SACRAMENTO – Gov. Arnold Schwarzenegger’s re-election campaign on Friday released his tax returns for the previous three years, allowing reporters to peruse them for six hours.

Q: What do the govenor’s returns show?

A:Schwarzenegger made a lot more money working in Hollywood than he does as governor. But he’s far from broke, reporting an overall income of nearly $17 million in 2004. His earnings are largely from investments in stocks, real estate and residual income from his movies, including DVDs and video games.

With more than half of his income resulting from capital gains, his tax bill dropped in recent years. He paid 16 percent of his income toward federal taxes in 2004 compared with 27 percent in 2002, when he made the movie, “Terminator 3.”

Q: What’s less clear from the tax returns?

A:Details about the benefit Schwarzenegger derived from two of his more controversial ventures: His leasing of a jumbo jet to Singapore Airlines since 1997 and earnings from a consulting contract with two fitness magazines that derive much of their profits from perfomance-enhancing supplements. Critics charge the former was a thinly veiled attempt to avoid paying taxes, and say the latter created a conflict of interest because of proposed legislation banning supplements, a measure the governor initially vetoed before signing it into law last fall. Schwarzenegger’s team has denied both claims.

As to the Singapore Airlines lease, “we did it because our hope was that…the value of the plane at the end of the lease would be more than the debt and in the meantime, we get rent,” his longtime investment adviser, Paul Wachter, said Friday.

Schwarzenegger ultimately withdrew from the $1 million per year fitness magazine arrangement that required him to “further the business objectives’” of the magazine company. He continues to write an advice column for the publisher.

Q: Do tax returns show what is the governor worth?

A:No, and Wachter refused to say Friday.

But Schwarzenegger, who is not accepting his governor’s salary of $175,000 per year, had an estimated net worth of close to $100 million before the creation of a blind trust to manage his investments following his election in 2003. Many of his holdings were in blue chip stocks, real esate projects and investment partnerships, according to his earlier returns.

Q: What is a blind trust?

A:An arrangement in which a bank, money management firm or other third party has complete control over investments. The owner has no vote and no knowledge of the transactions, although Schwarzenegger’s aware of investments he made before the funds were put into the blind trust. But he doesn’t manage that money now.

Q: Why set up a blind trust?

A:U.S. presidents must keep their holdings in a blind trust, but California governors have no such legal requirement. Many past governors, including Gray Davis and Jerry Brown, haven’t set up blind trusts. But for officeholders with vast wealth, it helps them avoid potential conflicts of interest between their elected post and financial dealings, even though it means taxpayers can’t see how they make their money.

One of Schwarzenegger’s Democratic rivals, Controller Steve Westly, has a blind trust and the other, Treasurer Phil Angelides has said he will set one up if elected.

Q: What sort of charities does Schwarzenegger give to?

A:His 2004 returns showed he gave $55,985 worth of Starbucks stocks to his children’s school, Brentwood School in Los Angeles. He also gave $404,087 in cash to charities, but his advisers declined to provide details. Wachter said that Schwarzenegger has given to his after-school programs, his church and to St. John’s Health Center in Santa Monica, where a nursery is named after his wife, First Lady Maria Shriver.

Q: How did the Democratic challengers respond Friday?

A:Angelides, who released seven years of returns March 9, declined to comment. But Westly’s campaign charged Schwarzenegger’s actions fell short. “This doesn’t cut it,” said Nick Velasquez, campaign spokesman for Westly who released 10 years worth of returns 212 days ago. “Californians deserve to know what is in their governors’ and gubernatorial candidates’ tax returns.”

Schwarzenegger’s campaign rejected that assertion. “The governor has released all of his tax returns from the time he became a candidate through each year he has served as an elected official,” said his campaign press secretary, Julie Soderlund.

To date, Schwarzenegger has released five annual tax returns, 2000 through 2004.