Schwarzenegger’s $8 million deal

Is California governor’s fitness magazine contract a conflict of interest?

	California Gov. Arnold Schwarzenegger congratulates Dexter Jackson, the winner of the Arnold Classic, a bodybuilding and fitness competition, after the finals in March in Columbus, Ohio.
Jay Laprete / AP

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updated 9:52 a.m. ET July 14, 2005

SACRAMENTO, Calif. - Gov. Arnold Schwarzenegger is being paid at least $1 million a year as a consultant to a company that publishes fitness magazines, a deal critics say is a serious conflict of interest for the former bodybuilding champion.

The payments, revealed Wednesday in filings with the U.S. Securities and Exchange Commission, are from American Media Operations, a subsidiary of the company that publishes magazines including Flex and Muscle & Fitness.

Critics say the contract is a conflict of interest because Schwarzenegger’s pay comes from advertising revenue and the magazines often feature ads about dietary supplements.

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The governor last year vetoed a bill that would have imposed government regulations on the dietary supplement industry.

‘Appearance of ... conflict’
Bill sponsor Sen. Jackie Speier, a Democrat, called on Schwarzenegger to cut off all ties with the magazines. “Whether it is an actual conflict or not, it certainly gives the appearance of being a conflict,” Speier said.

Independent political observers agreed, saying the contract showed a lapse in judgment by the Republican governor.

“This is one of the most egregious apparent conflicts of interest that I have seen. This calls into question his judgment as to who he is working for, and it calls into question what he thinks he owes the public,” said Larry Noble, executive director for the Center for Responsive Politics in Washington.

State law allows elected officials to keep outside jobs.

Full disclosure
Margita Thompson, the governor’s spokeswoman, said Schwarzenegger had disclosed all his financial holdings and added that the deal with the fitness magazines does not represent a conflict of interest.

“The governor did not direct sales or marketing activities of American Media and did not have personal contact with any advertisers to generate the advertising revenue,” she said.

Schwarzenegger’s consulting contract calls for him to receive 1 percent of the magazines’ ad revenue each year for five years, a sum that could total $8 million. The contract specifies that the payment will not fall below $1 million in any year.

Schwarzenegger announced last year that he had agreed to serve as executive editor for Muscle & Fitness and Flex. He writes monthly columns for both, but his salary for those jobs has not been revealed.