In its hardest-hitting personal attack yet, the campaign of Pennsylvania Gov. Tom Corbett has a new TV ad saying Democrat Tom Wolf seems “dishonest” and accusing him of ripping off state taxpayers.
The ad (above) says Wolf is a multimillionaire who “got rich off the backs of middle-class taxpayers.”
“Shortly after Wolf made huge contributions to state politicians, millions from the state pension fund were funnelled into Wolf’s company,” an announcer says. “After Wolf pocketed the money, he laid off his workers.”
It’s a sinister and highly selective account of the sale and subsequent difficulties of Wolf’s family business, which designed and made kitchen cabinets. The ad essentially says Wolf bought influence with political contributions, then used it to raid state pension funds for personal gain and laid off his workers.
Let’s look at the facts
There’s no doubt Wolf was a significant contributor to Democrats, including Gov. Ed Rendell. The account of the sale of Wolf’s business in the ad is based on an April story by Joseph DiStefano of the Philadelphia Inquirer, and it presents a different and far simpler picture than the story did.
It’s true that a fund that got investments from the state pension system participated in a buyout of Wolf’s company in 2006, and, according to DiStefano’s story, the pension fund was the largest single investor in the Weston Presidio V fund.
What the ad doesn’t say is that the pension system starting investing in the Presidio funds when Republican Tom Ridge was governor. The Inquirer story notes that an investment banking firm hired by Wolf’s company brought the Presidio V fund into the deal, and there’s no evidence presented that the decision was politically influenced. Wolf told DiStefano he didn’t know the pension system was the largest single investor in Presidio V until he was asked about it by the Inquirer.
It’s true Wolf took a $20 million payout when the company was sold, but it’s a stretch to say that he then “laid off his workers.”
The point of the sale was for Wolf and two cousins to get out of the company. After that, it was run by a different management team, though Wolf retained a minority stake. More importantly, the company closed its lumber yards and laid off employees when the housing market and the national economy tanked.
Any businesses based on home construction in that era was going to be in trouble, and they were. It’s also true that the debt the company took on to buy Wolf and his cousins out made it harder to weather the financial storm.
The ad also doesn’t note, of course, that in 2009 Wolf abandoned his plans to run for governor the following year and returned to resuscitate the business, even though he was under no legal obligation to do so.
The ad also says that “to this day, hardworking Pennsylvania taxpayers have never been repaid” for the pension funds invested in the Wolf company.
It’s true that the pension fund hasn’t been repaid all of its investment in the Wolf deal. According to the Inquirer story, the value of the Presidio V’s investment in the company today is about half its original value.
But that’s true of countless investments, especially in a time of economic hardship, and it doesn’t necessarily mean that someone ripped off the fund. Every investment carries risk.