On Tuesday, during a joint appearance with his brother Julián at the LBJ Library, Joaquin Castro explained why the federal government hasn’t been receptive to Texas’s offer to accept federal funds for Medicaid expansion if they come in the form of a block grant with no strings attached.

“You would simply turn over $100 billion to Rick Perry?” said Castro, who spent ten years in the Lege before being elected to Congress last fall. “The governor has not shown that he’s the best steward of some of this money.”

Just look, he added, at CPRIT—the Cancer Prevention Research Institute of Texas, which was funded by several billion dollars’ worth of bonds in 2007, designed and managed by Texans, and is currently under fire for a variety of crimes against the public interest: mismanaging grants, conflicts of interests, and when questioned, clamping down and resisting investigation, or even, as Castro noted, “something as basic as an audit.”

The saga is still unfolding. On Wednesday the Texas Senate unanimously passed a bill, authored by Jane Nelson of Flower Mound, to reform the agency; among other things, the bill would require CPRIT to hire a compliance offer.  Earlier in the day on Tuesday, officials at the Texas Cancer Coalition, the nonprofit foundation that was created to support CPRIT and has recently been trying to distance itself from the agency, told legislators that the foundation would be out of business within 60 days. And on Monday, the state attorney general’s office announced that it was opening a second investigation into the agency.

Castro’s comments were the latest sign that the fallout from the CPRIT scandal may linger, regardless of what happens to the struggling agency itself. For many Texans, the scandal is evidence—or further evidence, as the case may be—that the state’s leadership isn’t reliable. CPRIT’s shadow has loomed over the current legislative session, most notably in discussions over the governance structure of the Texas Water Development Board, which is slated to get some $2 billion in the 2014-2015 budget.

Even those Republicans who see the CPRIT situation as an anomaly should understand it as a cautionary tale. Last month, when statewide leaders announced that the agency would be allowed to move forward with some of the research grants it had been negotiating at the time the scandal broke—a moratorium on grantmaking had been imposed in February—CPRIT’s interim executive director explained it as a sign that the agency had regained some measure of public trust: “We take this action as evidence that some progress has been made, and we will continue to work to strengthen this trust during the coming weeks and months.”

Some progress, maybe, but it will be an uphill road. Legislators on both sides remain angry at CPRIT. “It would be my preference to eliminate CPRIT after this debacle,” said Kevin Eltife, a Republican senator from Tyler, during the Senate debate over Nelson’s bill. The financial waste is clear. The damage to the state’s credibility might have even greater costs in the years to come.