Sooo many fingers in the "pot"....soooooo little time......

Governor's game role could pose a conflict
By Andy Furillo -- Bee Capitol Bureau
Published 2:15 am PDT Tuesday, August 9, 2005
Story appeared on Page A1 of The Bee

The manufacturers promise the video game will let the participant "rip through deep levels of non-stop arcade-shooter action" and "smash enemies with power punches and combo moves," with the goal of destroying the Terminator's enemies and saving mankind.

But "Terminator 3: The Redemption" also poses a potential conflict-of-interest problem for Gov. Arnold Schwarzenegger, as legislation that seeks to impose restrictions on video games heads his way.

With controversy still lingering over Schwarzenegger's multimillion-dollar payment for serving as a muscle magazine editor, the Legislature is considering a bill that would ban the sale of violent video games to those younger than 17, affecting an industry that pays the Republican governor thousands more in outside income.


Schwarzenegger has already signed legislation requiring retailers to post rating information in their stores and separate video game sales racks accordingly.

This year's game legislation - which mirrors a measure that never made it out of committee last year - would not specifically affect Schwarzenegger's game.

The measure, Assembly Bill 450 by Assemblyman Leland Yee, D-San Francisco, is aimed at just a handful of products, most notably, the highly controversial "Grand Theft Auto," which features the direct assassination of police officers and the maiming and beheading of female victims.

But one of the state's leading experts on regulatory and public-interest law said that by signing the measure, Schwarzenegger could create a market shift that would divert sales from the targeted group of videos to the less-violent Terminator-type games.

"If he vetoes or signs the bill, the market would be affected," said Robert C. Fellmeth, a law professor and founder of the University of San Diego's Center for Public Interest Law. "Sales on his game would go down if he goes one way and would go up if he goes the other. So you have a decision to make, and one or the other is going to affect revenues. You can't get around that."

Gubernatorial spokeswoman Margita Thompson said the suggestion that Schwarzenegger is in any kind of an ethical bind when it comes to considering video game legislation is "an absolutely unfair thing."

She said the video game bills are targeted "across an entire industry" and not just the governor's outside sources of income. Therefore, she said, "there is no conflict."

"All the financial dealings are in a blind trust, so there is that component part," Thompson added. "This is an unprecedented governor who in his past life has been involved in myriad industries successfully. It doesn't mean he can't govern. In fact, it may be a benefit because of his unique background, as opposed to someone who has never been in the private sector before."

Video game industry giant Atari announced its deal with Schwarzenegger last year to produce and distribute the well-received "Terminator 3" celluloid shoot-'em-up. Since its release in September, the game has become Atari's 24th most popular title in a stable that accounted for $395.2 million in revenues, according to the company's filings with the Securities and Exchange Commission.

According to a May 2003 article in Business Week magazine, Schwarzenegger is receiving 20 percent of the computer-game sales related to the "Terminator 3" movie, although the article did not say if it was a percentage of the gross or the net.

Details of Schwarzenegger's video games deal are not spelled out in his statement of economic interests, and his financial adviser, Paul Wachter, was not available for comment.

In the case of the muscle magazines, the governor vetoed a bill that sought to regulate dietary supplements while he was making a minimum of $1 million a year in outside income as editor of two publications that rely almost entirely on the substances for their advertising income.

The governor canceled his executive editor contract with the magazines last month following a media uproar and accusations of conflict of interest, although he declined to return an estimated $1.5 million he made from the deal.

Fellmeth said Schwarzenegger signing a bill that affected his competitors' video games and resulted in higher sales volume of his own product would be "more troublesome" in terms of a potential conflict than the "pass-through" status of supplement manufacturers paying money to advertise in his muscle magazines.

"If I'm in his shoes, I would ask the attorney general for an opinion as to whether or not he should turn this over to the lieutenant governor," Fellmeth said of the video games legislation.

Even the seemingly benign ratings-and-posting bill Schwarzenegger signed last year could pose a conflict, Fellmeth said, if it results in more people buying the Terminator video.

Yee introduced the two video game bills last year. Assembly Bill 1793, the ratings-and-posting measure, cleared the Legislature and was signed into law by the governor.

Yee's AB 1792, however, never cleared the Assembly Committee on Arts, Entertainment, Sports, Tourism and Internet Media. He resubmitted the measure this year as AB 450, and it made it through the arts committee as well as the Assembly's judiciary panel.

But it stalled on the Assembly floor, and Yee said he deactivated the measure when his personal head count came up short.

During the early skirmishing on his effort last year, Yee said a member of Schwarzenegger's staff asked him whether the measure "would affect the governor's involvement in video games."

Thompson, the governor's spokeswoman, said Schwarzenegger's deputy chief of staff and legislative secretary, Richard Costigan, met with Yee to "connect" the assemblyman to constitutional law experts who might help him craft his legislation in a way that would pass legal muster.

Costigan deferred comment to Thompson, who denied that the governor's aide ever asked whether the Yee legislation would affect the Schwarzenegger video games.

In the mean time, the Entertainment Software Association spent $40,055 through the first six months of this year on lobbying efforts, mostly to derail AB 450, according to the secretary of state's records. Neither the Entertainment Software Association nor its Sacramento lobbyists at Capitol Advocacy LLC would comment on the record.

The secretary of state's records showed the lobbying efforts were directed at the Legislature, the Department of Consumer Affairs and the Governor's Office.

The software group said in a March 11 letter to Yee that his bill is "unnecessary" because the association is working to voluntarily achieve "retail rating enforcement."

The association also said the bill would restrict access to video games "that are neither obscene nor harmful."

The association lists Atari, the manufacturer of "Terminator 3: The Redemption," as one of its 25 member companies.