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Jul 15, 2005 - 01:00 AM


Governor Schwarzenegger under fire from government watchdogs who claim he's getting a salary from a special interest group

KATIE COURIC, co-host: Now to politics in the golden state. California Governor Arnold Schwarzenegger is under fire once again, this time for trying to pump up his bank account. NBC's Campbell Brown is here with more. Hi, Campbell.

CAMPBELL BROWN, anchor: Well, that's right, Katie. Although California law does say elected officials can have outside jobs, this new disclosure of the governor's latest deal is drawing fire from government watchdogs who say he's getting muscled around by a special interest.

Governor ARNOLD SCHWARZENEGGER: I, Arnold Schwarzenegger...

BROWN: Just two days before Arnold Schwarzenegger became California's self-proclaimed reform governor in 2003, the former body builder inked a deal with the publisher of Muscle & Fitness and Flex magazines. The five-year consulting deal is worth at least $5 million. The agreement came to light in documents filed with the Securities & Exchange Commission on Wednesday, which refer to the governor as "Mr. S." It gives him 1 percent of ad sales, most of those ads for performance enhancing and dietary supplements. Last year, the governor vetoed a bill banning the use of many of those supplements in school sports.

Mr. DOUGLAS HELLER (Foundation for Taxpayer and Consumer Rights): This is as severe as a conflict gets, again, because it's so direct and clear. He did veto legislation and at the same time, he gets paid personally based on their ad purchases in magazines that he's involved with.

BROWN: At a base closing hearing Thursday, Schwarzenegger did not address the issue but a spokesman defended the veto.

Mr. ROBERT STUTZMAN (Schwarzenegger Spokesman): The senators' bill from a year ago would not have defined well what a performance enhancing supplement would be, and therefore it would have led to confusion.

BROWN: With the governor's poll numbers still sagging, even the appearance of a conflict of interest could spell trouble.

Mr. KAREEM CRAYTON (USC Law School): People have raised questions about whether or not his advisors were maybe giving him advice that isn't as well suited for him. The more difficulty possibility is that the governor himself decided against advice not to proceed with this and I think that's going to be one concern that is going to dominate the next couple of weeks.

BROWN: Now last year, Governor Schwarzenegger was named executive editor to the magazines. He writes a monthly column with the $250,000 salary for that going to charity, Katie.

COURIC: So is anything he's doing here, Campbell, is illegal?

BROWN: Technically, it doesn't appear so but it's another example, his critics say, of the disconnect that Governor Schwarzenegger has between what's OK if you're a movie star vs. what's OK if you're the governor of California.

COURIC: All right. Campbell Brown, we'll see you in a few minutes, Campbell. Thanks so much.

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