Southwest Key, Known for Migrant Shelters, Cashes In on Charter Schools

After years of pressure by students, parents and officials, the charters hired another provider at lower cost. The new vendor charged $2.86 per lunch in 2017, a drop from the $3.25 charged by Café del Sol in 2015. School board minutes have showed no further complaints.

Although Promesa’s school board is supposed to be an independent watchdog, Southwest Key has effectively controlled it. For years, the board has consisted of Mr. Sanchez; another charity executive, Alexia Rodriguez; Mr. Sanchez’s longtime friend and real estate partner, Ruth Hsu; and a Latino activist and retired disc jockey. Two new members joined last month. It was not clear what Mr. Sanchez’s resignation at Southwest Key meant for his role on the school board.

Southwest Key had a pattern of hiring officials with questionable pasts, The Times found, and in 2011 the school board hired a superintendent, Joe Gonzales, who had been indicted almost a decade earlier for embezzlement. Seven of the eight counts were dropped, and Mr. Gonzales agreed to reimburse the school district to settle the eighth. He had left another job with a buyout after being suspended over alleged financial improprieties.

“We hired him because he was good at what he did,” Mr. Sanchez said in a September interview.

A former board member, Martha Cotera, said the board had not been informed of Mr. Gonzales’s past, though he told The Times that he had notified his employers about the indictment. He also said he had contested the claims of financial improprieties. “In every single case, I was right,” he said.

After Mr. Gonzales was hired, one of the charity’s for-profits, Southwest Key Green Energy & Construction, signed on a new subcontractor, SJ&G Contractors, for “management and operational support.” The company was one person: Steven J. Gonzales, Mr. Gonzales’s son, who reported directly to Mr. Sanchez, records show.