Inquiry Into Migrant Shelters Poses Dilemma: What Happens to the Children?

A difficult situation for migrant children in government custody could grow more challenging if the largest provider in the overburdened shelter system were to lose its grants.

The provider, Southwest Key Programs, faces mounting pressure after a video of staff members abusing children surfaced last month and the Justice Department opened an investigation into its finances. State and federal officials have cracked down on suspected malfeasance at shelters in the past year, closing multiple facilities, including two run by Southwest Key, and moving children elsewhere.

But taking any broader action on Southwest Key, a nonprofit that houses almost a third of detained migrant youth, would be a balancing act for officials as they tried to avoid tipping an overstressed system into chaos. Without adequate shelter space, minors remain stuck at border stations ill-equipped to care for them. After the recent deaths of two children in Border Patrol custody, the stakes have never been clearer.

About 12,400 migrant children are now housed across roughly 100 permanent sites and two temporary ones. That’s down from the record level of almost 15,000 last month, largely because the Trump administration relaxed its rule requiring fingerprints for every member of a household sponsoring a child.

By any measure, Southwest Key is the industry juggernaut. The Austin-based charity operates 24 permanent facilities in Texas, Arizona and California. One of those is the nation’s largest permanent shelter, a converted Walmart Supercenter in Brownsville, Tex., that can house more than 1,400 minors.

Southwest Key, which has pulled in $1.7 billion over the past decade, is being investigated by the Justice Department after a New York Times article documented possible financial improprieties and poor management. The charity stockpiled tens of millions in taxpayer dollars with little government oversight, possibly engaged in self-dealing with top executives and paid them significantly higher than the federal salary cap for migrant shelter grants.

But if the federal government revoked its grants, there would not be enough room in the crowded system to absorb the children under its care. Officials would need to find another provider to take over Southwest Key’s shelters, or find new facilities altogether.

Maria Cancian, a former deputy assistant secretary for policy in the Administration for Children and Families, said if a large provider had lost its contracts under her watch, she would try to maintain as many of the provider’s staff and facilities as possible.

“The logical thing to do to maximize safety and minimize waste of public funds would not be to immediately shut down an enormous number of shelters,” Ms. Cancian said. “The best course of action would be to figure out a plan for transitioning those facilities and transitioning those personnel.”

The Office of Refugee Resettlement, the agency that oversees migrant shelters as part of the Administration for Children and Families, declined to speculate on Southwest Key’s grants. In response to a question asking if the agency had a plan if the charity were to lose its grants, a spokeswoman said the agency was always planning for unforeseen events.

A Southwest Key spokesman, Jeff Eller, said the charity had had no discussions about losing its grants with the Office of Refugee Resettlement or about its shelter licenses with officials from Texas, Arizona or California. He said the charity was focused on providing “the best care possible” for children.

Last year, the government cut off the contracts of another major shelter provider, International Educational Services, over suspected financial improprieties. Juan Sanchez, who founded Southwest Key and still runs it, also helped establish I.E.S., although he has not had a role there for decades.

The closing of I.E.S. facilities was carried out haphazardly, straining the system for months. As many as 620 children needed to be rehoused; most landed in Southwest Key facilities.

Comprehensive Health Services, a for-profit company based in Florida that ran one of the temporary shelters, leased three former I.E.S. shelters, all in the Rio Grande Valley in Texas, and then received a new government contract. Many original staff members were rehired.

Two Southwest Key facilities closed last year — including the shelter where staff members were caught on video abusing children — as part of a settlement with Arizona after the charity failed to provide proof that its workers had received required background checks. Those shelters could house more than 500 children. Southwest Key’s six remaining shelters in Arizona also can no longer accept new children until the state says otherwise.

If the government ends up seeking a provider to take over Southwest Key’s remaining shelters, Comprehensive Health Services, a workplace medical contractor that has provided support during emergencies, is a likely alternative. But the company has also been accused of improperly handling government money.

In February 2017, Comprehensive Health Services paid a settlement of almost $4 million over improperly charging the government for medical screenings. The company said the overbilling was a mistake.

The country’s second-largest provider, a San Antonio-based nonprofit called BCFS, seems unlikely to take over all Southwest Key’s shelters. Its primary focus has long been disaster relief and international aid, and the nonprofit has faced daily protests for running a sprawling tent city in Tornillo, Tex.

The government may also try to delay deciding on Southwest Key contracts until it reduces the number of children in federal custody — or, at the least, reduces the number of children placed with Southwest Key.

A major reason for the shelters’ overcrowding was the administration’s decision in June to require fingerprints for every member of a household that wanted to care for migrant children. As fingerprinting slowed placement, the average length of time children spent in shelters stretched from about a month to nearly two.

In December, the Trump administration relaxed the fingerprinting requirements. The tent city, scheduled to close by Jan. 15, has already been reduced from 2,850 children to 1,500. In November, Southwest Key housed as many as 5,000, but as of Friday, there were only 3,900.

Still, the temporary shelter run by Comprehensive Health Services is expanding, from a capacity of 1,350 to 2,350 children.

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