AUSTIN - A year and a half before a no-bid state contract collapsed in scandal last month, a criminal investigation into tens of millions of dollars worth of deals awarded through a similar process by Rick Perry's administration was derailed by the funding veto that got the governor indicted, according to the prosecutor who led the probe.

The earlier inquiry, which concerned Texas Department of Public Safety contracts for Perry's highly touted and controversial border-security program, lasted more than a year before abruptly shuttering, said Gregg Cox, director of the Public Integrity Unit at the Travis County District Attorney's office.

"We lacked the resources to continue that investigation," Cox said. "Because the staff was cut when our budget was vetoed."

Perry vetoed $7.5 million in state funding for Cox's office in June 2013, saying at the time he had lost confidence in District Attorney Rosemary Lehmberg after she was arrested for drunken driving, pleaded guilty and spent three weeks in jail. The governor was indicted last year on abuse of office and official oppression charges, which he and his lawyers have denounced as a politically motivated farce.

The unit pulled together enough money to maintain operations at a reduced level. Previously, officials had said the only disrupted investigations related to motor-fuels tax violations and other routine matters.

The revelation of the investigation of the earlier no-bid contract and its sudden death provide the first confirmation of what Perry's veto spiked.

It also indicates that contracting problems could stretch far beyond - and above - the state health commission now under scrutiny.

Perry spokeswoman Lucy Nashed said the veto was the only way he could hold the unit accountable to taxpayers.

"The governor vetoed this funding for no other reason than the fact that despite the otherwise good work of the Public Integrity Unit's employees, he could not in good conscience support continued state funding for an office with statewide jurisdiction at a time when the person charged with ultimate responsibility of that unit has lost the public's confidence," Nashed said.

The news also raises questions about whether a continuation of the inquiry could have alerted officials much earlier to vulnerabilities in no-bid contracting processes.

The Department of Public Safety contract went through a similar process to the one used for the scandal-ridden Medicaid fraud detection deal given by the Texas Health and Human Services Commission to Austin technology company 21CT. The process used for the latter, called the "Cooperative Contracts" process, allows state agencies to bypass competitive-bidding, but was designed for smaller purchases.

That Medicaid fraud contract, which eventually was set to cost $110 million before being canceled last month, already has led to the resignations of four high-ranking state health officials, led some lawmakers to call for Executive Commissioner Kyle Janek to step down and triggered investigations by Cox's Public Integrity Unit, Gov.-elect Greg Abbott and the State Auditor's Office.

Officials said the earlier Public Integrity Unit investigation focused on more than $20 million in no-bid contracts given to Virginia defense contractor Abrams Learning and Information Systems Inc. to help Texas develop its border security strategies.

The Virginia firm, founded by retired Army Gen. John Abrams, initially got a $471,800 contract in March 2006 to help the state establish a Border Security Operations Center in Austin, according to state documents. The deal went through the no-bid process because officials said it was in response to "an emergency."

An internal memo that later surfaced in news reports showed that the declaration of an emergency was based on public statements by Perry, who at the time was in a tough re-election campaign in which border security was a big issue.

Three months after its first contract, Abrams received a second emergency deal, for $679,600, that greatly expanded the company's responsibilities.

Over time, state records show, officials quietly added more and more responsibilities to the contracts until they grew to more than $20 million and covered work in most segments of the state's growing border-security programs.

The Abrams contracts were not the only questionable deals awarded by the Department of Public Safety.

Another Public Integrity Unit investigation, focused on the department's State Administrative Agency, had found that officials were not offering competitive bidding as they added responsibilities to an agreement with the North Central Texas Council of Governments in Arlington.

That inquiry forced the termination of the contract and resignation of two top department employees. A Travis County grand jury looked into the case, but took no action, Cox said.

The Abrams investigation did not get a chance to get that far.

State Sen. Jose Rodriguez, who in March 2012 asked State Comptroller Susan Combs to review the Abrams contracts, said he did not know about the Public Integrity Unit probe until being told by a reporter Friday.

Rodriguez, D-El Paso, said Combs did conduct an audit of contracting at the department but barely mentioned Abrams, letting the issue fall from public attention.

The fact that Perry's veto shut down the Public Integrity Unit probe "raises alarming concerns," the senator said.

"The governor maintained publicly that he was vetoing the budget simply because of the DUI conviction, but if - and I emphasize if - if one of the motivating factors was this ongoing investigation on the DPS contracting procedures, then I think Gov. Perry has a lot to answer for," he said.

Rodriguez said he saw a lot of similarities between the Department of Public Safety contracts and those awarded by the Health and Human Services Commission - including that both Abrams and 21CT had little experience in the field before getting the deals.

Abrams and 21CT also are similar in that both have done border-security work. A 21CT spokesman said the company has contracted with the federal government for services on the southern border, but he declined to provide any details, calling the work "top secret."

The most significant way in which the two sets of contracts are similar, however, may be that both were awarded by state agencies that heavily rely on the no-bid "Cooperative Contracts" process.

The Texas Health and Human Services has used the process far more often than any other state agency in the past two years, according to a Houston Chronicle analysis of more than a million records of purchases. It has put $260 million worth of projects through the process in that time, according to the analysis.

The Department of Transportation used the process the second most, for $115 million worth of contracts, according to the analysis.

The DPS placed third, with $99 million.

Rodriguez said he hopes renewed public attention will lead state officials to reform contracting policies across all agencies.

Already, several lawmakers have introduced proposals to improve policies and Abbott has pledged to prioritize reform.

"This calls into question contracts in every agency," Rodriguez said. "We have to address this."