Schwarzenegger terminates $13m deal

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The Independent US

With his approval ratings plummeting and his political future in question, Arnold Schwarzenegger has ended his financial relationship with a group of bodybuilding magazines after news of his income from the deal - as much as $8m (£4.6m) over five years - threatened to turn into a conflict-of-interest scandal.

The Hollywood superstar turned governor of California said on Friday that he was giving up as executive editor of Muscle & Fitness and Flex magazines, and with it the lucrative contract that was signed only two days before he was sworn in as governor in November 2003.

"I don't want there to be any question or doubt that the people have my full devotion," he said in a statement.

The move came two days after details of the deal with American Media Inc, which owns the magazines, became public via a filing with the US Securities and Exchange Commission. Under the deal, Mr Schwarzenegger was promised one per cent of advertising revenue from the magazines from 2004-2009, with a guaranteed minimum of $1m a year.

While not illegal under California law, the deal was described by Larry Noble of the Center for Responsive Politics, a watchdog following money in politics, as "one of the most egregious apparent conflicts of interest that I have seen".

For 24 hours, the Schwarzenegger camp was defiant. A spokesman described the furore as "much ado about nothing".

But the governor is already in political trouble because of his ham-fisted handling of California's budget woes, his declarations of warfare against nurses, firefighters and teachers, and his insistence - in the face of public disapproval -- on holding a special election in November to go over the heads of the state legislature and ask the voters to approve his controversial anti-tax, anti-public union agenda.

A recent opinion poll put his approval rating among registered voters at 37 per cent, just over half of what it was a year ago when he was being hailed as a politician with a golden touch and a bright future. Many commentators now doubt whether he will run for re-election next year.

Mr Schwarzenegger loves to complain that his political adversaries are at the mercy of "special interests" - a complaint that has been thrown at him because he has vetoed legislation that would have cracked down on the kind of dietary supplements whose advertisements in fitness magazines have been contributing to his bank balance.

Questions, however, still remain about how much money Mr Schwarzenegger will end up gaining from American Media. He has not pledged to return any money received so far. Because he has refused to make his tax returns public, it is impossible to ascertain how much has been paid out already.

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