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Apparently the su(1) program in the fileutils package cannot handle multiple-length -c arguments. (The -c argument is used by su(1) to execute a program or script other than a shell as a different user.) For example, I cannot get this to work, although the man page says it should, and it works correctly in other su(1) implementations: su user -c /path/to/exec argument argument ... I've also tried this form: su -c "/path/to/exec argument argument" user and it doesn't work either.
Both su username -c "/path/program arguments" and su -c "/path/program arguments" username work for me... Try reinstalling the sh-utils package (rpm -Uvh --force /mnt/cdrom/RedHat/RPMS/sh-utils*), maybe someone messed up your installation.