NEW YORK (AP) _ Kathie Lee Gifford sent her sportscaster husband, Frank, to pay cash to sweatshop workers who complained they were underpaid for making blouses that carried her label.

``There's $300 in there, and I am really sorry,'' the former football great told a 32-year-old illegal immigrant, who sobbed as he gave her the money.

Earlier Thursday, Mrs. Gifford said on her syndicated TV show ``Live with Regis & Kathie Lee'' that she had been ``physically sick to my stomach'' after learning that workers who made blouses for her Wal-Mart clothing line were underpaid.

Wal-Mart said the work had been subcontracted without the discount giant's knowledge, and it promised to reimburse Mrs. Gifford the $9,000 in cash her husband brought to a garment union office.

``This is a Wal-Mart issue and not the responsibility of Kathie Lee Gifford,'' the company said.

Mrs. Gifford has been accused of tolerating the use of cheap Third World labor to produce her clothing line. But it turned out the problem was much closer to home _ in a sweatshop blocks from her TV studio.

Workers at Seo Fashions recently finished making 50,000 antique white, short-sleeved blouses with a button at the nape for Gifford's clothing line. The blouses sell for $9.96 at Wal-Mart.

Seo paid its workers below minimum wage and did not grant overtime, although the employees worked up to 60 hours a week, according to Karen Crowe, spokeswoman for the Union of Needle Trades, Industrial and Textile Employees.

The company was cited earlier this year and had to pay employees $2,000 in back wages, according to the federal Labor Department. A company official could not be located Thursday.

Gifford said he and his wife found out about the situation on Wednesday night from a Daily News reporter.

The ``NFL Monday Night Football'' broadcaster said his wife was too ill to deliver the cash herself, so Gifford brought it in 30 envelopes to the Seo workshop.

He handed out 13 envelopes at the Garment District Justice Center, run by the union, and said he would ask the state attorney general to determine which workers were entitled to the rest.

Wal-Mart said the blouse contract had been given to Bonewco Limited of New York, which subcontracted the work to Seo. Wal-Mart terminated its contract with Bonewco on Thursday morning.

Bonewco President Andrew Postal denied wrongdoing. ``We just got blind-sided with this,'' he told the Daily News.

Earlier this month, Charles Kernaghan, director of the National Labor Committee, accused Mrs. Gifford of using, then dumping, a Honduran company that paid workers _ including children _ 31 cents an hour to make her clothing line, whose items sell for about $10 to $40.

Mrs. Gifford said she severed her ties with the factory after finding out about the conditions last fall.

The Labor Department says it has helped collect $7 million in back wages for 25,000 sweatshop workers in the past three years. Asked today on ``CBS This Morning'' about the Giffords, Labor Secretary Robert Reich said:

``I talked to Kathie Lee and Frank Gifford. They've been drawn into this mess. I assume they're innocent. But celebrities have got to be very careful about this.''