The State Ethics Commission is disputing state Sen. Dan Wolf's claim that they led him to believe his ownership stake in Cape Air wasn't a conflict of interest.
The agency said they warned an aide to the Cape Cod lawmaker and gubernatorial candidate as early as November 2010 to check whether Wolf had any contracts with the state since lawmakers can't have "direct or indirect interests in state contracts."
Wolf owns a 23 percent interest in Cape Air. The airline has contracts with Massport, which runs Logan Airport.
In a ruling Wolf received last week, the commission questioned his eligibility as a candidate and lawmaker, citing his ownership stake in Cape Air. The opinion found that the airline's agreements to fly in and out of Logan amount to a conflict of interest and that Wolf would have to address the conflict or abandon his run for governor and resign from the Legislature.
The agency said commission lawyers warned Wolf again in April that Cape Air's contracts were prohibited under ethics laws.
"Senator Wolf was never led to believe that no conflict existed; in fact, he was advised that he likely had a substantial problem under the conflict law, and that he would be given specific advice after he provided the Massport contracts," the commission said in a statement Thursday.
The commission said Wolf announced his run for governor before receiving that advice.
Commission Executive Director Karen Nober said there are exemptions for legislators, but they are narrow. The contract must be competitively bid and the legislator's ownership interest must be less than 10 percent.
The Cape Air contracts aren't competitively bid.
The commission said Wolf has three options: End the Cape Air contracts with Massport; divest his holdings in Cape Air; or resign as senator and end his campaign for governor.
"While we understand that this situation creates difficult choices for Senator Wolf, there is no basis for the commission to give him special or different treatment," Nober said.
Wolf's offered a different version of his dealings with the commission.
Wolf said his initial conversation with commission staff as he mulled a run for governor led him to believe that no conflict existed. He said that echoed an informal opinion he received before he was elected in 2010.
Wolf says he's continuing his run for governor.
"I disagree with this opinion and will be working to rectify what I believe to be an unfortunate conclusion based on a flawed process," Wolf said Wednesday.
Wolf said the contracts with Massport aren't subject to negotiations.
Those include a month-to-month lease that continues until terminated by either Cape Air or Massport, which runs Logan, and a year-to-year operating agreement dating back to 2002 that rolls over automatically and requires Cape Air to pay specified fees to Massport.
Massport issued a statement Thursday saying Wolf's descriptions of the contracts are accurate.
"The rates for Massport lease agreements are set by Massport; they are not negotiated with airlines. The rate is the same for each airline operating in a given terminal," the agency said. "All airlines sign the same operating agreement."
The agency said they are federally obligated to accommodate all certificated air carriers that seek to operate at Logan.
This program aired on August 8, 2013. The audio for this program is not available.