A tabloid publisher that was negotiating a business deal with Arnold Schwarzenegger (search) arranged a $20,000 confidentiality agreement with a woman who said she once had a relationship with the actor, the Los Angeles Times reported Friday.

Malibu resident Gigi Goyette (search) signed the deal on Aug. 8, 2003, with American Media Inc. (search), which publishes the National Enquirer, Star and other celebrity tabloids. That was two days after Schwarzenegger announced his candidacy in the recall election against then-Gov. Gray Davis, according to the Times.

Later that year, American Media reached an agreement with Schwarzenegger that made him editor of two of the company's fitness magazines. Schwarzenegger was to be paid at least $1 million a year for five years under the deal. The governor severed his financial relationship with the company last month after conflict-of-interest concerns arose, although he continues to write columns for the magazines.

The Enquirer in 2001 published a cover story about an alleged seven-year sexual relationship between Goyette and Schwarzenegger during his marriage to Maria Shriver (search). But American Media never sought additional information from her after she signed the confidentiality agreement, Goyette told the newspaper.

The publisher also signed Goyette's friend, Judy Mora, to a similar contract for $1,000, the Times reported.

Goyette, who worked as an extra on Hollywood film and TV productions and acts occasionally in commercials, told the Times she thought the contract would lead to a deal for a book about her life. She said she didn't think American Media would buy the rights to her story but do nothing with it.

"In my mind, it was trying to seal a deal so I wouldn't do the book with anybody else," she told the Times.

American Media referred calls Friday to New York attorney Stuart Zakim, who did not immediately return telephone calls from The Associated Press.

Schwarzenegger spokesman Rob Stutzman told the Times he believed the governor did not know of AMI's deals with the women and denied a link between their confidentiality agreements and the governor's own contract with the media company.

Schwarzenegger is on vacation and unavailable for comment, Stutzman said. On Friday, the governor's staff said it would have no further comment.

The women might have been in a position to embarrass Schwarzenegger during his gubernatorial campaign. In announcing his candidacy on "The Tonight Show," (search) Schwarzenegger predicted he would face allegations of womanizing.

But the candidate believed the tabloids would go easy on him if they were doing business together, Schwarzenegger biographer Laurence Leamer wrote in his recent book, "Fantastic: The Life of Arnold Schwarzenegger." (search)

Indeed, during the election campaign, American Media published a 120-page magazine hailing Schwarzenegger as an embodiment of the "American dream." Before the election, the Enquirer posted on its Web site a story about an alleged Schwarzenegger affair and then ran the story deep inside the magazine three weeks after his victory.

In the interview with the Times, Goyette did not dispute Leamer's claims that she and Schwarzenegger had a sometimes intimate relationship. In the book, she described the contact as "'outercourse' because it's like foreplay."

Goyette's lawyer, Charlotte Hassett, described the contact to the Times as "more of a massage situation — however you want to interpret that."

Goyette said she last communicated with Schwarzenegger in the spring of 2001, before the National Enquirer published its cover story on her alleged affair with him.