State Senator Dan Wolf to quit legislature, governor’s race

File photo by Steve Myrick

Claiming other options presented by the Ethics Commission would damage his airline and the travelers it served, Sen. Dan Wolf announced Thursday he would suspend his gubernatorial campaign and resign his seat.

Mr. Wolf’s ownership stake in Cape Air, which leases space at Logan International Airport, creates an ethical conflict that could only be solved by him giving up his stake, moving the airline out of Logan, or withdrawing from office and ending his 2014 campaign, the commission decided this summer.

A Harwich Democrat and a founder of Cape Air, Mr. Wolf said if the commission’s ultimatum is not lifted, he will step down from the state senate next Thursday.

“Until this matter is resolved, I am suspending my efforts to become the next governor of Massachusetts, believing that unless this ruling is changed I cannot conduct a campaign for real economic and social justice, defining a bright future for the Commonwealth that includes affordable public education, a rebuilt infrastructure, and healthy partnerships between the public and private sectors,” Mr. Wolf said in a lengthy statement. He rejected the option of suing to overturn the ruling, saying a long legal battle is “anathema,” and added that he would resign “under duress.”

Mr. Wolf has criticized the ruling, arguing that neither Cape Air nor the Massachusetts Port Authority has the ability to negotiate or influence the his company’s agreement for the use of Logan, which has fixed fees and has been in place for 25 years, since Cape Air started flights to Provincetown. The Federal Aviation Authority requires facilities such as Logan to provide space to certified airlines.

In an August 2 ruling, the commission said Mr. Wolf cannot hold his public office while owning a 23 percent stake in a company that has a contract, which was not competitively bid, with a state agency. Breaking its past precedent of declining to even confirm whether a ruling had been sought, the Ethics Commission publicly refuted Mr. Wolf’s assertion that it had previously advised Mr. Wolf that his Cape Air business did not create a conflict.

“The Ethics Commission has been aware since at least May, 2010 of my ownership interest in Cape Air. Not until August 2, 2013, three weeks after I announced my campaign for governor, did they rule that Cape Air’s use of Logan puts me in violation of ethics law. Their decision was made by the full commission without conversation or consultation with me leading up to the vote, no preliminary opinion and no opportunity for input,” Mr. Wolf said in his Thursday morning statement. “It was, as their own spokesperson put it, ‘written in the rush of things.’ Nothing in their ruling in any way implies that I have acted or voted improperly as a State Senator, only that Cape Air’s use of Logan violates the letter of the law.”

Mr. Wolf said severing the airline’s ties to MassPort would “destroy a Massachusetts company, lead to the loss of 1,000 jobs, and end air service to 11 communities that rely on Cape Air as their sole year-round carrier.”

In his letter, Mr. Wolf presented two options for divesting from the partially employee-owned company, both of which he rejected, saying they would either heap debt on the employees’ ownership plan or leave the company vulnerable to a hostile takeover.

“Divesting all of my holdings in Cape Air, and ending all associations with the company I founded 25 years ago, also would fundamentally undermine the company. Selling my shares to the company’s employees through the employee stock ownership plan created in 1996 would saddle them with serious debt as I walk out the door, and create significant cash flow challenges going forward. Selling my shares to a private owner would end employee control of the company’s future, removing protection from a forced merger or acquisition,” Mr. Wolf said. “That also is not an option I can in good conscience pursue.”

Mr. Wolf’s resignation would trigger a special election for the district that includes the outer Cape, east of Sandwich, as well as Martha’s Vineyard and Nantucket. With his intentions to seek the governorship well known, Mr. Wolf’s seat was already in play in 2014 before his planned Aug. 29 departure from the Senate. Rep. Sarah Peake, a Provincetown Democrat, had reportedly planned to run for the seat.

Mr. Wolf, a newcomer first elected in November 2010, represents the Cape and islands.