Schwarzenegger spokesman says tax lien related to 'minor paperwork' discrepancy

A federal tax lien for nearly $80,000 filed against Gov. Arnold Schwarzenegger is related to "a minor paperwork tracking discrepancy," and is expected to be cleared up quickly with no penalty assessed on the governor, spokesman Aaron McLear said this afternoon.

Public records show the lien was filed May 11 at the Los Angeles County recorder's office for $79,064, according to a record in an electronic database that includes lien filings. The record lists the debtor as Arnold Schwarzenegger and the address as the governor's home address in Brentwood.

The lien was reported Friday by TMZ.com, which posted a copy of a lien document that says it is from the county recorder's office. That document shows that Schwarzenegger owes $39,047.20 from 2004 and $40,016.80 from 2005.

The document also lists a section of the IRS code that suggests the debt may be penalties for a failure to report certain business transactions.

In a statement, McLear said the matter had not been brought to Schwarzenegger's attention until Friday. "The issue is completely unrelated to the payment of taxes, which the governor has paid in full and on time," the spokesman said. 

IRS spokesman Victor Omelczenko said he could not discuss the agency's dealings with individual taxpayers.

--Michael Rothfeld in Sacramento

IRS files $79,000 tax lien against Schwarzenegger [Updated]

The Internal Revenue Service has filed a federal tax lien against Gov. Arnold Schwarzenegger for nearly $80,000, public records show.

The lien was filed May 11 at the Los Angeles County recorder's office for $79,064, according to a record in an electronic database that includes lien filings. The record does not indicate what property the lien was placed on, but it lists the debtor as Arnold Schwarzenegger with the governor's home address in Brentwood.

[Updated at 11:42 a.m.: A federal tax lien would be attached to all of the governor’s properties, according to the IRS.]

The lien was reported this morning by TMZ.com, which posted a copy of a lien document that says it is from the county recorder's office. That document shows that Schwarzenegger owes $39,047.20 from 2004 and $40,016.80 from 2005. The document also lists a section of the IRS code that suggests the debt may be penalties for a failure to report certain business transactions.

Schwarzenegger's spokesman, Aaron McLear, said in a statement that the "governor has paid his taxes in full and on time."

"No one, including the IRS, has notified the governor of any issues whatsoever with his taxes," McLear said. "We are contacting the IRS to determine if the document in question, which appears to be a penalty for missing info and not for unpaid taxes, is legitimate and if there is any discrepancy to resolve."

-- Michael Rothfeld in Sacramento

O.C. supervisors, in reversal, ask governor to cancel fairgrounds sale

The Orange County Board of Supervisors approved a resolution today asking Gov. Arnold Schwarzenegger to "immediately cancel the proposed sale of the Orange County Fairgrounds."

The 4-0 vote marks a reversal from July, when the board approved a resolution in favor of selling the fairgrounds to a local government agency or nonprofit. Supervisor Chris Norby was absent for today's action.

The governor earlier this year proposed liquidating half a dozen state properties to raise funds to help ease California's budget crisis, and the state put the 150-acre Costa Mesa site on the auction block last month, giving bidders a deadline of Jan. 8.

Supervisor John Moorlach said the board initially supported the sale because they thought the terms would allow it to be sold to a local nonprofit or government.

But since then, state officials have indicated through auction documents and letters that they want to maximize profit, possibly by selling the land as something other than a fairgrounds, and that has fueled speculation that it could be sold into private hands and developed.

"It's creating so much aggravation that the easiest way to keep the fairgrounds a fairgrounds — which was our overarching goal — is just to cancel the sale," Moorlach said.

But that doesn't mean the county doesn't have a Plan B: Like the city of Costa Mesa and a nonprofit formed by the governor-appointed fair board, the county is exploring making a bid of its own for the property.

After all, quipped Moorlach, "The governor doesn't always do what we ask."

--Tony Barboza in Orange County

State Senate leader casts doubt on lieutenant governor nominee Abel Maldonado

State Sen. Abel Maldonado’s nomination as California’s next lieutenant governor may already be in trouble.

Minutes after a Los Angeles event this morning, with Gov. Arnold Schwarzenegger hailing the moderate Santa Maria Republican as his pick for the office,  state Senate Leader Darrell Steinberg (D-Sacramento) released a statement expressing “grave doubts” about the choice. Maldonado needs the approval of the Democratic-dominated Legislature to take the post. 

Steinberg cited the $2-million cost of the special election that would be required to fill Maldonado’s Senate seat, suggesting the money could be better spent scaling back recent fee hikes at state colleges and universities.

The Senate leader, under pressure to keep the post open for Democrats running for lieutenant governor themselves in next year’s election, also suggested he would like to see the job left vacant.

“It may be both fiscally and politically prudent to permit the people to make their own selection for this statewide office next year and avoid the expense of a costly special election,” his statement said.

--Evan Halper in Sacramento
 

Schwarzenegger appears in East L.A. with his choice for lieutenant governor, state Sen. Abel Maldonado

During a ceremony in East L.A. this morning, Gov. Arnold Schwarzenegger publicly introduced state Sen. Abel Maldonado (R-Santa Maria) as his pick for lieutenant governor.

"He is a model of post-partisanship," Schwarzenegger said in a news conference at Ruben Salazar Park. "He always chooses the people of California over politics."

Standing with his family, some of whom wept, Maldonado thanked Schwarzenegger.

"I will work hard everyday for everyone in California to make this place a better California," Maldonado said.

The news conference came the day after Schwarzenegger announced Maldonado as his pick during a taping of "The Jay Leno Show." The appointment must still be confirmed within 90 days by a majority in both houses of the Legislature.

If confirmed, Maldonado would replace John Garamendi, a Walnut Grove Democrat recently elected to Congress. The 42-year-old Maldonado has long been interested in higher office and has been among the few ideological allies Schwarzenegger has had in the Legislature.

Schwarzenegger names new lieutenant governor [Updated]

State Sen. Abel Maldonado, a moderate Republican from Santa Maria who has parted with his caucus on key votes at the request of Gov. Arnold Schwarzenegger, has been chosen by Schwarzenegger to be the next lieutenant governor.

Schwarzenegger made the announcement today at a taping of "The Jay Leno Show."

If confirmed by the Legislature, Maldonado would replace John Garamendi, a Walnut Grove Democrat who was recently elected to Congress.

[Updated 6 p.m.: The governor called Maldonado “a terrific, loyal man that has worked very hard in public service.  But he’s also into bipartisanship and post-partisanship, so he can cross the aisle.

"He makes decisions based on what’s best for the people rather than what’s best for the party," Schwarzenegger said. "He has helped us...pass a budget, which was very important.”

An earlier version of this post stated that Maldonado's appointment must be confirmed by the state Senate. He must be approved by the Assembly as well.]

-- Evan Halper in Sacramento

Schwarzenegger addresses soldiers in Baghdad

Gov. Arnold Schwarzenegger today greeted soldiers at Camp Victory in Baghdad, where he also visited in 2003.

“It’s great to be back here again,” Schwarzenegger said. “Before I left, I said, ‘I’ll be back.’ And the Terminator always keeps his promise.”

Schwarzenegger said he had brought some cigars and invited the troops to “pump up” with him Tuesday morning. He also told them he understood “how tough it is for you, how dangerous it is and how exhausting.”

“I just want to let you know … how much we in the United States appreciate the work that you are doing,” Schwarzenegger said. During moments of discouragement, “you’ve got to inspire each other because you are not here for nothing.”

Schwarzenegger is stopping in his Austrian hometown of Graz and also plans to go to an environmental event in Milan, Italy, and may return to California late Wednesday, an aide said.

See video of the governor's Iraq visit here and here.

-- Michael Rothfeld in Sacramento

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Governor to submit plan to reduce prison crowding

Gov. Arnold Schwarzenegger tonight will give federal judges a road map to reducing state prison overcrowding that involves waiving some state laws so sentencing regulations can be changed and new private prisons built.

But the governor also will disavow those solutions as illegal, said Oscar Hidalgo, a spokesman for the California Department of Corrections and Rehabilitation.

An initial plan that Schwarzenegger submitted was rejected three weeks ago by the three judges, who threatened him with contempt of court for failing to meet their demand for a proposal to reduce the inmate population by 40,000 prisoners over two years.
 
With his new proposal, the governor appears to be trying to avoid open defiance of the judges without giving the impression that he is contradicting his opposition to their efforts in an appeal now pending before the U.S. Supreme Court.

Schwarzenegger to visit troops in Iraq next week

Gov. Arnold Schwarzenegger is planning a short trip to Iraq early next week to visit U.S. troops, his aides said.

The governor has wanted to make such a trip “for the last couple of years, but he hasn’t had the opportunity,” said spokesman Matt David.

In July, Schwarzenegger aborted a planned trip to Iraq because of the state’s budget crisis.

While it was unclear whether the actor-turned-politician would provide any entertainment for soldiers, if he holds true to form they will at least get to hear him say, “I’ll be back.”

David said he could not release Schwarzenegger’s exact schedule for security reasons.

-- Michael Rothfeld in Sacramento

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Schwarzenegger predicts more budget cuts for California

Gov. Arnold Schwarzenegger today predicted a new round of budget cuts, as the state’s finances remain shaky despite large spending reductions made by the governor and lawmakers in July.
 
Schwarzenegger, at a news conference today and at the Fresno Bee’s editorial board Monday, estimated that the current fiscal year’s budget is $5 billion to $7 billion in the red, on top of the $7.4-billion deficit projected by his aides for the fiscal year that begins in July.
 
The governor said he would reveal his specific plans to deal with the problems in January. But he said that, as in the past, no program would be immune to the budget knife. A wide spectrum of programs were cut as state leaders closed a deficit exceeding $20 billion over the summer.

“I think there will be across-the-board cuts again,” Schwarzenegger told reporters today in San Jose, after signing legislation that is part of the water deal he reached last week with lawmakers. “We are not going to go and pick and choose" between programs. "I think that we always have to go and cut across the board."

Schwarzenegger downplayed the impact on state finances from the water deal’s proposed $11-billion bond issue, which will go before voters next year. He said the state would not borrow much of the money for several years, after it has paid down some of its current debt.

The governor said that though there are signs of a recovery in the housing market and strength in the green technology sector, “the economy is not coming back yet the way we want it.”

In a bit of positive news, California Controller John Chiang announced today that tax revenue for October was $285 million above projections, although for the current fiscal year it is still short by $854 million.

--Michael Rothfeld in Sacramento

State Sen. Benoit appointed a Riverside County supervisor

A day after state Sen. John Benoit (R-Palm Desert) voted to approve Gov. Arnold Schwarzenegger's controversial $11-billion water bond proposal, the governor announced Wednesday that he was appointing the legislator to the Riverside County Board of Supervisors.

Benoit was elected to the state Senate last year after six years in the state Assembly. The District IV seat of the Riverside County Board of Supervisors is vacant because of the death in August of Supervisor Roy Wilson.

Schwarzenegger plans to call a special election to fill Benoit’s Senate seat but has not yet set a date.

Members of the Board of Supervisors are paid $143,000 a year, although some have voluntarily taken a 10% pay cut because of the county’s budget problems. The base salary for state legislators is $116,208, although Benoit had voluntarily taken a 5% reduction.

--Patrick McGreevy in Sacramento

Wait time is up at DMV [Updated]

The average wait time for walk-in customers at Department of Motor Vehicles offices has increased from 27 minutes to 45 minutes since the governor ordered state workers to take three furlough days each month, according to a legislative review.

Senate President Pro Tem Darrell Steinberg (D-Sacramento) said the longer lag time is unnecessary. Furloughs imposed starting in February do not save the general fund money, because the DMV is financed almost entirely with fees charged to motorists and with federal money, Steinberg said.

The report was released today by the Senate Office of Oversight and Outcomes.

“One of the governor’s biggest achievements that has made life a little easier for Californians was reducing long lines at the DMV and improving their services,” Steinberg said. “Now, without saving any money from the state’s budget, he has single-handedly wiped out those effective improvements.”

[Updated 2:58 p.m.: A spokesman for Gov. Arnold Schwarzenegger defended the furloughs against Steinberg’s criticism.

"It’s no secret that the Legislature does not share the governor’s commitment to reducing government spending," said spokesman Aaron McLear. "But just like every family and business in California, we must cut back."]

-- Patrick McGreevy in Sacramento

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Innocuous letter or gubernatorial prank? [Updated]

It reads like an innocuous letter from Gov. Arnold Schwarzenegger, explaining why he vetoed a wonky piece of legislation that would have made changes to “infrastructure financing districts.”

But hidden in Schwarzenegger’s text is another message: an obscene phrase apparently directed at the bill’s author, Assemblyman Tom Ammiano (D-San Francisco), who ridiculed the governor earlier this month. The phrase, “F--- You,”  is spelled out by the first letter of seven consecutive lines along the left margin.

Schwarzenegger has been a prankster at least since his bodybuilding days, when he persuaded competitors that they should eat huge amounts of food -- ice cream, ground nutshells and salt, for example -- that made them sick, according to two of his biographers.

Governor signs bill to help horse-racing industry

California’s horse-racing industry is struggling to compete with expanding casinos and other betting alternatives, and Gov. Arnold Schwarzenegger said Friday he has signed a measure allowing horse track groups to take a larger cut from wagers to fix up their facilities and offer bigger purses.

Senate Bill 517 was backed by several race-related organizations, including the Los Angeles County Fair, Santa Anita Park and the Oak Tree Racing Assn.

The bill by Sen. Dean Florez (D-Shafter) allows a thoroughbred association or fair to increase the amount it deducts from horse-race wagering. It also provides the groups more flexibility to spend the money on improvements, including the purchase of tracks and training areas, and allows winnings that are more competitive with those offered in other states.

Legislative analysts estimate that a 5% increase in the amount taken out of wagers would generate $200 million annually for the horse-racing industry.

Florez said the bill "is about self-reliance, reinvesting in California for growth and protecting jobs for the future."

--Patrick McGreevy in Sacramento

PR firm with ties to governor won’t bid on rail contract

A public relations firm with close ties to Gov. Arnold Schwarzenegger has pulled out of the running for a $9-million contract with California’s high-speed rail board after its successful initial bid was scuttled over concerns about the selection process.

Mercury Public Affairs had been chosen in September as the winner of the five-year public relations contract by a staff panel at the California High Speed Rail Authority. Rail board members expressed concern about the choice, however, after The Times reported that two of the three panelists had close ties to Adam Mendelsohn, a Mercury partner and former Schwarzenegger communications director.

Steve Schmidt, Schwarzenegger’s 2006 reelection campaign manager, is another Mercury partner, as is former Assembly Speaker Fabian Nuñez, a Los Angeles Democrat.

Schwarzenegger to help pave the way for a stadium in City of Industry

Two days before Arnold Schwarzenegger is scheduled to sign legislation paving the way for a new football stadium in the City of Industry, the governor today downplayed concerns that developers of the Los Angeles County venue may take an NFL team from another California city.

"The team doesn’t have to necessarily come from California. It could come from someplace else," Schwarzenegger told reporters. "I don’t think anyone right now has in mind there to take a team and steal it from some California city."

Legislation that would exempt the planned 75,000-seat stadium from state environmental laws was opposed by lawmakers from San Diego, who feared that developer Ed Roski Jr. may use it to attract the San Diego Chargers. A proposed amendment to the bill would have prevented that and also barred Roski from going after the San Francisco 49ers or Oakland Raiders, but the amendment was killed.

John Semcken, vice president of Roski’s Majestic Realty, could not be reached for comment. But in the past, he has not ruled out going after the Chargers, who have the option of getting out of their lease in San Diego.

Schwarzenegger, who lives in Los Angeles County, explained his decision to sign the bill, saying it will create jobs and provide a new venue of entertainment in Southern California.

"We have been trying in Los Angeles to get a football team for a long time, for many, many years," Schwarzenegger said.

-- Patrick McGreevy in Sacramento

Governor raises funds from donors interested in pending legislation

Gov. Arnold Schwarzenegger collected tens of thousands of dollars for his political causes in September from donors interested in some of the 700 bills that were sitting on his desk, and invited other past and potential contributors to a series of meet-and-greet events to raise money.

Since his first campaign for office, Schwarzenegger has pushed to outlaw elected officials, including the governor and lawmakers, from raising money during times of the year when they are making important decisions. However, lawmakers have not embraced the idea.

Case of first lady driving with cellphone 'has been put to bed,' Schwarzenegger says

Gov. Arnold Schwarzenegger said he was going to take "swift action" after California First Lady Maria Shriver was photographed driving with a cellphone to her ear.

But at a news conference in Los Angeles to announce a new law requiring safe storage and logging of ammunition sales, when asked about what actions he had taken to address the cellphone issue, the governor was hearing none of it.

"That matter has already been put to bed," Schwarzenegger said after an audible gasp from some in the crowd who were upset a reporter had deviated from the topic of public safety legislation.

Maria Shriver says, 'I’m sorry,’ for cellphone use while driving

Maria Shriver apologized this afternoon after she was publicly flogged – by her husband, among others -- for talking on her cellphone while driving without a hands-free device, in apparent violation of state law.

TMZ.com on Tuesday posted two photos of Shriver using one hand to drive a car and the other to press a large cellphone to her ear. Her husband, Gov. Arnold Schwarzenegger, signed the cellphone law that went into effect last year. When the pictures were posted, Schwarzenegger wrote on Twitter that he would take unspecified "swift action" against his celebrity wife. But soon after that, TMZ posted a video it said showed Shriver breaking the law again even as the controversy was unfolding Tuesday.

"I'm sorry," Shriver said in her statement today. And, responding to gibes on the Internet about her bulky and seemingly outdated phone, she said she would donate "my favorite old cellphone" to a program run by Verizon that helps domestic violence shelters.

Doctors group suing state over medical board furloughs

The association representing California's 35,000 doctors said today it is suing the state, arguing that the furlough of workers at the state medical board, which licenses and investigates physicians, is putting both doctors and the public in harm's way.

The California Medical Assn., in a lawsuit to be filed today in San Francisco Superior Court, also accuses Gov. Arnold Schwarzenegger and other state leaders of illegally transferring $6 million from the doctors' fee-funded Medical Board of California to aid the state budget.

The combination of the furloughs, which the medical association says total 5,100 lost work hours each month, and the raided funds have created an "unprecedented backlog of license application(s) and excessive delays in disciplinary investigations and enforcements," according to the lawsuit. The medical group seeks to reverse the furlough order and restore the board's funding.

Gov. promises 'swift action' on Maria Shriver cellphone pics

Gov. Arnold Schwarzenegger, who recently revealed that he cuts off the water when his children take extremely long showers, may have entered a new realm of domestic drama this afternoon involving a more formidable member of his household: his wife.

Schwarzenegger promised "swift action" after TMZ.com posted two pictures today of First Lady Maria Shriver driving while apparently violating the hands-free cellphone requirement he signed into law.

The pictures showed Shriver with her right hand on the wheel and her left holding a cellphone to her ear. One was dated July 12, 2009, and the other was taken two days ago, according to TMZ. The pictures appear along with an article that begins, "Maria Maria, cell phone cheatah!"

The state ban on handheld cellphone use while driving went into effect July 1, 2008. It carries a fine of $20 on the first conviction and $50 on the second, not including penalties. Schwarzenegger responded to TMZ founder Harvey Levin via his Twitter feed, writing, "Thanks for bringing her violations to my attention. ... There's going to be swift action."

Removal of educational 'firewall' praised

The nation’s top education official praised Gov. Arnold Schwarzenegger today for signing a bill that will make California eligible for competitive federal education funding.

Schwarzenegger signed the bill, SB 19 by Sen. Joe Simitian (D-Palo Alto), on Sunday, striking a clause in a 2006 law Simitian wrote that bars state use of testing data to determine educator pay or promotion.

Obama administration officials have said that states applying for $4.35 billion in education funding cannot have any "firewalls" between student achievement data and teachers.

“This is a victory for children,” said U.S. Secretary of Education Arne Duncan in a telephone interview this afternoon.

Schwarzenegger and others emphasized that the bill does not guarantee the state any federal funding and urged legislators to approve other legislation, including repealing the state’s charter school cap, to give California a better chance of getting education dollars.

Federal officials have emphasized that the funding program, known as Race to the Top, is competitive and that only a handful of states will get funding.

"Our work in Race to the Top education reform is not done,” Schwarzenegger said in a statement.

As water talks slog on, solution is elusive

Legislative leaders today said they are closer to an agreement on water, but are still working on disagreements before submitting bills to the rest of the lawmakers.

Assembly Republican Sam Blakeslee of San Luis Obispo said he wants a water vote in a matter of weeks, but suggested it may take legislators more time.

"If we rush a fatally flawed deal to the floor before the final compromises are agreed to, we could see this entire package fail, which would set us back years,'' Blakeslee said.

Assembly Speaker Karen Bass said the proposal being discussed among leaders is to go to the voters next year with a $9.4-billion general obligation bond, with only half of the bonds issued before 2015 to reduce the impact on the state's debt and budgets.

Schwarzenegger bashes California bar, blocks it from collecting dues

Accusing the State Bar of California of being "overly political, unresponsive … and inefficient," Gov. Arnold Schwarzenegger vetoed legislation Sunday that allows the legal association to collect its annual dues.

In his veto message, Schwarzenegger cited a recent audit critical of the bar and questioned the group's "impartiality in considering judicial appointments." The July audit found rising costs at the bar and poor internal controls, which allowed a former employee to embezzle nearly $676,000.

"The conduct of the State Bar itself must be above reproach," Schwarzenegger wrote in his veto. "Regrettably, it is not."

Gov.’s surprise bill signings: Harvey Milk recognition, paparazzi restrictions and ammo tracking

Gov. Arnold Schwarzenegger surprised many people today by reversing himself on several pieces of legislation and signing bills similar to ones he had previously vetoed, including measures regulating ammunition sales and recognizing gay rights leader Harvey Milk. He also signed measures to regulate cosmetic surgery and the paparazzi, both introduced in response to incidents involving celebrities.

The Republican governor signed a bill, opposed by many conservatives, that requires sellers of handgun ammunition, starting in 2011, to keep a log of information on sales including the buyer's thumbprint, signature and driver's license data.

"Although I have previously vetoed legislation similar to this measure, local governments have demonstrated that requiring ammunition vendors to keep records on ammunition sales improves public safety,'' Schwarzenegger said in a statement on AB 962 by Assemblyman Kevin De Leon (D-Los Angeles).

Because the governor had vetoed other bills restricting guns this year, the executive of Gun Owners of California was baffled that the governor agreed to track ammunition sales.