SACRAMENTO - The nation's largest prison system is a "tarnished institution" from the top down, punishing employees who try to do right and protecting those who do wrong, state senators said at the outset of two days of hearings Tuesday.

Gov. Arnold Schwarzenegger's newly appointed administrator will not be confirmed by the Senate until he proves he is reforming the California Department of Corrections, said Sen. Gloria Romero, who sits on the gatekeeper Senate Rules Committee.

Schwarzenegger's pick, Youth and Adult Correctional Secretary Roderick Hickman told the Senate Select Committees on Government Oversight and the California Correctional System that he would clean house.

But Hickman's testimony was contradicted by the first witness, Folsom State Prison Associate Warden Max Lemon, who tearfully accused Hickman of ignoring problems and appeals, and the Schwarzenegger administration of undermining independent investigations by firing members of the Office of Inspector General at the behest of the powerful prison guards' union.

Lemon, sobbing at the witness stand, accused his fellow administrators of perjury and evidence tampering to cover up a 2002 Folsom riot by rival Hispanic gangs.

The entire Folsom administration will be temporarily reassigned during a new investigation that may involve state or federal prosecutors, said Acting CDC Director Rick Rimmer. Though only the warden has been fired, Rimmer said the outside investigation will probe allegations Tuesday by Folsom guards of connections between the acting warden that day and the Southern Mexicans, or Mexican Mafia, one of the two gangs involved in the riot.

The entire system is a step away from a federal court takeover, warned Romero, D-Los Angeles.

Corrections' leadership ignored and became "accomplices to sanctioning a code of silence at the highest levels of government," Romero said, although she held out hope the Schwarzenegger administration will make changes to the "tarnished institution."

Rimmer acknowledged such a code "absolutely exists" and has thwarted investigations. He supported senators' call for training employees in what is acceptable.

Extra security patrolled the hearing room and an earlier news conference, after Romero said she was the target of an earlier death threat. Co-chair Sen. Jackie Speier, D-Daly City, said some witnesses at the hearings "fear for their jobs and their lives." Lemon said he had been under "protective custody" the last five days before his testimony.

The senators called on Schwarzenegger to reverse the Friday firing of John Chen, the chief deputy director who had been running the independent Office of Inspector General. Chen authored a report critical of how Folsom officials promoted and responded to the 2002 riot.

Lemon alleged Schwarzenegger's replacements have been approved by the wealthy and politically powerful California Correctional Peace Officers Association.

Schwarzenegger wants to eliminate the independent office and incorporate fewer inspectors into Hickman's agency, which Hickman supported. A Schwarzenegger spokesman characterized Chen's firing as routine for a new governor, and the merger of the independent office a moneysaving move.

"This isn't independence - it's insanity," Speier said.

Romero also called on Schwarzenegger to fire former Corrections Director Edward Alameida and the department's chief investigator, Thomas Moore, and to stop paying for their legal defense.

Both resigned their positions - but not their state employment - last month before the release last week of a report from a federal court-appointed monitor that recommended they be charged with criminal contempt of court for blocking a probe of whether Pelican Bay State Prison guards committed perjury in inmate abuse trials.

Hickman agreed there are "fundamental problems" with the employee investigatory and discipline process and said he's trying to fix "a flawed system that has been open to fraud and exploitation."

The union has too much influence over the department's disciplinary system and top prison officials, Romero said. "There is a line in the sand where influence is reduced to mere thuggery."

Mike Jimenez, president of the guards' union, said the union "has never stopped an investigation, and we lack the authority to do so."

Jimenez said guards who testify against their colleagues may be ostracized, but said the "code of silence" is actually a "code of cowardice" for those who fail to fulfill their oath to report wrongdoing. Guards who do speak out "are tired of it falling on deaf ears" from department administrators.

Tuesday's hearing focused on problems at the system, as illustrated by six allegedly flawed investigations of alleged prison wrongdoing. Wednesday's hearing is aimed at finding potential solutions.

The hearings opened with videotapes of the 2002 Folsom gang riot and emotional testimony by Evette Pieper, widow of correctional Capt. Doug Pieper. Pieper was blocked from efforts to separate the two Hispanic gangs before the riot, and later committed suicide after he questioned the warden's investigation of those events and was reassigned to a job he didn't like.

The senators also were critical of the department's routine overspending, as detailed Sunday in an Associated Press analysis that showed the prison system overspent its budget by $1.4 billion in the past five years.

On the Net:

Oversight committees: www.sen.ca.gov/oversight

California Department of Corrections: http://www.corr.ca.gov/

California Correctional Peace Officers Association: http://www.ccpoanet.org/