SAN FRANCISCO — California must either cough up $250 million for prison health care by Nov. 5 or be ready to explain a week later why two top state officials shouldn't be held in contempt of court, a federal judge ruled Monday.

Senior U.S. District Judge Thelton Henderson seemed irate three weeks ago when attorneys for Gov. Arnold Schwarzenegger and Controller John Chiang insisted it would be improper to fork over the quarter-billion already appropriated for prison health care improvements under AB900, a $7.8 billion prison-expansion bill Schwarzenegger signed into law in May 2007.

The judge's mood seemed little improved Monday; late Friday afternoon, the state's lawyers had filed a brief arguing receiver J. Clark Kelso — whom Henderson has placed in charge of fixing the constitutionally inadequate system — must provide more detail of his plans for the money before the state will cut the money loose.

Henderson said Monday that argument left him "deeply troubled," particularly because Kelso's motion for the money has been pending for two months. "It appears at this point there's no good cause for defendants' waiting for the eve of this hearing."


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Henderson in 2005 found the state — even since a class-action lawsuit's 2002 settlement — hadn't brought prison health care up to constitutional muster, and so he ordered it into receivership. In February 2006, he named Bob Sillen, formerly the Santa Clara Valley Health & Hospital System's executive director, to take over; Sillen assessed the broken system and made successful reforms in areas such as doctor and nurse staffing and pharmacies, but Henderson replaced Sillen with Kelso in January.

Kelso's plan calls for building seven facilities with 10,000 beds for chronically sick or mentally ill inmates by mid-2013, as well as improving existing facilities at the state's 33 prisons.

Despite Schwarzenegger's support, the plan was repeatedly rejected this year by Legislative Republicans.

Kelso contends he has a team of 300 planners developing criteria and blueprints for the facilities, but he's running out of money and needs the $250 million to continue the work over the next few months.

Deputy Attorney General Dan Powell argued Monday that since Kelso filed his motion a few months ago, the Legislature finally passed a budget containing $1.5 billion for the receiver's operating costs, so he's not really out of money.

And Powell argued that Kelso has submitted only a draft plan of how the quarter-billion would be spent; that's not enough for the state to determine whether the plan falls within the bounds of state and federal laws, he said.

The federal Prison Litigation Reform Act precludes federal judges from ordering prison construction, Powell said, and compelling the state to pay this money out of its general fund could be an unprecedented violation of California's sovereign immunity under the 11th Amendment.

But James Brosnahan, representing Kelso, argued the $1.5 billion in the state's annual budget is for the ongoing, constant costs of caring for sick inmates; diverting that to construction would mean less care in an already inadequate system.

Kelso has given the state more than enough information about his plans, he said, and this case has progressed far beyond the Prison Litigation Reform Act's reach.

Brosnahan said California's governor has agreed the state's prison health care is constitutionally inadequate; acquiesced to the court's authority in fixing it; and publicly supported the receiver's plan, but is stonewalling now that the bill is coming due.

"Unless this state gets their act together, some number of prisoners will die," he told Henderson.

Kelso and Brosnahan provided Henderson with a proposed order demanding the state hand over the $250 million by Nov. 5, or else return to court Nov. 12 to show why Schwarzenegger and Chiang shouldn't be held in contempt of court — a finding that could lead to steep fines levied each day the officials continue withholding the money.

Henderson took the matter under submission at the end of Monday's 40-minute hearing, ordering Kelso and Brosnahan to proceed "full speed ahead" while he carefully considered the proposed order. By midafternoon, Henderson had signed the order.

After Monday's hearing, Brosnahan said if the state doesn't pay up and the Nov. 12 contempt hearing becomes necessary, he'll consider calling state officials to the witness stand. He didn't elaborate on whom the witnesses might be.

Reach Josh Richman at 510-208-6428 or jrichman@bayareanewsgroup.com. Read the Political Blotter at www.ibabuzz.com/politics.