TYC and company officials defended the contract, insisting that the payments were proper and appropriate.
"There are two ways to cover startup costs: pay upfront or pay higher rates," said Cherie Townsend, the Youth Commission's executive commissioner newly appointed by Perry.
Gov. Rick Perry's office and legislative leaders strongly disagree.
"Taxpayers should not be paying for goods and services they don't receive. And we shouldn't be paying for the startup costs," said Perry spokeswoman Allison Castle.
"This is absolutely outrageous. Somebody ought to be investigating this and heads ought to be rolling," said state Sen. John Whitmire, D-Houston, chairman of the criminal justice committee.
Under the terms of the contract, the Youth Commission agreed to lease up to 132 beds for $189.50 per youth per day, guaranteeing they would pay for 119 beds starting on the date the contract was signed. Over a span of three months, that totals more than $2 million, but records indicated that the state had paid the company only about $1.26 million as of Thursday.
Attributing recent delays in filling the prison to inspection issues, Townsend said 18 youths were to be transferred to the Eagle Lake site Friday. Plans call for it to house more than 100 offenders in the future.
Townsend said she is reviewing possible modifications to the contract -- without citing specifics.
The contract question was the latest in a long string of negative news for the TYC, which Perry moved out of state conservatorship just this week. The agency was placed in conservatorship in spring 2007 after allegations surfaced of sexual abuse of inmates and a cover-up by agency officials.
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