America's federal watchdog has launched a formal audit into how the Department of Homeland Security spent nearly £760m ($1bn) buying warehouses at above-market rates, targeting Kristi Noem's £28.6bn ($38.3bn) plan to overhaul ICE detention.
The Department of Homeland Security's Office of Inspector General confirmed it is reviewing ICE's acquisition of detention space, focusing squarely on the ICE Detention Reengineering Initiative that Noem championed during her 14-month tenure. The programme, funded through the One Big Beautiful Bill and designed to house more than 92,000 detainees in converted industrial warehouses, drew bipartisan criticism long before the watchdog stepped in.
Federal scrutiny now extends to the contractors hired to carry out the plan, several of which had no prior experience with federal immigration work at all.
The Detention Reengineering Initiative
Formally known as the ICE Detention Reengineering Initiative, the programme set aside £28.6bn ($38.3bn) to convert vacant commercial warehouses into large-scale holding facilities across the United States. Under Noem, ICE acquired 11 warehouses in the space of a few months, with DHS planning to hold as many as 8,500 detainees in individual sites in Arizona, Pennsylvania, Georgia and Texas.
The Wall Street Journal is reporting that the DHS Inspector General just opened an audit into a $38 billion warehouse-to-detention scheme that Kristi Noem and her top adviser Corey Lewandowski rammed through.
— Mike Levin (@MikeLevin) May 24, 2026
ICE bought 11 vacant warehouses in a matter of months, paying 11 to 13…
The properties were not purpose-built for detention, and many lacked proper zoning approvals, working plumbing and the emergency infrastructure required to house thousands of people, The Wall Street Journal reported.
Lawmakers from both parties questioned whether the purchases made financial sense at all. Acquiring and retrofitting existing correctional facilities would have been faster and required far less reconstruction than converting industrial shells, congressional critics argued.
New Hampshire Governor Kelly Ayotte and Senator Roger Wicker of Mississippi were among the Republicans who publicly voiced opposition to specific sites.
CoStar's Overpayment Data and Salt Lake City Outlier
Commercial real estate analytics firm CoStar found that ICE paid between 11% and 13% above market value for the first 10 properties it purchased. Across those acquisitions, the estimated overpayment reached approximately £80m ($107m) in taxpayer money. The individual figures behind that average are starker still.
ICE paid £109m ($145.4m) in March 2026 for an 833,000-square-foot warehouse in Salt Lake City, despite a 2025 tax-assessed value of £73m ($97m) — a gap approaching 50%. The seller was RREEF CPIF 6020 W 300 S, a Delaware entity linked to a subsidiary of Deutsche Bank.
One Salt Lake City industrial broker, speaking on condition of anonymity, told Building Salt Lake that the £133-per-square-metre ($174-per-square-foot) purchase price was 'unheard of,' explaining that the market for large industrial buildings in the area typically settles between $100 and $110 per square foot.
For comparison, a one-million-square-foot warehouse built in the same area in 2022 was acquired by Walmart in mid-2025 for £83.7m ($112m), below its assessed value. The Salt Lake City warehouse had sat vacant for years before DHS completed the deal just six days after Trump announced Noem's removal.
Inexperienced Contractors and Lewandowski Probe
The OIG audit also extends to contracting decisions tied to the programme. Nearly 50 firms received a combined £1.27bn ($1.7bn) in federal contracts to acquire, renovate and operate the facilities since January 2025, according to the Wall Street Journal. Four of those firms had never previously held any federal contract before being brought into the programme, yet their combined deals were worth up to £374m ($500m).
Running parallel to the audit is a separate OIG investigation into the role of Corey Lewandowski, Noem's top adviser who served as an unpaid special government employee and allegedly acted as a de facto chief of staff at DHS. NBC News reported that Lewandowski told GEO Group founder George Zoley during the transition that he wanted to be paid in exchange for protecting the company's DHS contracts. Lewandowski has denied the allegations through a spokesperson.
'Mr. Lewandowski may have used his position in the Trump Administration and close relationships to President Trump and Secretary Noem to enrich himself while serving as a special government employee,' a congressional letter cited by NBC News stated. Investigators also searched the office of Kara Voorhies, a contractor who worked closely with Lewandowski and held unusually broad influence over DHS contract reviews, according to the Wall Street Journal.
Jessica Tillipman, associate dean for government procurement law studies at George Washington University, described the situation as 'a blazing red flag of procurement integrity concern.' Even GEO Group, one of ICE's largest detention operators, expressed reservations. The company's executive chairman George Zoley told investors in February that warehouse conversions would be 'complicated' and that 'the operational implications of how you manage such a facility, particularly a large-scale facility, is going to be concerning,' according to a quarterly earnings call transcript reported by NOTUS.
Programme Halted, Oversight Escalates
When Markwayne Mullin succeeded Noem and was sworn in on 24 March 2026, he immediately suspended the warehouse initiative. None of the purchased sites had been converted into operational detention facilities at the point of the pause.
The DHS OIG, which had previously accused DHS of systematically obstructing its work across 11 documented instances, confirmed the new audit in a brief statement: 'DHS OIG can confirm this audit was announced recently. However, as a matter of course, we do not provide any additional information publicly on the scale or scope of our ongoing work.'
Mullin vowed during his confirmation hearing to cooperate with the inspector general to the extent required by law. Democrats have separately called on Noem to testify before Congress on allegations of perjury, a demand she has not yet formally addressed.
The audit will determine not just how £760m in public money was spent on 11 empty warehouses, but what the £28.6bn expansion of American immigration detention was ever truly meant to achieve.
