California Gov. Arnold Schwarzenegger has a $16 billion budget deficitdilemma on his hands. He insists he doesn't want to cut education. Buthe proclaims with equal fervor that he won't raise taxes.

So what's a post-partisan governor to do? Close tax loopholes, of course.

Now one governor's loophole may be another politician's tax increase.But according to two media outlets, Schwarzenegger told the audience ata Pleasant Hill, Calif., budget forum last Wednesday that the state should consider closing tax loop-holes and in his mind that includes the lack of a sales tax on professional services -- including legal services.

"We have to look at the way we are taxing," Schwarzenegger is reportedas saying. "There's whole new economies that are developing,service-oriented economies."

Asked about the comments on Thursday, finance department spokesman H.D.Palmer said the governor was just explaining that there are a lot ofdeficit-eliminating ideas "out there."

"Basically, it was in the context of we ought to have everything on thetable as we ought to be having discussions about them sooner ratherthan later," Palmer said. "But we're not carrying a bill in our backpocket, if that's what you're asking."

A one-time law firm associate, disbarred in 1988 for insider trading, then re-admitted in 2003, has been disbarred again for misrepresenting his past in applications both for reinstatement and for non-legal licenses to work as an insurance agent and a stock broker.

Israel G. Grossman committed his insider trading offenses while working as an associate at the firm now known as Kramer Levin Naftalis & Frankel. The confidential information he passed to friends and family about transactions the firm was working on netted them $1.5 million in trading profits.

Arrested and convicted in 1987, the then-34-year-old Grossman was sentenced to two years in prison. He was also later found jointly and severally liable to the Securities and Exchange Commission for $2.5 million. The case attracted considerable attention at the time, coming soon after prosecutors ensnared the much larger insider trading ring led by investment banker Dennis Levine.

But the Appellate Division, 1st Department, ruled last week that the now 55-year-old Grossman had consistently denied having a prior conviction on professional licensing applications to the state insurance department and the National Association of Securities Dealers. He failed to disclose these applications in his successful quest for reinstatement to the bar in 2003, even though he was facing criminal prosecution at the time for allegedly lying to the NASD about his past.

The high court said Monday it will hear arguments in a case over whether the government can ban "fleeting expletives," one-time uses of familiar but profane words.

The case grew out of decision by the Federal Communications Commission in 2006 that two broadcasts of the "Billboard Music Awards" show were indecent, though the agency levied no fines. Cher uttered one fleeting expletive beginning with "F" and Nicole Richie uttered a variation of the same word and another one beginning with "S."

Fox Broadcasting Co. and others appealed the decision, saying that the agency had changed its enforcement policy without warning and that the new ban was unconstitutional.

A federal appeals court in New York agreed, 2-1, throwing out the ban and sending the case back to the agency, which appealed to the Supreme Court.

FCC Chairman Kevin Martin told The Associated Press Monday that he was pleased the justices are stepping in. He said the appeals court had "put the commission in an untenable position" by giving it the responsibility to enforce indecency rules but not the tools to take action.

Attorney General Michael B. Mukasey, who spent most of his adult life as a federal prosecutor and a judge, will return to the courtroom later this month to argue a case before the Supreme Court, officials said yesterday.

Mukasey will urge the justices to reinstate a sentence overturned by an appeals court in the case of Ahmed Ressam, an al-Qaeda operative convicted of a plot to blow up Los Angeles International Airport in 1999.

The last attorney general to handle a case before the high court was Janet Reno in 1996, court officials said. William P. Barr and Richard Thornburgh also argued cases while serving as attorneys general in the administration of George H.W. Bush.

Justice Department spokesman Peter A. Carr said there is a custom, not always followed, for attorneys general to argue at least one Supreme Court case during their term. He declined to comment on why Mukasey chose the Ressam case.

Mukasey, 66, is a retired federal judge who oversaw several high-profile terrorism-related trials while on the bench in New York City. He is scheduled to appear for Supreme Court arguments on March 25 and plans to conduct moot-court sessions to prepare, officials said.

Ressam was arrested near the U.S.-Canada border in December 1999 after customs agents found 124 pounds of explosives in the trunk of his car as he disembarked from a ferry in Port Angeles, Wash. He was convicted in 2001 of nine charges in connection with the plot, but after ceasing cooperation with the FBI was sentenced to 22 years in prison in 2005.

The U.S. Court of Appeals for the 9th Circuit threw out the sentence in 2007 after finding that one of the charges was applied improperly. The federal government disagrees and wants the sentence reinstated.

Discussions about the sale of the Touro Law Center to Stony Brook University never made it past the preliminary stage, Stony Brook president Shirley Strum Kenny said yesterday.

"We had very preliminary talks," Kenny said. "We were certainly not at the point of negotiating."

Bernard Lander, founder and president of Touro College, whose main campus is in Manhattan, said yesterday he would never sell the law school. The college operates the Jacob D. Fuchsberg Law Center in Central Islip.

"I never met with anybody or spoke to anybody at the state university," Lander said in an interview. "I had one meeting with Sen. [Kenneth] LaValle. Period. I never negotiated with anybody." Lander said that when Touro law school dean Lawrence Raful asked him for his opinion and that of the school's board, "I said the law school charter is never for sale. Period."

Talk of a possible sale surfaced in early February in an effort to make Stony Brook the second university after the University of Buffalo in the State University of New York system to have a law school.

Kenny confirmed she and Lander had never met to discuss the law school. "There were conversations with people in the law school," she said, "but they were very preliminary discussions. We never got into any negotiations."

Kenny said those discussions did serve a purpose: They revived the idea of adding a law school at Stony Brook.

"Dr. Kenny and I have agreed to move forward and look at and explore the possibility of establishing our own law school at Stony Brook," said LaValle (R- Port Jefferson).

"It's not a new concept," Kenny said, noting that university officials first considered the addition of a law school in the 1970s and then again in the 1980s. "But now people feel it's the last piece of putting together a major research university. ... It's something we will be considering very seriously."

Though no agenda has been put in place, Kenny said a committee will be formed to study the feasibility of building a law school. "I think there is a lot of interest now in the possibility of developing a law school at Stony Brook. Now, nothing has happened on that score."

The California Supreme Court is seemingly as divided as society is over gay marriage.

For more than three hours Tuesday, the seven justices of the state's high court shifted back and forth on whether to uphold California's ban on same-sex marriage, at times appearing to spar with each other as they weighed their most important civil rights case in decades.

The justices peppered lawyers on both sides of the case with dozens of questions that made predicting an outcome a fool's game. The court is reviewing a similarly divided 2006 appeals court ruling that upheld California's ban on gay marriage and a 2000 ballot initiative confining marriage to a union between a man and woman.

Underscoring the passions behind the conflict, demonstrators on both sides of the issue lined up outside the Supreme Court building, armed with placards and chants as they awaited the crucial legal arguments. Inside, an overflow crowd unable to get a seat in the courtroom jammed a downstairs auditorium to watch the arguments on a big-screen television, a boisterous group that cheered and jeered as though attending a high school basketball game.

But the stakes were evident in the courtroom, as the justices aired their first public views in a case they must decide within 90 days. Justices Marvin Baxter and Ming Chin, perhaps the court's most conservative members, seemed to have the deepest reservations about siding with civil rights groups and San Francisco city officials,

who argue that the ban violates the equal-protection rights of gay and lesbian couples seeking the power to wed.
But Baxter and Chin were also frequently joined by Justice Carol Corrigan, a moderate who expressed sympathy with the civil rights argument but had major concerns over tampering with the will of the voters. Corrigan indicated several times she may agree with the majority in the appeals court ruling. That court found the Legislature or voters should decide whether to change marriage laws, not judges.

"Our views on this topic are in the process of evolution," Corrigan said to Therese Stewart, San Francisco's chief deputy city attorney, who argued in favor of gay marriage. "There is substantial difference of opinion about what that evolution should look like. Who decides where we are in California in that evolution?" she asked. "Is it for the court to decide or the voters to decide?"

Jim Clark, who was the former governor's chief of staff, agreed to plead guilty to a single count of conspiracy fraud in a filing in U.S. District Court in Anchorage. He was scheduled to enter his plea at an arraignment hearing on Tuesday.

Clark admitted to taking $68,550 in illegal contributions from the state's largest oil-services company, VECO Corp, for Murkowski's failed 2006 reelection bid in exchange for working on VECO's behalf to secure an industry-friendly version of tax legislation, according to the plea agreement.

He is the first official from the Murkowski administration to be charged in a federal criminal investigation that has so far resulted in convictions of three former state lawmakers, the indictment of a fourth and guilty pleas from two top VECO executives and one former lobbyist.

Murkowski, who was also a former U.S. senator, was soundly defeated in the 2006 Republican primary by Sarah Palin, Alaska's current governor who ran as an anti-corruption reformer.

Clark and VECO conspired to hide the illegal contributions "in a manner so that the public would be deceived and the payments would not be disclosed, as required by law," according to charging documents.

The federal investigation centers around a revision of an oil-tax law that passed the state legislature in 2006 at Murkowski's urging. Bill Allen and Rick Smith, two former VECO executives, pleaded guilty to bribing state lawmakers for a pro-industry version of the bill and other favorable actions.

Former state Senate President Ben Stevens, son of powerful U.S. Senator Ted Stevens, received much of that bribe money, Allen and Smith testified in court last year.