On an April afternoon three years ago, a state senator gazed upon the highest-ranking official at the Texas Youth Commission and asked, "What's your biggest problem?"

So many possible answers: Dwight Harris, TYC's executive director, could have discussed the ruinously high turnover rate for youth prison guards. Or the dangerously inadequate facilities. Or the climbing numbers of inmate abuse allegations.

"We don't really have a big problem," Mr. Harris replied.

The senator, Houston Democrat John Whitmire, chuckled. So did others at the Senate Criminal Justice Committee hearing. "I'm just curious," Mr. Whitmire said. "How can we help you?"

In his customary low monotone, Mr. Harris answered, "I don't know that there is something that the Legislature can help us with at this point."

Soon there would be. Mr. Harris took instant retirement shortly after TYC's sex abuse scandal went public three months ago. TYC's board was dissolved, its remaining senior managers forced out. And now, the Texas Legislature is trying to rebuild a juvenile justice agency in shambles.

A chain of administrative failures, executive inattention and bureaucratic missteps brought TYC this institutional collapse. State government records, legislative archives and interviews with current and former officials show a breakdown of authority at all levels.

TYC officials consistently exaggerated agency accomplishments while playing down its considerable problems. Legislators repeatedly failed to press the issue. And Gov. Rick Perry's office paid little heed to numerous and repeated warnings.

"I told Perry's office three or four years ago this thing was heading for a crash," said Toby Goodman, a former Republican state representative from Arlington.

Mr. Goodman wrote much of the legislation that revamped and expanded TYC 12 years ago. But he watched, he said, as mismanagement allowed the agency to deteriorate.

"I think they've harmed kids they were given custody of," he said. "I think it's a blight on the whole system."

As is often the case with social services in the state, tight budgets also played a big role. "One of the problems," Mr. Goodman said, "is Texas has always been cheap."

Funding cuts in 2003 were especially damaging, yet top officials kept the happy talk going.

In August 2006, TYC board chairman Pete Alfaro told a Senate committee this about his agency: "I think you will agree with us it's probably one of the very best in the nation and maybe in the world."

Funding ups and downs

The list of outrages at TYC runs deep: Young inmates beating one another while complicit guards look the other way. Witnesses who do not complain for fear of staff retaliation. Not enough guards and too many inmates. Inattentive and poor medical care. Sexual predators operating with abandon.

These conditions could have come from a summary of TYC's current problems. But they were taken from the 1973 findings of U.S. District Judge William Wayne Justice, who declared the agency's treatment of youth to be unconstitutional.

TYC underwent major reforms as a result and was under federal court control until 1984, when it entered a period of relative stability. Then came the 1994 gubernatorial campaign, in which candidate George W. Bush made the spike in violent juvenile crime a major issue.

"So long as we've got an epidemic of crime I think we ought to forget about rehabilitation and worry about incarceration," Mr. Bush said during his successful bid to unseat Democrat Ann Richards.

As governor, Mr. Bush backed expansion of TYC. By 2001, its average daily population had more than doubled to 5,599. The agency's biennial appropriations went from $201 million for 1994-95 to $516 million for 2000-01, including state and federal money.

"It was a very successful package of reforms," said Mr. Goodman, the former state representative.

Then the cuts started. William Bush, a juvenile justice historian – no relation to George W. Bush – described a "short-term burst of funding, enthusiasm and concern," followed by decline. "Once the lights were off," William Bush said, "everybody stopped paying attention to it, and the funding dried up."

TYC officials, noting hiring freezes and fewer inmates than expected, put up little fight. "The good news I bring you is we will be able to meet our 7 percent reduction plan," board member Steve Fryar told the Senate Finance Committee in 2003. "It's been basically a painless operation for us because the need hasn't been there. I'm glad to say that."

Mr. Fryar of Brownwood did not respond recently to a request for comment.

Juan Sanchez, president of Southwest Key Program Inc., traced the fall of TYC to funding cuts for private contract-care facilities in 2003. "They [legislators] closed their ears and eyes and heart to this for at least three years," he said.

Southwest Key, like other private providers, offered services for TYC inmates with special needs. "We did mental health services for kids. We took some sex offenders as well. We took some very violent, aggressive kids and turned their lives around," Mr. Sanchez said.

Funding for Southwest Key, one of the largest private providers for TYC, dropped 25 percent from 2003 to 2005. This year, the organization received 14 percent of what the state paid it four years ago.

Without contract care, Mr. Sanchez said, these juveniles were sent back to state-operated prisons that may not have been equipped to deal with them. "What you began to see is, I think, really an overload of a system that really began to implode because they couldn't handle these kids," he said.

Tony Fabelo, executive director of the Texas Criminal Justice Policy Council, warned legislators in 2003 that the proposed cuts would wreck TYC.

"I paid a price," Mr. Fabelo said: Gov. Rick Perry abolished his agency a few months later.

Even after a riot at the Evins unit in Edinburg in 2004 – one that exposed problems with staff ratios and training that led to physical abuse – cuts continued.

"I will tell you that those [problems] were dismissed by the same people who now are touting themselves as heading up this reform," Mr. Sanchez said.

The Legislature had reduced TYC's funding for 2004-05 by $33 million, or 6 percent. For the 2006-07 biennium, TYC funding was cut again by $4 million.

"Funding issues at TYC have significantly hindered the agency's ability to operate safely and effectively," the Senate Criminal Justice Committee warned in its December 2006 interim report. Two other legislative committees described TYC as a troubled agency that needed more money.

For 2007-08, TYC requested an 11 percent increase. Agency officials said they needed more for better health care and psychiatric services, improved dormitories, hiring of more guards and staff training.

But the Legislative Budget Board, whose co-leaders are House Speaker Tom Craddick and Lt. Gov. David Dewhurst, recommended a 1 percent cut in January.

"I think over the last six years or more there has been a tendency to starve the government and then act like you are being efficient," said state Sen. Rodney Ellis, D-Houston. "And really, what is happening is just covering up problems, just putting a patch and putting some tape – very weak tape – on issues that need some serious public policy discussion and action."

Inadequate prisons

The state's tendency to "starve" its programs can be seen in a number of places at TYC, such as low pay and poor training for guards. Another frequently cited example: the design and location of its prisons.

Inside and outside the system, many agree that the prisons are too big and too institutional. At an August 2006 Senate Criminal Justice Committee hearing, legislators wanted to know why TYC had so many large units in isolated small towns.

"We built some structures that don't lend themselves to the safest management and operation of programming," said Mr. Harris, the executive director.

"Then why," asked Sen. Kel Seliger, an Amarillo Republican, "did we build them that way?"

"Because they were cost-effective to build at that time," Mr. Harris said. "It was a prototype, and we placed it here, here, here and there."

This seemed to puzzle Mr. Seliger. "So essentially," he said, "we built them to save money rather than to perform the function for which they were intended?"

When Mr. Harris struggled to respond, Mr. Alfaro, the TYC board chairman, jumped in. "The answer is yes," he said.

Richard Slack, a former state representative from Pecos who helped arrange the original transfer to the state, said TYC and the local economy both benefited. "It's been there 40 years or so, and doing well," Mr. Slack said.

The prison is in the desert between Pecos and Monahans. Its "insular and isolated" location was cited by TYC investigators as a factor in the sex abuse scandal that has rocked the agency. Two administrators have been charged with molesting teenage inmates; both have pleaded not guilty.

The state auditor's office recommended in March that the West Texas prison "should be evaluated for closure" because it "has limited access to a job applicant pool and social and medical services." Closing it would be a bad idea, Mr. Slack said, because it is one of the major employers in the area. "For the state to just walk off and abandon it, because of what two employees did, that doesn't make sense to me," he said.

Most of TYC's inmates are from the state's urban areas, so putting them in the West Texas desert locates them far from home, and from relatives who might want to visit them.

"This idea of being isolated, I'm isolated and I'm getting along fine," said Mr. Slack, 92, a lawyer and banker. "As far as being close to family, most of these kids don't have families. That's why they're in there."

Nonetheless, it was the West Texas scandal that brought down TYC. Although some key legislators had expressed concerns about the agency, none treated it as a major crisis until the West Texas sex abuse allegations became public.

"It wasn't until this all broke wide open that we found it was a systemwide situation," said Mr. Whitmire.

Lawmakers acknowledge the Legislature rarely addresses problems until they reach the breaking point, though they stop short of saying they were embarrassed into action this time.

But juvenile justice advocates chalk up lawmakers' immediate action this year to the "electric element" of sexual abuse allegations, and the credibility of the Texas Rangers, who conducted the investigation at Pyote.

Once the allegations hit the media, legislators couldn't pretend they were hearing about isolated incidents from an angry parent or an unreliable inmate.

"They had incontrovertible evidence that things were terribly awry," said Isela Gutierrez, coordinator of the Texas Coalition Advocating Justice for Juveniles. "Without it, this might have been another scandal that didn't attract much attention. But the sex, the Ranger – those factors lent increased credibility to the claims of advocates and parents of children in TYC."

The Legislature has before it bills that would remake TYC's management structure and slash its inmate population. But the reforms do not include abandonment of the large prisons in favor of more homelike settings.

"They're making a big mistake," said Alvin Cohn of Rockville, Md., a juvenile justice expert and former consultant to TYC. "They're putting Band-Aids on. ... If you've got an infection, you have to look at the source."

In part, that's because local leaders have urged the Legislature to retain the prisons for economic reasons. It also reflects the state's lingering philosophy toward juvenile offenders.

"Texas is a hard-ass state and they believe, 'Lock 'em up and throw the key away,' " Dr. Cohn said. "We've learned a long time ago that's the worst thing you can do with kids. ... You're going to produce a whole set of adult criminals."

Smoke signals

Once the West Texas scandal came to light, stories of many abuses at other TYC prisons came pouring out: brutal beatings, dozens of sexual assaults, bad medical care and a culture of retaliation that had punished those who tried to call attention to conditions.

These were not new problems, merely unexposed ones. TYC managers had proven adept at keeping their agency unexamined by outsiders. Still, the warning signs were abundant for anyone who cared to look.

Early this month TYC's conservator, Jay Kimbrough, issued a report that, among other things, addressed "speculation over who knew of problems at TYC and failed to take appropriate action."

Mr. Kimbrough went easy on the governor who appointed him, and on the Senate that approved his appointment. In hindsight, he said, "a single letter from a parent about alleged abuse often appears to be a smoking gun."

But in "the daily shuffle of dozens of other issues," he said, "spotting the scattered smoke signals among more than 160,000 other pieces of mail over the year or dozens of other constituent inquiries that day is, in reality, a much more complicated scenario."

The problem, Mr. Kimbrough said, lay with TYC officials: "The smoke signals were clearly visible. The dots should have been connected. TYC's headquarters had the data, and they had the duty."

Many inside and outside the agency blame Mr. Harris, the former executive director. There were times when Mr. Harris, who declined to comment for this story, told legislators of challenges his agency was facing. But he rarely, if ever, made the case with urgency.

"You can't be shy about it," Mr. Whitmire said to Mr. Harris and Mr. Alfaro, the board chairman, at a hearing last summer. "The responsibility ... is with those of you who are in the system to come tell us what you need, and the buck stops here whether we fund it or not. ... Challenge us to fix it, and at least you will have done your job."

Ms. Gutierrez of the Texas juvenile justice coalition said Mr. Harris rarely did that. "He wasn't good at highlighting the negative as a way of demonstrating the agency's need. He would downplay the problems of the agency," she said. "I also got the sense that Dwight was very overwhelmed by the Legislature and their competing demands on him."

He also gave legislators information that agency findings showed to be untrue. More than a year after an internal review revealed multiple breakdowns in TYC's investigation of sexual abuse allegations, Mr. Harris assured the Senate Criminal Justice Committee last August that all was good.

"What we do in terms of investigation is very thorough," he said. "We report everything." The internal review was not distributed to legislators until much later.

Mr. Goodman, the former state representative, said he opposed Mr. Harris' appointment as TYC executive director in 2004. He took his concerns about the TYC board's pending action to the governor's chief of staff, Mike Toomey.

"I said, 'What in the hell are they doing?' " Mr. Goodman recalled. "He [Mr. Harris] was a career bureaucrat. He had never managed an agency of this size. I didn't think he had the personality to do it."

Board members, who are appointed by the governor, chose Mr. Harris anyway.

Legislators made no public complaint then. Nor did they raise alarms in February 2005, when TYC Chief of Staff Joy Anderson notified key legislative aides and the governor's office of the Ranger's investigation in West Texas.

Four days after Ms. Anderson's e-mails, three nominees for the TYC board stood for confirmation before the Senate Nominations Committee. They won approval from the panel without facing any questions about the Pyote investigation.

Over the next two years, no one on the board publicly questioned TYC's handling of the West Texas problems. Since the board was dissolved in March, some members have complained privately that TYC administrators kept crucial information on West Texas from them.

The former board chairman, Mr. Alfaro, and vice chairman, Don Bethel, declined to comment.

Nearly a year before the Ranger arrived at the Pyote prison – as the sex scandal there was building – Randal Chance began sending e-mails to the governor's office. Mr. Chance, a retired inspector general at TYC, had written a book critical of the agency.

"They hire child porn folks who put youth on the internet and hire known child abusers," Mr. Chance wrote to Mr. Perry in December 2004. "No one can control these TYC folks but from your office!"

Diana Mann, a former TYC guard at West Texas, wrote to urge the governor to read Mr. Chance's self-published book, Raped by the State.

"Please try to help staff and kids before it is too late," she said in a June 2004 e-mail to the governor.

No response

It was customary for the governor's office to refer any complaints about TYC to the agency itself for response. But Janna Burleson, a policy analyst for Mr. Perry, e-mailed these instructions to TYC regarding Mr. Chance's multiple messages: "No need to respond to him."

Ms. Mann said she never heard from the governor. "That showed me he didn't care," she said.

In February 2005, when the governor's office learned of the Ranger's sex-abuse investigation in Pyote, a 36-year-old junior staffer named Alfonso Royal was Mr. Perry's liaison to TYC. He had been on the job just over three months.

One of 32 analysts in the governor's budget office, Mr. Royal has refused to comment. His office calendar and e-mail records show more than 20 contacts with TYC officials or board members between February 2005 and February 2007.

Mr. Royal's job was to be the governor's eyes and ears with TYC, said Robert Black, Mr. Perry's press secretary. "The governor expects the budget, planning and policy folks to be problem solvers. They have some latitude – a lot of latitude, actually – to work with the state agencies to solve problems to implement law, to govern," he said.

During that two-year period, records show, Mr. Royal had two one-on-one meetings with Mr. Harris, the TYC executive director. He also met with unnamed TYC staff members, visited two TYC units and attended 11 TYC board meetings.

From June 2005 until October 2006, Mr. Royal learned no new information on the West Texas investigation, and the governor's office believed it was proceeding, Mr. Black said.

But around Nov. 1, 2006, Alison Brock, chief of staff for Rep. Sylvester Turner, D-Houston, told Mr. Royal that there had been no movement on the case and provided him with a copy of Ranger Brian Burzynski's graphic 229-page report. "He was concerned," she recalled.

The governor's spokesman said that when Mr. Royal found out, "he did what he thought was the right thing to do and that was to call the DA and call the Ranger, call the AG. He did what he thought was actionable and what we would expect him to do."

It was not clear whom in the governor's office Mr. Royal told about the West Texas investigation, or when. Mr. Black at first said he told no one, then said he assumed Mr. Royal had informed senior staff during the 2005 legislative session and again late last year.

Gov. Perry was never informed, Mr. Black said.

Max Sherman, dean emeritus at the LBJ School of Public Affairs and a former special counsel to Gov. Mark White, said delegating such authority to a midlevel staffer was unusual. "You would assume, normally, it would have been reported up," Mr. Sherman said. "It would have been reported to the highest levels. ... And any good chief of staff is going to make sure the governor is apprised."

Ms. Brock said Mr. Perry's office had a history of disinterest in TYC matters, but she found it "hard to imagine" that Mr. Royal kept silent about Pyote.

Mr. Perry said he learned of the TYC scandal in February 2007 – but not from his staff. "The first time I knew about it was when I read about it in The Dallas Morning News," he told Texas Monthly.

The governor refused several requests from The News for an interview regarding his handling of TYC. "He is not one normally who looks back," said his press secretary. "After you try to understand what went wrong, why not move forward to fix it?"

The behavior of the governor's office is troubling to Mr. Ellis, the Houston senator.

"If that's an indication of how business is conducted," he said, "you gotta wonder what other problems are out there."

Staff writers Emily Ramshaw, Gregg Jones and Jennifer LaFleur and staff researcher Darby Tober contributed to this report.