DHS Watchdog Now Probing How Kristi Noem Spent $1 Billion on Warehouses With No Plumbing or Zoning Permits

The Department of Homeland Security's inspector general has launched a formal audit into roughly $1 billion (£748 million) worth of warehouse purchases made under former Secretary Kristi Noem, targeting properties that don't have working plumbing, aren't zoned for detention, and have yet to hold a single detainee.

A $38 Billion Programme Under the Microscope

The DHS Office of Inspector General confirmed to the Wall Street Journal that it recently announced an 'audit of ICE's acquisition of detention space,' a review that will cover all 11 vacant warehouses US Immigration and Customs Enforcement purchased over just a few months last winter. The programme, formally known as the ICE Detention Reengineering Initiative, was funded through the One Big Beautiful Bill passed by congressional Republicans and planned to dedicate $38.3 billion (£28.6 billion) to retrofitting commercial warehouses into detention centres capable of holding more than 92,000 detainees.

'DHS OIG can confirm this audit was announced recently,' a spokesperson said. 'However, as a matter of course, we do not provide any additional information publicly on the scale or scope of our ongoing work.'

Taxpayers Paid a Premium for Empty Buildings

Commercial real estate analytics firm CoStar found that ICE paid 11% to 13% above market value for the first 10 properties it purchased. Based on those figures, the overpayment totalled an estimated $107 million (£80 million) in taxpayer money across the acquisitions.

The Salt Lake City warehouse stood out as the costliest example. ICE paid $145.4 million (£109 million) for the 833,000-square-foot (77,388-square-metre) facility in March, despite a 2025 tax-assessed value of $97 million (£73 million). That gap of nearly 50% dwarfed anything CoStar had found in its earlier analysis of the other purchases.

Comparable properties told a different story. A similar one-million-square-foot (92,903-square-metre) warehouse built in the same area sold to Walmart for $112 million (£83.7 million), below its assessed value, CoStar records showed. Local brokers in Salt Lake City called the ICE deal 'unheard of,' with one telling Building Salt Lake that the $174-per-square-foot (£1,402.2-per-square-metre) price tag was far above the going rate.

No Experience, No Problem

The spending questions extend beyond real estate. Nearly 50 contractors have received a combined $1.7 billion (£1.27 billion) in federal contracts to acquire, renovate, and operate the facilities since January 2025, the Wall Street Journal reported. Several of those firms had no prior experience in federal immigration detention. Four had never held any federal contract at all before being brought into the programme, with their deals worth up to $500 million (£374 million) combined.

George Zoley, executive chairman of the GEO Group, one of the government's primary detention contractors, warned investors in February about the practical challenges of converting warehouses. 'As far as the physical plant renovations of a warehouse to get it operational, it's complicated, and then the operational implications of how you manage such a facility, particularly a large-scale facility, is going to be concerning,' he said.

Lawsuits, Pauses, and a Growing Paper Trail

None of the warehouses is currently operational. Several face active legal challenges. In Arizona, the state attorney general sued in April to block a $70 million (£52 million) warehouse in Surprise from becoming a detention centre. In Washington County, Maryland, a judge halted a $102 million (£76.2 million) facility until an environmental review is completed. In New Jersey, a Roxbury Township project was paused this week after the state filed suit over violations of the National Environmental Policy Act.

DHS Secretary Markwayne Mullin, who replaced Noem in March after she was fired by President Donald Trump, paused the entire warehouse initiative upon taking office. But the properties already purchased remain federal assets and now sit at the centre of the inspector general's expanding inquiry. That inquiry also includes a separate investigation into a $220 million (£164 million) taxpayer-funded advertising campaign featuring Noem and into allegations that her unofficial chief of staff, Corey Lewandowski, demanded payments from contractors in exchange for protecting their federal deals.

The $38 billion in funding came directly from the One Big Beautiful Bill, meaning every dollar overpaid on an empty warehouse is a dollar that didn't go to schools, roads, or veterans. So far, taxpayers have spent $1 billion and gotten buildings that can't flush a toilet.