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Democrats file complaint over Schwarzenegger deal

July 19, 2005

By Adam Tanner

SAN FRANCISCO (Reuters) – California Democrats filed a
complaint on Tuesday against Gov. Arnold Schwarzenegger to the
state’s political watchdog, alleging ethics violations related
to his financial links to two fitness magazines.

Art Torres, California Democratic chairman, even raised the
possibility the growing dispute could result in jail time.

The Republican Schwarzenegger stepped down as executive
editor of “Muscle & Fitness” and “Flex” magazines on Friday,
foregoing a contract the company said was worth more than $13
million over five years.

Reuters first reported financial details of the deal with
American Media Operations last Wednesday.

In the complaint to the Fair Political Practices Commission
(FPPC), Torres said the payment violated conflict of interest
rules. In an interview, he raised the possibility the
investigation could lead to a criminal conviction.

“Legislators have gone to prison over $1,200 honorariums
that they had accepted illegally,” Torres said. “This might be
an alleged gift rather than a consulting agreement which far
exceeds what might be the value of writing a column.”

He asked the FPPC to demand that Schwarzenegger return
funds already received.

“The governor didn’t go anything wrong; he won’t return the
money,” Schwarzenegger spokeswoman Margita Thompson said. “It
is a filing that has no merit; it is a specious claim.”

CONFLICT, OR NOT?

Democrats say the American Media contract constituted a
conflict of interest because the governor vetoed a bill last
year that would have regulated nutritional supplements
manufactured by the main advertisers in the muscle magazines.

“There is no conflict of interest,” Thompson said. “Under
the Political Reform Act the governor has a financial interest
in American Media but does not, by virtue of his contract, have
an interest in those who advertise in their magazines.”

The FPPC typically takes months or even years to
investigate cases. It has the power to fine up to $5,000 for
violations or to refer to matter to civil court.

Torres said the FPPC investigation could also prompt
criminal charges by local or federal prosecutors if wrongdoing
is found. He added that because details of Schwarzenegger’s
private dealings were only now becoming public he did not know
is such an outcome was appropriate.

Even if nothing comes of the FPPC investigation, the
Democratic complaint puts Schwarzenegger on the defensive as he
is trying to build support for several initiatives on a special
election he has called for this November.

On Monday, the multimillionaire Hollywood star promised
openness about his finances and joked that forgoing the outside
income could mean fewer diamonds for his wife Maria Shriver.

“I think we are beyond the point where he can continue to
expect people to just laugh it off with a joke about his wife’s
diamonds,” said Karen Getman, who served as chairman of the
FPPC under Schwarzenegger’s Democratic predecessor Gray Davis.

She said Schwarzenegger faced a dilemma because either he
was paid very much for little magazine work or, if his work
load was more substantial, he could have been diverting
attention from California’s affairs. “No matter how you slice
and dice this one, something doesn’t add up just right,” she
said.




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