Schwarzenegger cuts magazine tie

Calif. governor accused of conflict of interest in multimillion-dollar deal

July 16, 2005|By LOS ANGELES TIMES

SACRAMENTO, Calif. - A day after an aide said the issue was "much ado about nothing," Gov. Arnold Schwarzenegger canceled his $5 million consulting contract with a magazine publisher yesterday amid widespread complaints that he had a conflict of interest with his job as California's chief executive.

Schwarzenegger said he would forgo any compensation from Weider Publications: "I don't want there to be any question or doubt that the people have my full devotion."

Under the contract - formalized two days before Schwarzenegger was sworn into office - he would have received his first paycheck from American Media, a successor of Weider, in 2006. The deal could have paid him more than $8 million, depending on how business improved, but no less than $5 million.

Rob Stutzman, the governor's communications director, said Thursday that the questions about the five-year agreement were "much ado about nothing." As governor, Schwarzenegger has refused to accept his $175,000 salary.

Disclosure of details of the deal - revealed Wednesday afternoon through a corporate filing with federal regulators - brought sharp criticism from some ethics experts, watchdog groups and state legislators.

Under the governor's agreement, he got a fee based on 1 percent of the advertising revenue of various health and fitness magazines.

Much of that revenue comes from makers of nutritional supplements, and the governor vetoed legislation last year to impose restrictions on them. Stutzman said Schwarzenegger rejected the bill because it was poorly drafted and would have created confusion.

The Los Angeles Times is a Tribune Publishing newspaper.

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