On the last day in November, Republican presidential candidate Gary Bauer stood before several hundred Iowans in the landmark Fort Des Moines Hotel and took aim.

"The governor of this great state has made a very big mistake," he declared gravely. "He has taken an issue that deeply divides the people of this state and issued an executive order."

If it seems odd that a presidential candidate would be blasting a governor over an order that affects only the people of that state, well, these are not normal times in Iowa. Things get a little crazy every four years as the January presidential caucuses draw nearer. After all, they're the country's first test of a candidate's strength, and every long-shot presidential hopeful needs an edge. But there's only so much pandering you can do over corn and hogs -- the two things for which Iowa is best known.

As Bauer's luck would have it, there was something juicier on the table, something easier to stir the Iowa electorate with, something tailor-made for his morality- and family-values campaign: The image of men in dresses.

Just two months earlier, Iowa's new governor had signed an order which prevents the state from discriminating against transsexuals and the transgendered in its hiring practices. Bauer couldn't have scripted it better if he'd tried.

Nine months after becoming Iowa's first Democratic governor in 30 years, Tom Vilsack, a middle-of-the-road former state legislator not known for controversy, stunned the Republican-dominated Legislature and even some political allies, with Executive Order 7. Among other things, it prevents discrimination in state employment on the basis of sexual orientation, but then goes further, to include "gender identity." That can mean anything from a man wearing woman's clothes to men and women crossing gender lines in more substantial ways such as through surgical procedures. The measure covers some 55,000 people in the executive branch of state government, including all the state universities. Discrimination based on race, religion, and age are already forbidden.

In a state where evangelical Christianity has been a dominant force in politics, the news landed like a meteor crashing. "Iowa should be on the cutting edge of educating our children, not the cutting edge of extending civil rights to transsexuals," railed Stewart Iverson, the Republican Senate Majority leader.

"I don't like it and personally wouldn't have respect for a man who came to work in a dress," weighed in one church secretary to The Des Moines Register. Inevitably, the prospect of men using women's rest rooms (which the governor has said won’t happen) created the biggest buzz.

The move even caught some in the gay and transgendered community by surprise. "We all immediately sent out e-mails and said, 'Whoa!'" said Casey Gradischnig, a female-to-male transgender. "I was really, really surprised to see gender identity in there. I thought, 'That's a really progressive step and platform to take.'"

No one made more hay of it than Bill Horn, of Straight From the Heart Ministries. Horn moved from California to Iowa nearly six years ago as spokesman for the now defunct national conservative Christian group, The Report. He has made a career out of fighting the burgeoning social acceptance of gay people wherever he sees it. One of his first moves was crusading against a proposed public-school curriculum to teach about gays. Later, he helped get a popular three-term gay school board member voted out of office.

Vilsack's order gave Horn a new issue to mobilize around. He denounced it as affirmative action for "cross-dressers, transgenders and she-males," took out radio ads, and organized last month's event with Bauer and former NFL player Reggie White.

In a larger coastal state, such antics might have been shrugged off, or their perpetrator picketed. But no other governor has issued an order like this, according to the Washington D.C.-based Human Rights Campaign. Minnesota, often on the cutting edge of social issues, protects the transgendered through state legislation. A New York judge ruled New York's civil rights statute could cover someone who had a sex-change operation (transsexual). And several other states list "gender identity disorder" as a disability.

The question, of course, is why the governor of a conservative Midwestern state would put his career on the line for one of society's most marginalized groups? Vilsack isn't talking. He declined several interview requests, but on a recent radio call-in show he said, "We want to make sure that we set a standard where we're not discriminating against people." Many gay Iowans supported Vilsack’s dark horse campaign for governor and some say it’s political payback. But even paying back the gay community wouldn’t require going out on a limb for the transgendered.

His aides say Iowa couldn't afford not to do it. With unemployment at an all-time low, the state desperately needs people if it’s to grow economically. Since 1980, Iowa's population of 2.8 million people has dropped by 50,000 people – many of them young and educated fleeing for larger cities and better opportunities.

After taking office this year, Vilsack began urging ex-Iowans to come home. More than 800 responded to an invitation to New York's Tavern on the Green last summer to hear the governor's pitch. According to a Vilsack aide, some participants said Iowa wasn't an accepting environment for people who lead alternative lifestyles or look different from "the stereotypical Iowan." Part of the reason might be found in the climate generated by Vilsack's predecessor, Terry Branstad. For 16 years, Branstad, a conservative Christian Republican, fought all efforts to protect the civil rights of gay Iowans. He publicly chided his lieutenant governor for inviting a gay mayor to be on a statewide diversity conference panel. And he marched with, and raised money for, arch-conservative Bill Horn.

Kristina Campbell, managing editor of one of the country's leading gay newspapers, the Washington Blade, graduated from college and fled the state in 1992. She decided being gay in Iowa came at too high a price. Still deeply etched in her memory is the day when gay people at her college, Drake University, invited others to wear jeans – and many students rushed home to change into something else.

Gradischnig, Campbell and many others hope the executive order will pave the way for more civil rights legislation and that other employers will follow the state's lead. Doing the compassionate thing, however, seldom wins popularity contests, especially around election time. And so, last week, just as the hysteria had started to die down, there was Bauer, the presidential candidate, trying to keep it alive -- accusing Iowa's governor of signing the order "in the darkness of night."

"On an issue this fundamental, the people of Iowa deserve a free and open debate," he intoned. "Repeal that executive order! Let's have a debate!" Horn, at Bauer's side, added, "If the governor wants to wear a dress and high heels and a wig, he has the right to do that."

Horn and Bauer seem to be getting under the governor's skin. Vilsack is feeling so besieged these days, he won't discuss the executive order with reporters. Neither will his lieutenant governor or his communications director. "This is one of many things we're moving forward on," Lieutenant Governor Sally Pederson said tersely last week. "It's not what we want to have the public dwelling on."

But it is, after all, an election year. Six GOP candidates are scrambling to get attention. And tax policy and land-use planning don't hold a candle to cross-dressing.