The most consequential Pennsylvania political story of the day was Joseph N. DiStefeno's report in the Philadelphia Inquirer today, on the recent history of Tom Wolf’s family business.
In his abundant television ads, Wolf has showcased the firm, the Wolf Organization, as a model of enlightened business success. The bedrock of the Wolf campaign is his turnaround story of how he rescued a firm that he had sold in 2006 after it foundered in the the wake of the 2008 financial crisis.
DiStefano dives deeper into the story to find that Wolf and two cousins, co-owners of the firm, sold much of their interests in a complex 2006 transaction. Managers of the organization acquired part of their stake through a deal funded by an investment banking firm and bank loans.
The investment firm, Weston Presidio paid $41 million. It’s stake in the recession battered firm is now worth $21 million. And one of the major investors in Presidio, it turns out, is the Pennsylvania’s State Employees Retirement System.
Wolf also told DiStefano that a substantial part of the $10 million he has invested in his campaign came from a bank loan, rather than his own cash.
“I really cobbled together everything I had,’’ he told the Inquirer.
The Republican Party wasted no time in throwing a harsh spotlight on the details of the Inquirer report.
“In the midst of a growing pension crisis, our state employees have learned that investing in Tom Wolf has cost them critical retirement funds,’’ the GOP said in a press release. “In addition, Tom Wolf’s is running his campaign on a philosophy of ‘spend first, pay later.’ ‘’
Wolf notes in the Inquirer story that while the the investment firm, Weston Presidio, still faces a significant loss from the 2006 deal, the restructuring he engineered upon his return to the firm restored it to solvency. Still, there’s plenty of fodder for negative commercials in the complex story. One immediate question is which of his Democratic competitors will succomb to the temptation shoot first at the frontrunner after one more poll showed a big lead for the York businessman.
Here's the Wolf campaign's response to the GOP attack:
"In 2006, Tom Wolf sold his business and retired. The sale was open and transparent and thoroughly reported in the local newspapers. In 2007, Gov. Rendell appointed Tom Revenue Secretary and Tom put all of his assets in a blind trust.