Steve Grossman Is No Dan Wolf

As Dan Wolf prepares to step down, we explore the difference between a state employee and a state legislator.

Democrat Dan Wolf’s spectacular crash-and-burn taught us at least one thing: Don’t be a state lawmaker, own your own business, and have a no-bid contract with the state. That’s wrong.

But it’s OK to be a state employee, own up to 70 percent of a family business, and have contracts with the state. Just look at state treasurer Steve Grossman, who’s also running for governor.

State ethics filings show Grossman has owned between 50 percent and 70 percent Grossman Marketing Group since becoming treasurer in 2011. It’s a family business he built but now entrusts to his sons, Ben and David.

Grossman informed ethics officials at least four times of possible conflicts:

• As of August, Grossman Marketing Group, through its contracts with the University of Massachusetts, has earned nearly $9,000 in revenue from the public university system since Grossman took office.

• As the state’s moneyman, Grossman notified ethics officials in August that his office green-lighted $200 million in construction bonds that would benefit UMass. He contends he has not influence over them and improving the school’s infrastructure would not affect his business.

• He also revealed in May he may face a $500,000 tax payment in a complicated insurance policy swap. Grossman didn’t say how he learned of the potential tax bill, but did say there could be a lawsuit. Grossman disclosed that two of the possible targets of his lawsuit are companies the Treasury signed to contracts to help identify Massachusetts residents with unclaimed assets.

The difference is the ethics law views Grossman and Wolf differently. Wolf, who as legislator writes laws, is barred in Section C from having financial interests in companies with state, no-bid contracts. The idea is that he can’t write laws that his companies can make money off of. Wolf insists that’s never been the case and that the feds set the Massport landing fees.

State employees—including the treasurer—are covered under Section B, which allows people who don’t write laws to enter into a competitively bid contracts but they must disclose the financial relationship. Grossman has done that.

The Ethics Commission told Wolf he had to resign his seat, divest his ownership (handing it irrevocably to a family member was an option), or get out of his contracts with Massport. Wolf, in an August 21 Facebook post, said he decided to quit the Senate rather than destroy his business.

The conflict law doesn’t just cover money. If he were governor, Wolf would pick the Massport board that runs Logan Airport, where Cape Air runs. Business ethicists say Wolf must say how he’d deal with conflicts that would arise if, say, a Cape Air jet crashed and state officials joined in an investigation or feuded with a state board.

Since the ethics ruling became public, there has been growing sentiment the ethics law should be changed. Lou Rizzoli, a longtime lawyer to the House of Representatives who has taught law at Suffolk University, said the law is a relic of the 1960s and needs updating.

“Dan Wolf has distinguished himself in the state Senate because of his business background, and we need people from different backgrounds,” said Rizzoli, now with law firm of Smith Ruddock & Hayes.“This is a shame.”