Chacon. Mr. Sanchez said he could not recall how he met the men, whose companies bought two former medical centers in 2012 and 2013 to rent to Southwest Key. Since then, the charity has lent almost $ 9 million to the developers’ companies, for two shelters and a charter school.

Though it isn’t illegal, charities rarely lend money for real estate deals. The arrangement — with no government watchdog, no bank — can hide kickbacks or other improprieties because no outsider is monitoring whether the loans are repaid on time, and who might benefit.

The biggest of those deals was the shuttered Walmart in Brownsville. Mr. Sanchez worked closely with the Obama administration to develop a shelter that could absorb an influx of children.

How Southwest Key Acted as a Bank

Charity experts questioned why the nonprofit — now sitting on $ 61 million in cash — did not buy a former Walmart that it turned into a shelter. Instead, the charity lent millions to property developers to buy the building. With no bank or government watchdog, such an arrangement can hide kickbacks and other improprieties.

1. Southwest Key loaned $ 6 million to a shell company called Chacbak, run by Rafael Chacon and Ryad Bakalem, to buy and renovate the shuttered Walmart in Brownsville, Tex.

$ 4.5 MIL.

Loan to buy building

Southwest

Key

Chacbak

$ 1.5 MIL.

Loan to remodel

2. Mr. Chacon and Mr. Bakalem then formed a separate company called Randr Ventures. With the aid of a $ 10 million loan from an Arkansas bank, Randr bought the Walmart from Chacbak, essentially selling the property to themselves.

Arkansas-

based bank

Randr

Ventures

Chacbak

Both owned

by Rafael Chacon

and Ryad Bakalem

$ 10 MIL.

Bank loan

3. Randr Ventures used the loan to help pay for more renovations. Then the company rented the property back to Southwest Key, at a rate of almost $ 5 million a year — more than the property itself cost.

Randr

Ventures

Southwest

Key

$ 400,000

Monthly rent

1. Southwest Key loaned $ 6 million to a shell company called Chacbak, run by Rafael Chacon and Ryad Bakalem, to buy and renovate the shuttered Walmart in Brownsville, Tex.

$ 4.5 MIL.

Loan to buy building

Southwest

Key

Chacbak

$ 1.5 MIL.

Loan to remodel

2. Mr. Chacon and Mr. Bakalem then formed a separate company called Randr Ventures. With the aid of a $ 10 million loan from an Arkansas bank, Randr bought the Walmart from Chacbak, essentially selling the property to themselves.

Arkansas-

based bank

Randr

Ventures

Chacbak

Both owned

by Rafael Chacon

and Ryad Bakalem

$ 10 MIL.

Bank loan

3. Randr Ventures used the loan to help pay for more renovations. Then the company rented the property back to Southwest Key, at a rate of almost $ 5 million a year — more than the property itself cost.

Randr

Ventures

Southwest

Key

$ 400,000

Monthly rent

1. Southwest Key loaned $ 6 million to a shell company called Chacbak, run by Rafael Chacon and Ryad Bakalem, to buy and renovate the shuttered Walmart in Brownsville, Tex.

2. Mr. Chacon and Mr. Bakalem then formed a separate company called Randr Ventures. With the aid of a $ 10 million loan from an Arkansas bank, Randr bought the Walmart from Chacbak, essentially selling the property to themselves.

3. Randr Ventures used the loan to help pay for more renovations. Then the company rented the property back to Southwest Key, at a rate of almost $ 5 million a year — more than the property itself cost.

Arkansas-

based

bank

Southwest

Key

Southwest

Key

$ 4.5 MIL.

Loan to buy

building

$ 1.5 MIL.

Loan to

remodel

$ 10 MIL.

Bank loan

$ 400,000

Monthly rent

Randr

Ventures

Randr

Ventures

Chacbak

Both owned

by Rafael

Chacon and

Ryad Bakalem

Chacbak

By The New York Times

Southwest Key lent $ 6 million to a company run by Mr. Bakalem and Mr. Chacon to buy and renovate the building. Mr. Sanchez said that the nonprofit lent money to the developers because bank financing took too long, and that it also collected interest on the loans.

The former superstore reopened as Casa Padre in June, capable of housing more than 1,400 children. Only a tent city built this summer in the Texas desert holds more migrants. The Walmart — where dorm-style bedrooms replaced racks of clothing — was controversial from the start, with advocates calling it unsuitable for children.

Southwest Key pays $ 5 million a year in rent for the former Walmart.

With the family separations came intense scrutiny, jeopardizing the charity’s future. After Southwest Key failed to submit proof of employee background checks in September, the state of Arizona sent a letter threatening to revoke the organization’s shelter licenses. It accused the charity leaders of “an astonishingly flippant attitude.”

Mr. Sanchez dismissed the letter as “pretty dramatic,” calling the failure to submit employee fingerprints a paperwork issue.

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A record of political donations made by Mr. Sanchez and his wife.

But on Oct. 17, Mr. Sanchez donated $ 5,100 to the Arizona Republican Party, which controls the state’s government. His wife gave another $ 5,100. (Their previous political donations totaled no more than $ 2,100, made only to Democrats and liberal causes, records show.) A week later, the state agreed to a settlement that kept most Southwest Key shelters open.

Unbowed, Mr. Sanchez still wants to expand. “We would love to be twice as big as we are,” he said, “because then we could serve twice as many kids as we serve now.”

Manny Fernandez contributed reporting. Susan C. Beachy and Kitty Bennett contributed research.

A version of this article appears in print on , on Page A1 of the New York edition with the headline: Migrant Youths Get Detention. He Gets Richer.. Order Reprints | Today’s Paper | Subscribe

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