The Ethics Commission Is Crying Dan Wolf

Photo via AP

The CommonWealth headline today is a little misleading. State senator Dan Wolf is not “resigned to quitting” his campaign for Governor of Massachusetts.

“I am 100 percent in the race right now,” Wolf tells me. But, it ain’t looking good for him.

This has been one of the weirder political developments of recent times here in Massachusetts—not quite up there with one gubernatorial candidate’s running mate endorsing another gubernatorial candidate, but still pretty weird.

On August 2, the state Ethics Commission issued a ruling that Wolf cannot be governor, and indeed cannot be state senator, while retaining significant ownership in his company, Cape Air. The reasoning seems flagrantly unfair to pretty much everybody I’ve talked to about it, friend or foe of Wolf alike: the commission argues that Cape Air has a contract with the state, namely MassPort, to use Logan Airport. But that contract is standard for all airlines—there is no bidding or negotiation, so no apparent way that the process can be subverted or undermined by Wolf in any public office he might hold.

But fair doesn’t necessarily matter, and there are some who argue that the commissioners are correct on the letter of the law as silly as that might seem. Others disagree. But those kinds of disagreements and differences in interpretation are precisely why we have an ethics commission to make these kinds of rulings. And they have.

Not that this has quieted the conspiracy theories, of which there are several making the rounds. There are five commissioners. One was appointed by Attorney General Martha Coakley, who happens to be seriously considering running for governor herself. Another was appointed by Secretary of the Commonwealth Bill Galvin, who happens to be seriously considering running for Attorney General if Coakley runs for governor. So, if you believe that those two are pulling the strings to sabotage Wolf to clear the way for Coakley, then you just have to figure out some way that one of Governor Deval Patrick’s three appointees could have been compromised. Don’t worry, there are theories. (Suffice to say, there are some people who believe that Galvin is an omnipotent manipulator behind all things in the Commonwealth.)

The conspiracy theories seem a little weak to me. On the other hand, I haven’t exactly heard Coakley or other Democratic gubernatorial hopefuls expressing any sympathy for Wolf’s unfortunate position.

Anyway, conspiracy or not, Wolf is asking the Commission to reconsider the ruling. (There is no appeal process.) He has to hope that the commissioners didn’t fully understand the nature of the MassPort contracts when they originally made their ruling—which is possible since, according to Wolf, they never contacted him for any discussion about it after he voluntarily provided those contracts to them back in the spring.

But it seems awfully unlikely to me.

Meanwhile, it seems very unlikely that the Commission will feel compelled to act swiftly, which means not before their September meeting, which comes after the 30-day window for Wolf to comply—which means Wolf will have to either comply or resign his senate seat at the start of the month.

Wolf does seem resigned to that outcome, although he wouldn’t quite say so to me. (Which, by the way, means yet another special election for the Commonwealth.)

Wolf sounds unwilling to comply to the Commission’s terms—certainly not in the next couple of weeks. There is no feasible “blind trust” option —it’s not blind if everybody knows what’s in it. And selling off his substantial shares in a rush would have significant consequences for the largely employee-owned company.

He could resign as state senator but continue campaigning for governor, or perhaps temporarily suspend the campaign while awaiting a new ruling. And in fact, even if the Commission sticks to its guns, Wolf could keep going in hopes of a legislative fix to clarify the law. But that’s a tough rhetorical slog, campaigning for governor while your fellow legislators change the ethics law to allow you to legally hold office.

Wolf would not say what he would do if the Commission rejects his call for reconsideration. “Everything is on the table at that point,” he says.

I suppose Wolf might perhaps set something in motion that transfers shares over time, maybe with some going to the ESOP and some to an outside investor, in a way that doesn’t cause balance-sheet harm to the company, doesn’t take majority ownership out of employees’ hands, and gets him divested by the time he would take office in January 2015. But that probably would have been a lot easier beginning a year or two ago. And frankly, I suspect that Wolf is more than a little emotionally attached to Cape Air, and is a long way from willing to cut the cord with his baby.

So, as I read all the tea leaves, I think Dan Wolf will soon be out of the state senate, and not much later out of the race for governor—all over something that just about nobody thinks should actually bar him from serving. Welcome to Massachusetts.