"This is the most Byzantine accounting system I've ever seen," Adler said. "I am mystified."

The contempt threat Monday came six weeks after the diocese sought bankruptcy protection amid lawsuits by more than 140 people who accuse priests of sexual abuse.

Adler had cited a March 29 letter sent by a diocese parish organization to pastors urging them to get new taxpayer identification numbers and transfer funds to new accounts.

The judge had said any post-bankruptcy transfers between the diocese and parishes outside of normal cash operations violate laws against shifting the diocese's assets while the bankruptcy case is pending - rules designed to protect assets that may eventually be used to compensate clergy sexual abuse victims.

She said any transfers require court approval.

In a sternly worded order, Adler had said attorneys Susan Boswell, Jeffry Davis and Victor Vilaplana appear to have "conspired with parishes" to create new bank accounts separate from the diocese.

On Wednesday, Adler grilled attorneys representing the diocese and the parish organization, as well as two pastors who had sent letters the judge said misrepresented her comments during an earlier hearing.

Boswell apologized and said she had misinterpreted the judge's comments at a March 1 hearing concerning how the parishes should go about protecting their cash flow through the bankruptcy process.

"We are not dealing with a commercial enterprise - we are dealing with a church," said Boswell. "What it does is give money to the parishes. This is not a nefarious function."

Boswell agreed to file amended statements with the court reflecting parish accounts operating under the diocese's taxpayer identification number and to cooperate with an independent audit.

Attorneys for the alleged victims have repeatedly accused the church of trying to hide assets to reduce the overall sum available for potential settlements. They estimate that a fair settlement would total about $200 million.

In March, the diocese proposed a $95 million settlement schedule for victims that would offer plaintiffs anywhere from $10,000 to $800,000.

San Diego was the fifth U.S. diocese to file for bankruptcy. The other dioceses that have filed for bankruptcy protection are Davenport, Iowa; Portland, Ore.; Spokane, Wash.; and Tucson, Ariz. Tucson has emerged from bankruptcy protection, while proposed settlements are awaiting final approval in Portland and Spokane.

The vote capped 20 hours of often passionate debate, with proponents focusing on the cells' potential to help treat a wide range of diseases and opponents decrying the fact that human embryos must be destroyed to retrieve them.

With the House having passed a similar bill in January, the two chambers are now set to hammer out compromise wording and send the legislation to Bush. But the White House Tuesday set the stage fora new Bush veto, saying it was unthinkable that public tax dollars should be used to destroy human embryos.

Bush used his power of veto for the first time in his presidency to slap down a similar text passed in Congress last year, when it was then controlled by his Republican party.

However, proponents are relishing the fact that they will have the opportunity to rebuke the president by overriding that veto this time.

Although the House majority favoring the legislation is 15 votes larger this year than that in 2005, it is still dozens short of the two-thirds needed for an override.

In that case, Bush's veto pen will prevail and the situation will revert to what it has been since Aug. 9, 2001, when Bush, in his first major televised address to the nation, declared that federal funds could only be used to study stem cells derived from embryos already destroyed by that date.

Deadlocked in a political impasse over a war funding bill, U.S. President George W. Bush and Democrats failed on Wednesday to agree on how to conduct discussions on the issue.

Bush insisted that Democratic leaders should come to the White House next Wednesday to talk, but there will be no negotiation on his position on the bill.

Meanwhile, Senate Democrats want him to meet Friday on Capitol Hill.

Neither side showed signs of any backing down.

"It can't be his (Bush's ) way or no way," said Senate Democratic Leader Harry Reid.

Dana Perino, White House spokeswoman, made it clear that Bush has no plans of going to Capitol Hill.

Both the House and Senate have attached language to legislation calling for U.S. combat troops to leave Iraq in 2008 -- the House by the end of August, the Senate by March of that year.

But Bush said he will not accept any bill that includes a timeline for withdrawal.

If he vetoes the bill, which looks certain, the congress will need a two-third majority to overthrow the veto.

Otherwise, the congress will have to draft a new funding bill and send to Bush again.

With neither side willing to back down, there seems no way out of the impasse at the moment.

An incarcerated registered sex offender in Lyon County was charged Wednesday with five counts of third-degree sexual abuse.

Kyle King, 21, allgedly committed five sex acts with a 15-year-old female in fall 2006, the Lyon County Sheriff's Department reported Wednesday.

King was already in Lyon County Jail for failing to comply with the sex offender registry at the time of his arrest. In 2004, he was convicted of assault with intent to commit sexual abuse.

Wednesday's charges carry a maximum sentence not to exceed 10 years. More charges are possible in the near future as the investigation by the sheriff's department continues.

The report measures the US dioceses' compliance with the Charter for the Protection of Children and Young People, drafted in 2002 in response to widespread reports of sexual abuse committed by clergymen. The report, however, has been criticized since an accompanying independent audit included only 11 full, on-site visits to US dioceses and no reviews of personnel files

"As New York City's Chief Financial Officer and the Chief Investment Advisor to the City's Pension Funds, I am particularly troubled by reports that Wal-Mart engaged in chilling and truly outrageous surveillance activities," Thompson wrote. Copies of the letters were posted on the comptroller's Web site.

Wal-Mart could not immediately comment on the story. The SEC declined to comment.

Last week, a report in The Wall Street Journal said an internal Wal-Mart security group was asked to investigate the potential threat of those submitting proposals to its June shareholder meeting.

Following the article's publication, Tom Hyde, Wal-Mart's top legal officer, sent a letter to shareholder proponents saying that while the article implied that the company had initiated an intrusive "threat assessment" of shareholders who submitted proposals for inclusion in Wal-Mart's annual proxy statement, that was not true.

"In spite of a January 2007 memo referenced in the article, there were no inquiries made with respect to the proponents of shareholder proposals," he wrote in the letter, a copy of which Wal-Mart provided. "Given the nature of the matters proposed and our familiarity with the individual proponents, the request contained in the memo was not acted upon."

The New York City Pension Funds represent nearly 600,000 active members, beneficiaries and retirees and are valued at nearly $100 billion, according the Web site.

Wal-Mart shares fell 24 cents to $47.70 in morning New York Stock Exchange trade.