• Rep. Jane Harman's wiretapped conversation was with an AIPAC supporter who said Haim Saban would withhold campaign funds from Speaker Nancy Pelosi to help Harman become chairman of the House Intelligence committee. A Harman statement, meanwhile, says she never lobbied the Justice Department on behalf of pro-Israel lobbyists under investigation for espionage. NYT, LAT, KPCC, Breeze
• Mayor Villaraigosa's proposed budget is "staked heavily on his ability to win concessions from employee unions and cut deals to lease parking garages, two essential yet unresolved components to closing an estimated $530-million shortfall." LAT, DN, KPCC
• The L.A. County budget announced Monday is three times larger than the city's and affects many more people, but the coverage is much more subdued, as always. LAT, DN
• Gov. Schwarzenegger is selling access to a cocktail party at his and Maria Shriver's Brentwood home on Thursday night to donors who cough up at least $100,000 for his political fund, the California Dream Team. Bee
• A 10-mile car-pool lane project on the northbound 405 between the Santa Monica (10) and Ventura (101) freeways has been put on hold due to funding issues. DN
• Matt Drudge has gone almost completely underground.since appearing at a Hillary Clinton campaign event last year. The New Republic
• Fourteen children died of abuse and neglect in Los Angeles County last year despite coming from families that had been under the scrutiny of child welfare officials, records show. LAT
• A 45-year-old former Roman Catholic priest filed a lawsuit that accused another former priest of sexually abusing him in the rectory of a La Habra church when he was a teenager. LAT
• More Americans now make their primary income from blogging than work as computer programmers, firefighters or bartenders. WSJ
• More than 70% of Californians aged 15 to 24 were born and raised in the state, the makings of the first generation of adults with a majority born here, says a USC study. LAT
• A Buca di Beppo restaurant in Claremont cancelled an appearance tonight by Minuteman founder Jim Gilchrist. SGV Tribune
• That mansion that burned in the unincorporated area north of Chatsworth probably got it worse because the alarm system that tried to call the fire department wasn't re-programmed to dial 1-818 per the new rules. KTLA
• Hollywood Boulevard will close Thursday between Vine and Gower for a free 8 p.m. show by Depeche Mode to promote the band and the new W hotel. LAT
• Two animal rights activists were charged by a county grand jury with stalking, threatening and harassing UCLA researchers. LAT, UCLA Newsroom
• No film permits for car commercials have been issued in L.A. this year. The story focuses on the 2nd Street tunnel in Downtown. Dan Neil/LAT
• Rolling Stone closed its last office in San Francisco, where the magazine began 42 years ago. SF Chronicle
• Larry Mantle is off in New York this week with his family; the Times' David Lazarus guest hosts on "Airtalk."

LA Biz Observed | Here in Malibu