Since late 2008, ProPublica has been writing about lapses in care at facilities run by Psychiatric Solutions Inc., the nation’s leading provider of inpatient psychiatric care.

Recently, two Virginia newspapers, The Virginian-Pilot of Norfolk and The Richmond Times-Dispatch, have published investigative stories about how PSI’s political clout there – the company was a major donor to the former and current governors – may have led to special treatment from state officials.

In a series of editorials last month, the Pilot exposed extensive problems at The Pines, a PSI-owned youth residential treatment center in Portsmouth, including medication errors and efforts by staffers to cover up mistakes and serious patient injuries.

The Times-Dispatch found that state regulators initially recommended downgrading the facility’s license to provisional status in spring 2009 but were blocked by the state mental-health commissioner.

Instead, regulators reached a “memorandum of agreement” with PSI in which the company agreed to a series of corrective steps, most of which it had been legally obliged to take anyway, such as providing accurate information to the fire department. The commissioner told the Times-Dispatch that the gubernatorial administration’s policy was to balance enforcement with encouraging the private sector to run facilities in Virginia.

That goal was more urgent because the governor at the time, Tim Kaine, like officials in many cash-strapped states, had floated a proposal to consider privatizing some of Virginia’s mental-health services. Nationally, the number of beds in state and county psychiatric hospitals dropped by almost half from 1998 to 2008, according to unpublished government data. Several states have sold or transferred mental-health facilities to private operators.

PSI may have been central to a plan to sell or replace two of Virginia’s facilities for youths. Shortly after touring one of them with Kaine’s health secretary, company officials told the state they wanted to run a facility of identical size in the same city, the Times-Dispatch reported, based on internal government e-mails.

Later, the newspaper found, staffers in Kaine’s office were involved in suppressing portions of a report in which state mental-health experts recommended against eliminating the state facilities and concluded that private providers weren’t adequately meeting the needs of youths.

PSI officials declined to comment to ProPublica on the allegations in the newspapers. The Pines’ chief executive, Wes Mason, showed the Pilot’s editorial writer around the facility to demonstrate improvements.

Since the stories were published, the legislature has halted the move to privatize mental-health services, Times-Dispatch reporter Dave Ress said.

PSI’s plans in Virginia may have taken a turn for a separate reason. In May, the company agreed to be acquired by Universal Health Services Inc., another large operator of hospitals and psychiatric facilities.

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