Sacramento -- When Sen. Jackie Speier unveiled a strategy to force California's politically well-connected prison guards union to redo its costly labor contract with the state, she faced immediate opposition from a lawmaker who is still a member of that union.

Assemblyman Rudy Bermudez, D-Norwalk (Los Angeles County), publicly quarreled with Speier, D-Hillsborough, during a hearing earlier this month when the Bay Area senator said she planned to ensure the state would never "be burned again" by the kind of contract guards received in 2002, which is doling out big raises this year while California faces a giant budget deficit.

Bermudez said he was defending all state employee contracts when he attacked Speier's call for the Legislature to overturn the guards pact. But Bermudez also is a former parole agent, who was one of those employees just two years ago. And an amendment to the contract, created specifically for Bermudez when he was elected in November 2002, allows him to return to his old job once he leaves elected office in Sacramento. It's a position that would enjoy the raises and generous pension benefits the contract calls for.

The California Correctional Peace Officers Association has long been one of the most powerful players in Sacramento because of its lavish spending on political campaigns. But a close look at the union's other connections shows a well-entrenched special interest that is positioned to have tremendous impact on efforts to reform California prisons, as well as affecting efforts by Speier and Gov. Arnold Schwarzenegger to reopen the guards' contract:

-- An official who is expected to be a key negotiator for the state if the guards' contract is reopened said at a Senate hearing earlier this month that he may return to a previous job at Folsom State Prison, where he would be paid under the terms of the contract.
-- A union lobbyist who joined the state Senate as a staffer worked on warden confirmations and at least two bills that were priorities for the union. He left the Senate and is now back earning money from the union.

None of these relationships seems to violate state conflict-of-interest laws, but many government watchers find them troubling.
"These don't appear to be legal questions, but they are legitimate ethical issues: Where do these people's loyalties lie?'' asked Bob Stern, executive director of the Los Angeles-based Center for Governmental Studies.

Bermudez said he sees no reason to recuse himself from any legislative vote on the contract, noting he has received legal advice allowing him to make decisions on prison issues despite his past -- and future -- job. "I was defending all contracts the state has with employees,'' he said in a later interview. "The point is, we can't go back on contracts that have already been signed.''
While Bermudez said he represents the residents of his Los Angeles area district, not the union of which he remains a dues-paying member, he nonetheless took an unusually prominent role in defending the union's contract at Speier's March 4 Senate hearing. Members of the Assembly rarely sit in on Senate hearings.

Finance officials now say the deal, approved by lawmakers and Gov. Gray Davis two years ago, will add as much as $2 billion to prison costs by giving guards potentially more than 37 percent raises over the life of the five-year pact.
Should Speier or the governor succeed in getting the union back to the bargaining table, they will find a familiar face.

Tim Virga, a former counselor at Folsom State Prison who was once the Folsom chapter president of the guards union, would be a key negotiator for the state.

Virga now works for the Department of Personnel Administration, and Schwarzenegger officials confirm he would be a negotiator for the state in contract talks.
At the March 4 Senate hearing, Virga told lawmakers he someday might return to his old job at Folsom, where he would work under the terms of contract he may help redesign.

"Tim Virga has a conflict of interest,'' Speier said. "He should not continue.''
Virga did not want to be interviewed for this story.

A spokeswoman for Schwarzenegger, Terri Carbaugh, however, said that the governor had "full faith and confidence in Mr. Virga,'' and that he had "great insight'' into the bargaining unit he may be negotiating with. Ryan Sherman also had insight into the union. Sherman first went to work for the union in 1995 and became a registered lobbyist for the prison guards in 1999. He left his union job in May 2001 to go to work for state Sen. Gloria Romero, D-Los Angeles.

In one example of union synergy inside the Capitol, Sherman helped Romero carry union legislation that would have made it difficult for private prisons -- which employ nonunion workers -- to construct new jails in California. In an interview, Sherman acknowledged that he wrote the bill as a lobbyist for the union before joining Romero.

Sherman also helped Romero in her job as a member of the Senate's Rules Committee, which among other things has the power to OK or deny gubernatorial appointments, including prison wardens -- a key position that has a dramatic impact on rank-and-file union members.

During Sherman's stint with Romero, the committee confirmed 21 wardens.
Critics of the state's prison system have long complained that the union has used its political clout to greatly influence who becomes a warden. Both Sherman and Romero insist that while he was working for the senator, his loyalties were with her. "He worked for me, not the union,'' Romero said. State records show that wasn't always true.
According to state records, Sherman, who runs a separate political consulting firm, was paid $500 from the union while working for Romero. The union also spent $600 to fly him to a conference.

Since leaving Romero's staff in November 2002, Sherman acknowledged he has done more consulting work for the union. Sherman's interactions with the union are not unusual. Lawmakers and their staffs are wined and dined by special interests nightly in Sacramento. Staffers can have outside employment, as long as their legislative duties do not have a direct economic impact on their other employer.

And the revolving door between government and big-time Capitol players is wide open, even under a new governor who vowed not to be beholden to special interests. Consumer groups howled when Schwarzenegger chose a Chamber of Commerce lobbyist and an executive for an HMO to be key members of his inner circle, for example.
Stern, the good-government watchdog, noted there's nothing inherently wrong with politicians employing people with the same beliefs who happen to have worked for industries or causes that are affected by decisions made in the Capitol.

Union critics, however, say the union, through its contributions and personal connections, has unfair clout in Capitol discussions involving crime and punishment.
Sherman said he didn't talk that much with union leaders while working in the Senate.
"I had a pretty clear understanding of what (the guards union's) interests were,'' he said.

E-mail Mark Martin at markmartin@sfchronicle.com.
©2004 San Francisco Chronicle