Taxpayer Money Wasted on the Border

3-car garage

3-car garage typical of housing project in Ajo, Arizona;
photo courtesy of Department of Homeland Security/OIG

Taxpayer Money Wasted on the Border
| published Sept. 12, 2014 |

By R. Alan Clanton
Thursday Review editor

Americans wasted millions of dollars on luxurious, overbuilt homes along the U.S.-Mexico border, and millions more were spent on vastly overpriced manufactured homes in some of those same areas, according to a report by the Office of Inspector General for Homeland Security.

As part of a long-term strategy to facilitate keeping border patrol agents and other law enforcement personnel close to remote stretches of border in Texas and Arizona—in some cases in areas which may be a three-hour drive from the nearest major city or town—the Customs and Border Protection (CBP) agreed to build living facilities for agents in clustered areas near open stretches of border, or in small towns where adequate housing was unavailable.

The construction program, begun in 2008 and completed—for the most part—in late 2012, enabled additional field agents and law enforcement personnel to live much closer to the areas they would patrol, and placed them into rural and remote towns where they would become a part of the community.

But some of the construction projects, the Inspector General’s report would conclude, cost taxpayers millions more than had been originally intended. One employee housing project in Ajo, Arizona included these problems: vast, premium markups for the land needed, well above the market price at the time of purchase; construction of 21 two- and three-bedroom family-style homes where a more modest apartment complex of one-bedroom units was intended; and a laundry list of high-end amenities and nonessential add-ons which were grafted onto the project without justification or approval.

As a result, the Ajo housing project ran millions past the recommended spending.

But for the construction in and around Ajo, it gets worse. CBP also funded an additional mobile home project, meant as a stop-gap measure to facilitate adequate housing for agents until the homes were complete. Like the housing project, the mobile home park involved gross overpayment for land, as well as the purchase of unnecessary acreage for the 20 manufactured homes. The land was purchased at costs roughly 300% above the fair market value in the Ajo area.

Then there’s the kicker: those 20 mobile homes cost the agency more than $2.4 million—or, roughly $118,000 per mobile home. And those family-style houses cost approximately $680,000 apiece. Pricey, high-end stuff when you consider that, according to the audit, the price of an average family home in Ajo is $86,500.

Which makes those 20 manufactured homes among the most expensive in Arizona, and those 21 houses downright luxurious by the standards of little Ajo—a postcard town only a short drive from the Mexican border, and only a few miles north of the Organ Pipe Cactus National Monument.

The audit estimated that at least $4.6 million was spent unnecessarily on the housing projects.

The CBP housing program began in earnest back in 2008 when the U.S. was facing maximum pressure from illegal border crossings. The long-term plan included similar housing projects all along thousands of miles of border, including in places like Van Horn, Texas; Sanderson, Texas; Presido, Texas; even in Montana on the Canadian border).

Ajo, Arizona was chosen as one of those sites for its proximity to the point-of-entry station at Lukeville, Texas. Lukeville, just across the border crossing from Hombres Blancos and Sonoyta, Mexico, had never been a good option for housing since Lukeville is so small—only a few square blocks, no public facilities (beyond the border station), no schools or churches, and almost no infrastructure beyond what is necessary to operate the point-of-entry facility and a few adjoining paved roads. There are about a dozen homes and other structures—gas stations, convenience stores, state and Federal offices. So Ajo was the next best logical spot, being only a short drive north along Texas 85 (N. Ajo-Sonoita Highway).

But there were problems from the very start, not the least of which were the reports which indicated clearly that Ajo had plenty of vacant housing and numerous empty mobile homes already in place. In fact, some real estate agents in the area complained that the construction of yet more housing made no sense in a city with a 30% vacancy rate. Then, when construction began, neighbors in Ajo were immediately struck by the apparent high-end nature of the homes.

The unusual cost of the project was first reported last year after The Arizona Republic received tips from locals in Ajo and Lukeville.

Photos appeared, showing what were clearly quasi-luxurious family-style homes, complete with condo-type three-car garages, premium stainless-steel appliances, quartz and granite kitchen counters, top-of-the-line plantation shutters, and remote controlled ceiling fans and thermostats. Some of the units have high-end hardwood floors, and others have premium tile floors. The two-and-three-car garages have elaborate loft storage areas. Furthermore, the units include square footage of either 1276, for the two-bedroom homes, or 1570 for the larger homes. The neighborhood was built with covered picnic table sites, permanent-structure concrete and steel picnic pavilions, and built-in bar-b-cue devices, as well as gravel walkways, paved sidewalks, and bike trails. Some of the three-bedroom homes were equipped with separate, upright stainless steel freezers, either in the kitchens or in the garages.

Meanwhile, the mobile home park was ready for occupancy—complete with high-end brand name appliances in brushed stainless steel and glass-top ranges, but as it turned out only two or three of the manufactured homes were ever occupied. The audit now shows that 18 of those 20 mobile homes have been empty for the last one year, which has raised red flags among politicians who want to know why the project was authorized in the first place, and who is responsible for projecting the need for all those homes for border security employees who, as it turns out, would never move there. The multi-bedroom homes, the audit revealed, were probably entirely unnecessary since many of the field agents in the area are single, and the small percentage who are married already own homes elsewhere in Arizona.

The Inspector General also concluded that the vast over-purchase of land for both the permanent homes and the mobile home facility was in direct violation of Federal law. Such large purchases require multiple authorizations, and also require that economic and environmental impact studies be conducted.

Though there is still no evidence that payoffs, bribes or some other forms of corruption was at the root of the misappropriation of so much taxpayer money, some public interest groups (and some real estate representatives in the area) want a deeper investigation into the matter.

The clincher: not only is the majority of those expensive mobile homes still empty, but only a few of the $600,000 homes have ever been occupied—by border patrol officers, their families, or anyone else for that matter.

Related Thursday Review articles:

The U.S. Navy's Bribery Scandals; Earl Perkins; Thursday Review; August 3, 2014.