Jason Giambi’s reported testimony that he used steroids might jeopardize his $120 million contract with the Yankees and allow baseball commissioner Bud Selig to discipline him.

Giambi said he injected himself with human growth hormone in 2003 and used steroids for at least three seasons, according to a grand jury transcript reviewed by the San Francisco Chronicle.

His testimony last December, before a federal grand jury investigating illegal steroid distribution, contradicts his public proclamations that he never used performance-enhancing drugs.

Penalties for steroid use in baseball began in 2003, but testing that identified players didn’t start until the next season. Human growth hormone, or hGH, is not specifically banned by the major leagues.

While discipline is spelled out for positive tests and criminal convictions, admission of steroid use is not addressed, possibly giving Selig an opening to punish Giambi. Even so, baseball can’t test him more than other players because it’s been over a year since the steroid use.

Selig repeatedly has called for year-round random testing and harsher penalties, but management and the players’ association have failed to reach an agreement. The contract runs through the 2006 season.

“I’ve been saying for many months: I instituted a very, very tough program in the minor leagues on steroids in 2001. We need to have that program at the major league level,” Selig said yesterday in Washington, D.C. “We’re going to leave no stone unturned until we have that policy in place by spring training 2005.”

Giambi, the 2000 AL MVP with Oakland, signed a seven-year contract worth $120 million with the Yankees before the 2002 season, the sixth-highest deal in history. Bothered by an injured knee, Giambi hit just .250 in 2003. He batted .208 and played in only 80 games last season, missing time because of a sprained right ankle, fatigue, and a benign tumor, which was rumored to be in his pituitary gland. The Yankees did not even include him on their postseason roster.

Giambi reportedly testified that one of the drugs he thought he used was Clomid, a female fertility drug that some medical experts say can exacerbate a pituitary tumor.

The Yankees still owe Giambi $82 million, but they might be able to get out of the deal.They could argue Giambi’s use of steroids violated his contract, allowing them to terminate it; violated the guarantee language of the deal, allowing them to release him at a fraction of the remaining money; or caused him to be injured or unavailable, meaning he was paid at a time when he was at less than full strength.

“We have met with the commissioner’s office today and will continue to work with them to obtain all of the facts in this matter,” Yankees President Randy Levine said. “We have made no decisions and will keep all of our options open.”

Meanwhile, U.S. Attorney Kevin Ryan said his office was concerned about the leaks to the Chronicle and asked the Justice Department to investigate. “Violations of grand jury secrecy rules will not be tolerated,” Ryan said.

Giambi came to spring training this year noticeably trimmer. Asked in February whether he had ever taken performance-enhancing drugs, Giambi said: “Are you talking about steroids? No.”

However, he told grand jurors he used steroids during the 2001-03 seasons, the Chronicle reported yesterday. He testified how he injected hGH in his stomach, testosterone into his buttocks, rubbed an undetectable steroid knows as “the cream” on his body and placed drops of another, called “the clear,” under his tongue, the newspaper said.

Giambi testified that he obtained several different steroids from Barry Bonds’s trainer, Greg Anderson, one of four men indicted by the grand jury probing the Bay Area Laboratory Co-Operative. He said he got the hGH from a gym in Las Vegas.

Tony Serra, Anderson’s lawyer, said Anderson “never knowingly provided illegal substances to anyone.”

Anderson, Balco founder Victor Conte, Balco Vice President James Valente, and track coach Remi Korchemny have pleaded not guilty to charges that include steroid distribution. In an interview to be shown on ABC’s “20/20” tonight, Conte mocked MLB’s drug-testing program.

“I think they still believe there’s a Santa Claus,” he said.”They’re not in contact with reality. I mean the program that they put together is a joke.”

“Let me tell you the biggest joke of all: I would guesstimate that more than 50% of the athletes are taking some form of anabolic steroids,” he said.

Giambi was among dozens of elite athletes – including Bonds, Gary Sheffield, and track stars Tim Montgomery and Marion Jones – who testified before the grand jury last year under a promise of limited immunity from prosecution.

Sheffield told Sports Illustrated that he used “the cream”and “the clear”from Balco but did not know they contained steroids. Bonds, Jones, and Montgomery deny using performance-enhancing drugs.

[According to a report posted late last night on ESPN.com, Conte said he provided performanceenhancing drugs to Jones before and after the 2000 Sydney Olympics, and gave steroids to Anderson.

Conte reportedly said that he watched Jones inject human growth hormone in 2001 He also said his first steroid client was Bill Romanowski.]