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Tabloid's Deal With Woman Shielded Schwarzenegger

August 12, 2005|Peter Nicholas and Carla Hall | Times Staff Writers

SACRAMENTO — Days after Arnold Schwarzenegger jumped into the race for governor and girded for questions about his past, a tabloid publisher wooing him for a business deal promised to pay a woman $20,000 to sign a confidentiality agreement about an alleged affair with the candidate.

American Media Inc., which publishes the National Enquirer, signed a friend of the woman to a similar contract about the alleged relationship for $1,000.

American Media's contract with Gigi Goyette of Malibu is dated Aug. 8, 2003, two days after Schwarzenegger announced his candidacy on a late-night talk show. Under the agreement, Goyette must disclose to no one but American Media any information about her "interactions" with Schwarzenegger.

American Media never solicited further information from Goyette or her friend, Judy Mora, also of Malibu, both women said. The Enquirer had published a cover story two years earlier describing an alleged seven-year sexual relationship between Goyette and Schwarzenegger during his marriage to Maria Shriver, California's first lady.

On Aug. 14, 2003, as candidate Schwarzenegger was negotiating a consulting deal with American Media, the company signed its contract with Mora, who said she received $1,000 cash in return. Goyette declined to say whether she received the $20,000 promised in her contract.

Rob Stutzman, the governor's communications director, said he believed Schwarzenegger did not know of American Media's deals with the women. Schwarzenegger is on vacation and not available for comment, Stutzman said.

Stutzman denied any link between AMI's deal with Schwarzenegger and the company's agreements with the two women.

"There is no connection with his business with AMI or AMI's business of purchasing the rights to stories," Stutzman said. "That's what they do. Obviously, part of their business is the tabloid business."

The women might have been in a position to embarrass Schwarzenegger in his bid for the governor's office. When Schwarzenegger announced his candidacy on "The Tonight Show," he speculated that he would face accusations of infidelity.

Host Jay Leno asked if he was prepared for a bruising campaign, and Schwarzenegger replied: "I know that they're going to throw everything at me and they're going, you know, to say that I have no experience and that I'm a womanizer and that I'm a terrible guy, and all these kinds of things are going to come my way."

But American Media was effectively protecting Schwarzenegger's political interests, said a person who worked at the company when the contracts were signed. At the same time, American Media was crafting a deal to make Schwarzenegger executive editor of Flex and Muscle & Fitness magazines, helping to lure readers and advertisers.

If American Media was buying exclusive rights to the women's stories, said the person, who has a confidentiality agreement with the company and spoke on condition of anonymity, "why didn't the stories run? That's the obvious question."

"AMI systematically bought the silence" of the women, said the person. Schwarzenegger "was a de facto employee and he was important to their bottom line."

Schwarzenegger biographer Laurence Leamer wrote in his book, "Fantastic: The Life of Arnold Schwarzenegger," that Schwarzenegger understood the tabloids would not skewer him if he was entering a business relationship with the company -- although Schwarzenegger told Leamer he did not specifically seek such assurances.

Indeed, during the recall campaign, American Media put out a 120-page magazine celebrating Schwarzenegger as an embodiment of the "American dream."

The Enquirer did run a story repeating allegations in the British media that Schwarzenegger had an extramarital affair. The story was published first on its website before the election, and then in the newspaper three weeks after his election victory. But it was not prominently displayed, running on Page 24.

American Media, which did not respond to repeated requests for comment, reached its agreement with Schwarzenegger on Nov. 15, 2003, two days before he was sworn in as governor. The deal was to pay him, by the company's estimates, at least $8 million over five years and no less than $5 million.

Schwarzenegger dropped the contract last month after the arrangement was made public in the Los Angeles Times and the Sacramento Bee. He said he plans to continue writing a monthly column for the two magazines.

American Media's contracts with Goyette and Mora, both titled "Confidentiality Agreement," are two pages long and never expire; they bind the two women "in perpetuity."

Goyette's agreement states that she is not to disclose "conversations with Schwarzenegger, her interactions with Schwarzenegger or anything else relating in any way to any relationship [she] ever had with Schwarzenegger," except to American Media.

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