ARNOLD'S MAG DEAL: A FIT THING TO DO?

Byline: David M. Drucker Sacramento Bureau

SACRAMENTO - Gov. Arnold Schwarzenegger's staff defiantly lashed out at critics Thursday and defended the one-time bodybuilding champion who faces conflict-of-interest accusations over his multimillion-dollar consulting deal with two muscle-and-fitness magazines.

The criticism was in response to a Securities and Exchange Commission filing by American Media Inc. showing that the governor could earn up to $8 million over five years depending on advertising revenue for his work as an editorial consultant and columnist for Flex and Muscle & Fitness, magazines that are produced by Woodland Hills-based Weider Publications.

Aides said his work for them reflects his long-standing commitment to body building and did not influence his veto of a bill that would have regulated dietary supplements, which constitute a large portion of the magazines' advertisers.

``Why the interest now, instead of last spring when we announced this deal was being inked, that there was compensation coming to the governor for his consulting work with the magazine? What's changed?'' asked Schwarzenegger communications director Rob Stutzman. ``It's a news story because it's the lemming attitude of the press.

``The governor clearly, clearly told everybody here, including all the people of California, that he had a business arrangement with a magazine that he's been involved in for over 30 years. We disclosed that there was such an agreement and that there was significant income involved.''

Stutzman also said the governor's income would likely be closer to $5 million, with the remainder of the money paid by American Media Inc., the company that bought Weider and also publishes the National Enquirer and other tabloids and magazines. Money earned beyond the $5 million likely would go to nonprofit Schwarzenegger charities such as the California Council on Physical Fitness and Sports.

Schwarzenegger disclosed the deal when it was signed last year, but did not publicize his compensation. The governor does not accept the $175,000 annual salary that comes with his office and state law allows him to earn outside income.

He appeared at a hearing in Los Angeles on military-base closures but avoided answering questions about the deal.

The magazines in question were purchased in the past few years from Joe Weider, the body-building guru who originally brought Schwarzenegger to America from Europe in the 1960s. Schwarzenegger, a seven-time Mr. Olympia champion, has maintained a close relationship with Weider and the sport of body building ever since, Stutzman added.

Government watchdog groups nevertheless cried foul, with one Democratic state senator who is running for higher office accusing Schwarzenegger of possibly vetoing her bill for dubious reasons. Still, none of the governor's critics alleged that he did anything illegal.

``The revelation of this contract is very disturbing,'' said Susan Lerner, executive director of California Clean Money Campaign. ``How can the public feel confident that the governor is looking out for their interests when he vetoed legislation that might adversely affect a company putting $8 million into his pockets?

``Actions like these, while technically legal, tremendously exacerbate the public's perception that public policy decisions are made on some basis other than what is best for all Californians.''

Bob Stern of the Center for Governmental Studies said Schwarzenegger's veto was acceptable because the bill had the potential to affect an industry rather than an individual or specific entity.

``There's considered to be an exemption from disqualification on industry bills,'' he told The Associated Press. ``But the larger question is - should he be receiving the income? And the answer is no. ... Outside income from someone who wants something from the state, that's crossing over the line.''

Sen. Jackie Speier, D-Hillsborough, and a candidate for lieutenant governor, said there was nothing illegal about how Schwarzenegger handled Senate Bill 1630 last year.

But she suggested that Schwarzenegger vetoed it because he didn't want to cost the supplement companies money, not for the policy decisions stated in his veto message. Such firms advertise heavily in Flex and Muscle & Fitness, and Schwarzenegger's deal calls for him to receive 1 percent of the publications' revenue during the life of his contract.

The bill would have required high schools to better monitor the dietary and athletic supplements consumed by high school athletes.

``I call on Gov. Schwarzenegger to sever his ties with American Media and the supplement industry,'' Speier said. ``Whether his $8 million contract with an industry that has business at the state Capitol is an actual conflict or not, it certainly gives the appearance of being a conflict.''

Speier has since reintroduced her bill as SB 37.

David M. Drucker, [phone]

david.drucker(at)dailybulletin.com

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LEGAL QUESTIONS ABOUT ARNOLD

- Associated Press