THEIR names are Annie, Alan, Christine, and Shawn. They are children of the state. These children are among the neediest Americans. The state takes custody of them because, like Annie, they are abused or neglected by their parents. Or, like Alan, they are young delinquents in need of supervision and reform. Like Christine, they are runaways and street kids. Like Shawn, they are homeless.

In their cases, the states in question are Louisiana, California, Massachusetts, and Oregon. But every state in America has children like these four, and any state, with court sanction, may intervene in the lives of its youngsters in trouble to protect them.

But when the state steps in to become the care-giver, it is sometimes a pathetically poor parent. Indeed, America's system of state care is almost as likely to hurt these children as it is to help them. A six-month Monitor investigation, which included interviews with judges, lawyers, social workers, foster parents, probation officers, and other recognized experts across the nation, as well with more than 50 children who have spent time in state care, revealed:

The foster-care system, which is supposed to protect abused and neglected children, can be an abusive and neglectful parent itself.

The detention system, intended only to hold children pending a court decision on their futures, is sometimes used to punish youngsters - before they have been found guilty of any crimes.

Most ``reform schools'' for delinquents, especially the largest institutions, don't reform. Many delinquent youths emerge from state-run institutions more criminally sophisticated than they went in.

At least half of all runaways in the United States have fled from foster homes, group homes, correctional institutions, or some place other than their own homes. Many of these children choose to live on the streets rather than go back to the ``system.''

Of America's estimated 63.5 million children under 18, only a fraction of them will confront the system of state care this year. Determining how many youngsters are in government custody is nearly impossible. Not all states collect such data, and each state uses its own method of reporting. Some children may be counted more than once; others not at all.

The most recent figures available, however, indicate more than 2 million children are likely to spend some time in state custody over the course of a year. Of these, 453,000 are in foster care, and at least half a million are in public juvenile facilities such as detention centers and correctional institutions. Perhaps as many as 500,000 are runaways fleeing a placement in the system. In addition, 737,000 reports of child abuse and neglect were substantiated in 1986, and many of these children probably received state or local services even if they were not legally placed in custody.

Periodically, in various newspapers across the nation, the headlines scream of children killed in foster care, of children beaten to death by abusive parents despite state intervention, and of disturbed foster children who kill other children. Americans read of girls who are sexually molested in group homes, of youth held in isolation cells for weeks, of scared teen-agers who hang themselves in jail, and they are outraged.

These tragedies are not isolated incidents. Rather, they are symptoms of deeper problems - of a widespread malaise in America's system of state care for its troubled kids. And, despite the glaring headlines, it is a system that remains largely hidden from public view.

In a perverse twist, privacy laws that are intended to protect the children sometimes protect the system instead. Juvenile court records are closed to the public, and juvenile case histories are off limits - all this to protect the best interests of the child. But, by wrapping itself in the cloak of confidentiality, this huge, bureaucratic system avoids scrutiny.

The people who toil deep in the heart of the system - social workers, probation officers, corrections officials, and juvenile-court judges - say they are being stretched thin by too many kids, too much paper work, and too few resources. Indeed, the Monitor investigation found that high staff turnover, low salaries, and low morale permeate the state-care systems across the US.

Many workers interviewed for this series say children who enter the system today are much more troubled than at any time in the past - making their jobs doubly difficult. The growing numbers of children with histories of drug abuse, mental illness, emotional disturbance, and homelessness do not fit into the niches carved out by the system. Some of them languish in juvenile halls or other institutions, these workers say.

As Judge Leonard P. Edwards sees it, ``they're all the same kids, but they come into the system through different doors.'' Some children enter through the mental-health door. Others come via the schools. Some youngsters commit crimes, entering the system as delinquents. Others are labeled ``dependents'' because they are abused, neglected, or in need of care.

No matter which ``door'' the children enter, half of all juvenile-court cases in his jurisdiction involve drug or alcohol abuse by the child or by the family, says Judge Edwards, who presides over juvenile court in California's Santa Clara County.

``There is a great overlap and a certain arbitrariness that leads to one kid being labeled X and the other kid Y,'' he says. ``If you want the system to do the job, you have to get all the agencies talking the same language.''

All children who enter the system of state care are first funneled through juvenile courts. The system confronts a difficult, messy job, as a few days in juvenile court reveal. All the children's names have been changed to protect their identities, but their cases are real.

ELEVEN-year-old Tina sits at a table in Judge Edwards's courtroom, listening to her mother's excuses. The mother testifies she missed the court-ordered appointments for drug testing because she's been working 15-hour days at a new business, she doesn't have transportation, and she's getting a doctor's permit for marijuana use anyway.

Tina, whose blond hair is neatly braided just like her mom's, has already been declared a neglected child. She doesn't live at home now, but in a group home for girls in another county. The court's goal is to reunify mother and daughter, but the judge wants assurance that Tina's mom is no longer using cocaine or other drugs. He leans over the bench and, through wire-rims, fastens his gaze on the mother. Then he lays down the law.

``Before overnight visits can begin, you have to test clean and attend counseling once a week for at least a month or two,'' Edwards says.

``Do you understand?''

The mother assures him she will do better, and the case is rescheduled for review. Later, out in the waiting room, Tina clutches at her mother's hand. Maybe, if she holds on tight enough, her mother will choose Tina over the drugs.

Across the country, 17-year-old Donald appears in Alameda County Juvenile Court in Oakland, Calif. - in red sneakers, blue T-shirt, and corn rows. He's charged with trespassing and battery. The county probation officer recommends that Donald be placed in a group home, but the district attorney argues that the boy should be committed to one of the state's huge correctional institutions.

Donald has been in trouble with the law before, and his grandmother testifies she can't control him, because ``he's gotten involved with drugs.'' No mention is made of Donald's parents.

Judge Wilmont Sweeney weighs the testimony and decides on the group-home option. During the two weeks it takes the county to find a placement, Donald will live with his grandmother. She says she'll take him if he'll abide by the probation department's rules - 10 p.m. curfew, urinalysis on request, room and car search on request, and nonassociation with drug users or dealers. Donald nods, but throughout the hearing he speaks not a word.

In Jefferson Parish, La., it was a grueling day in Judge Thomas McGee's courtroom. The docket included two sexual-abuse cases. One case involved a retarded girl who testified of repeated rape by a relative. The other case was of a 14-year-old girl who may have been molested by her stepfather. In addition, the court had reviewed the case of a 17-year-old foster child whose year-old baby is also in foster care.

The last case of the day begins at 6 p.m. It concerns a 15-year-old boy and his 13-year-old sister. Both children have been in state custody since 1982, when they were only 9 and 7. Later freed for adoption in 1985, the children are nowhere close to finding a permanent, stable, adoptive home.

Neither child is in court. Their social worker provides the update. The boy is in a new foster home, he says; the girl has been transferred to a restrictive setting in a state institution. She was ready to be adopted by foster parents, but her foster father died in a car accident. Now, the girl is ``unable to control her anger and her temper,'' the social worker says, and the foster mother no longer wants her.

The state's plan for these two children is still adoption, but the social worker says he has no new leads on a prospective family.

``Any objections?'' Judge McGee asks the attorney appointed to represent the children.

``Doesn't sound too bad,'' comes the reply.

``Doesn't sound too good, either,'' Judge McGee growls. The case is rescheduled for yet another review in four months.

When the state takes custody of children, it is usually for one of two reasons: Either parents are failing to protect their children from abuse and neglect, or parents are failing to supervise children whose actions harm the community. The state intervenes on grounds that it will be a better protector and a better supervisor of these children. Sometimes it is - and sometimes it isn't.

In many ways, America's system of state care is a mirror image of the troubled families it serves. A disproportionate number of children in the system come from backgrounds of poverty, of unstable families, and of chaos. But the world they enter is not much different from the world they left behind. Especially in large cities, child-service agencies are underfunded, report high levels of staff turnover, and sometimes do not know how many children they have in custody or where all of them are.

ANNIE, now a slender, vibrant 20-year-old college student, entered Louisiana's foster-care system when she was 9. For the next five years she lived at a girls' institution run by the state, a place she came to detest. Annie says the only way she got out was by nagging her social worker to find her a foster home. Annie did find a foster parent when she was 14, and her story has a happy ending. Her foster mother adopted her just before Annie turned 18.

But the story also has a disturbing side. Why did a bright-eyed child, obviously adoptable, languish in a state institution for five years with never an attempt to find her a more suitable home?

Of all children in the Louisiana foster-care system, Annie was among the 40 percent who are held in custody longer than three years, according to the most recent data. Worse, she was among the 10 percent who were held in care more than five years.

To an adult, three or five years doesn't seem so long. But to a child, it can be a lifetime. Although foster care is intended to be a short-term answer for children's temporary needs, it has been evolving into a long-term system in which children virtually grow up in state custody. Some kids are bounced from home to home, from shelter to shelter, never having the stability in their lives that child-development experts say is so crucial for children.

Recognizing the problem, Congress in 1980 approved legislation to reform the federally subsidized foster-care system - and to require states to track kids so they would not get ``lost.'' Early improvements, however, now appear to be drowning in the torrent of children flooding the system. For example, reports of child abuse and neglect - which drive the foster-care system - leaped from 988,000 in 1979 to more than 2 million in 1986.

The system's response has been to plead for more money - and some states have granted the request. But several critics argue that states may just be pouring good money after bad.

``The mismanagement and misuse of funds in these [state child-welfare] agencies is staggering,'' says Marcia Lowry of the American Civil Liberties Union's Children's Rights Project. ``We're wasting millions and millions of dollars as well as these kids' lives.'' The ACLU and other youth-advocacy groups have filed lawsuits on behalf of foster-care children in at least 12 states, including Louisiana.

For Annie, the state's parting shot came about a year ago, when she and her adoptive mother visited Annie's relatives out of state. There, she learned that one of her uncles had wanted to adopt her years earlier, when she was a child of 10 at the institution. State workers refused to permit it on grounds of financial instability, says Jeanne W., Annie's mom.

``Of all the things the state did to Annie, that was about the worst,'' Jeanne says. ``All that time she could have been with relatives, people who we saw were real close-knit. The state never even told her that her uncle had asked to adopt her.''

ALAN, not his real name, has lived for almost three years at the largest, most overcrowded correctional institution for young offenders in the US - the Youth Training School in California. His room is in the ward for emotionally disturbed youths.

Like Alan, many of the 100 young men in this ward are here for committing sex crimes. Like Alan, most of them were physically or sexually abused when Please see Page B6 they were children, according to a staff member who works with them. Like Alan, 80 of them have tried to kill themselves, he says.

Alan is 20 now, but he was 17 when he committed the crime that sent him to the Youth Training School. What is the portrait of a delinquent?

Nationally, research suggests adolescents who commit crimes are likely to be poorer than nondelinquents. They are also much more likely to have learning disabilities, come from broken homes, and been abused as children by parents or relatives. They are disproportionately minority youth. Black and Hispanic children are incarcerated at a much higher rate than whites, says Barry Krisberg, president of the National Council on Crime and Delinquency.

Traditionally, America has confined its delinquents in so-called training schools, ``a euphemism for warehouses,'' says Dr. Krisberg. Experts are discouraged by a dramatic increase in the number of children and youths being locked up in such institutions - at a time when juvenile crime is declining.

``We've got to lay to rest this perception that juvenile crime is spiraling out of control when that is not, in fact, the case,'' says Ira Schwartz of the Center for Youth Policy at the University of Michi-gan. The annual number of juvenile arrests peaked in the late '70s - and has fallen significantly since. Most of the decline is because there are now fewer juveniles in the population. But, even juvenile-arrest rates (the number of arrests per 100,000 kids) have stayed relatively flat, Krisberg says.

Reformers say the system's reliance on training schools has not helped to make the public safer - and has brutalized kids in the process. Now, slowly but surely, states as politically diverse as Utah and Massachusetts are closing their training schools in favor of other corrections programs. CHRISTINE lives near Boston and Shawn lives clear across the country in Portland, Ore. They don't know it, but they have a lot in common. Each emerged from the deep end of the system just as troubled as they went in. And they both hit the streets.

Christine remembers how disgusted she felt waking up in a ditch one morning. ``There were slugs on my hands,'' she shivers. In state custody since she was 12, Christine says she stayed in three foster homes, a group home, a diagnostic center, and an emergency shelter by the time she was 15.

``They were real nice people,'' she says of her first foster family. ``But I just wasn't used to it. How can you take a kid who had never been taken care of and put her in a real stable, close environment?''

Physically abused by her alcoholic father, Christine, on the streets after running away from a foster home, hooked up with a man who also beat her and tried to prostitute her. She stayed with him for over a year rather than go back into the system, she says.

The streets are where the system's failures are so apparent. Abused by their families, shunted from place to place by the system, kids get the message: No one wants them. At least on the streets, many kids say, they have each other.

Estimates are that half the runaways in the US each year escaped from foster homes, group homes, correctional institutions, or other placements. But the streets are dangerous places for kids. Drug use and casual sex are rampant - and suicides, drug overdoses, and AIDS take their toll.

Christine got help from a Boston program for street kids when she was 17. She lived at one of its homes for nine months. Now she has a job at a bakery, and lives by herself in a tent across the street from her sister's house.

Shawn, interviewed one April night, was still on the streets. He said he'd been in an institution for boys, he used drugs (``but not as much my friends''), and he stole already-stolen goods for a living.

``I've taken a lot in my time,'' Shawn says. ``I've cut on myself and I've taken my share of abuse. That's why I stay away from my family. They aren't really good people. Really.''

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