Sen. Daniel Wolf, a Cape Cod Democrat and 2014 candidate for governor, says he will not drop out of the gubernatorial race or resign his Senate seat despite a new State Ethics Commission ruling that found Wolf’s ownership stake in Cape Air creates a conflict of interest precluding him from holding either public office.
In the commission’s opinion, short of divesting himself of the stock in the company he founded, he could not serve as Governor and also would have to resign as State Senator.
Wolf, who less than a month ago entered the 2014 race for governor, met with his staff at the offices of Cape Air on Wednesday to discuss last Friday’s ruling, which found that because Cape Air flies in and out of Logan Airport under agreements with Massport, Wolf must either resign and end his gubernatorial campaign, divest all interest in the company, or cease flying through Boston.
Wolf to challenge the ruling, Vote in our Poll
“I disagree with this opinion and will be working to rectify what I believe to be an unfortunate conclusion based on a flawed process. And so I look forward to maintaining my ambitious campaign schedule and having an open, transparent conversation with the voters about this and every issue, continuing a dialog that already is garnering grassroots support across the state,” Wolf said in a statement Wednesday afternoon.
You can let him know how you feel about this issue by voting in our online poll here.
Wolf holds a 23 percent ownership stake in Cape Air, the company he founded 25 years ago, and continues to serve as CEO. He said he sought an opinion from the commission about any potential conflicts “out of an abundance of caution” as he weighed a potential gubernatorial campaign. Wolf said he was led to believe through initial conversations with the commission staff that no conflict would exist, echoing an informal opinion he received prior to his 2010 election to the Senate.
The new ruling states that in order to comply with the state’s conflict of interest law Wolf must either terminate Cape Air contracts with Massport, permanently divest his holding in the airline, or resign his current office and end his campaign for governor.
Ceasing Logan connection would destroy Cape Air
Wolf said ceasing operation through Logan International Airport would “destroy the company,” which also services the Florida Keys, the Caribbean, Micronesia and other small markets throughout the United States and the West Indies.
“This opinion . . . would prevent any successful businessperson who may have even tangential business interaction with the state from entering public life,” Wolf said in his two-page statement.
Ethics Commission spokesman David Giannotti said he was prohibited from discussing the opinion and whether Wolf ever sought or received informal advice from a staff attorney at the commission.
Commission may revisit the problem
Generally speaking, Giannotti said the commission might be willing to revisit a ruling if the requesting party submits additional information or legal analysis to contradict the opinion, or the individual could file a lawsuit in Superior Court to have the ruling overturned.
Cape Air has a two agreements with Massport – an operating agreement and terminal lease - dating to 2002 that renew automatically month-to-month and year-to-year, with the fees set by Massport in accordance with federal regulations and applying to all airlines flying through Logan, according to Wolf. Massport is a quasi-public agency whose board is controlled by gubernatorial appointees.
Massport has taken no action on the automatically renewing contracts since 2002 and 2003, respectively.
Ruling: Cape Air ownership violates the conflict of interest statute
The Ethics Commission ruled that Wolf’s stake in Cape Air violates the conflict of interest statute that prevents a state employee from having a direct or indirect financial interest in a state contract, unless there is an applicable exemption.
The commission said the only possible exemption available to Wolf would be a scenario under which his financial interest in the contract is less than 10 percent, and if it is competitively bid. Neither apply to Wolf’s position with Cape Air.
“Under the law, unless Cape Air’s contracts with Massport are terminated, the legislator must choose between his public office and retaining his financial interest in Cape Air,” the unsigned ruling from the Ethics Commission states. The ruling says Wolf has 30 days to comply, but the commission indicated it would be willing to consider a “reasonable time extension” for compliance, if requested.
Since first being elected to office in 2010, Wolf has routinely disclosed his holdings and relationship to Cape Air in required filings with the Ethics Commission and it has never become an issue.
“I got into this race for Governor believing that we can make a real difference in the lives of working families that have been left behind in this economy. I still believe that. I look forward to sharing that message across the Commonwealth,” Wolf said.
Consultant broke the story, Wolf unresponsive
Speculation that Wolf was preparing to drop out of the race for governor began to build Wednesday morning after Boston political consultant Mary Anne Marsh, of the Dewey Square Group, Tweeted: “@DanWolfMA out of #magov.” She later responded to a question on Twitter for clarifying information with, “He isn’t going to run…”
Hours went by before anyone from Wolf’s campaign would respond to the matter, but a source told the News Service that the senator had summoned his staff Tuesday night for a meeting at Cape Air headquarters on Wednesday.
Below is a copy of the statement from Senator Dan Wolf's office regarding his decision to continue a run for the governor's office.
BOSTON – August 7, 2013 – Twenty-five years ago, as a young mechanic and pilot, a handful of people joined me to start an airline. With one plane, six employees, and one route, we created Cape Air. Today Cape Air is an employee-owned company with more than 1000 people, still headquartered in Massachusetts, serving communities around the world. I brought that entrepreneurial spirit and a commitment to doing the right thing to the State Senate and my recently announced candidacy for Governor.
As I was contemplating running for Governor this spring my office contacted the State Ethics Commission - out of an abundance of caution - to get their opinion on whether there would be any plausible conflicts between my ownership stake in Cape Air (approximately 20% of the company) and serving as Governor. An initial conversation with State Ethics Commission staff led me to believe that no such conflict would exist, reiterating an informal opinion regarding the State Senate before I was first elected in 2010. In addition, my filings to the Ethics Commission in the years since have clearly stated my holdings and relationship to Cape Air, which never have been flagged as an area of concern.
Unfortunately, I was informed by the Commission on Friday afternoon, August 2, that in their opinion the fact that Cape Air flies in and out of Logan, with agreements with Massport to do so, creates a conflict that can only be fixed either by Cape Air no longer serving Logan Airport – which would destroy the company -- or by me completely divesting all interest in a company I spent 25 years building from the ground up. In the Commission’s opinion, short of taking one of these drastic steps, I could not serve as Governor and also would have to resign as State Senator.
The two Cape Air agreements with Massport in question date back to 2002. They automatically renew month-to-month and year-to-year respectively. The fees paid by Cape Air are not negotiated but are set by Massport in accordance with Federal regulations and apply to all airlines flying in and out of Logan. Neither Cape Air nor Massport have taken any affirmative action on these agreements since 2002.
Let me be clear: Massport took no affirmative action on these contracts while I was a State Senator and Cape Air took no action on these contracts while I was State Senator. There is no discretion to do so, based on federal standards and requirements.
Regardless of these facts, the Commission now holds that Cape Air’s involvement with Logan Airport through Massport precludes my continuing to serve as Senator and would prevent my serving as Governor.
This opinion would prevent any successful businessperson who may have even tangential business interaction with the state from entering public life.
I disagree with this opinion and will be working to rectify what I believe to be an unfortunate conclusion based on a flawed process. And so I look forward to maintaining my ambitious campaign schedule and having an open, transparent conversation with the voters about this and every issue, continuing a dialogue that already is garnering grassroots support across the state.
I got into this race for Governor believing that we can make a real difference in the lives of working families that have been left behind in this economy. I still believe that. I look forward to sharing that message across the Commonwealth.