Tim Michels promises to divest himself from family construction business if he wins race for governor

MADISON – Tim Michels announced Thursday he would divest himself from his family's construction business if he wins the governorship, making the pledge hours after ethical questions were raised about the company continuing to seek government contracts under a Michels administration.

Michels joined the Republican primary for governor last week and said days later he was stepping down from his management role with Brownsville-based Michels Corp. The firm has received more than $660 million from the state for construction projects over the last five years.

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Michels this week said he hoped the company would continue to compete for state work if he won the race for governor. He downplayed the role he would play in picking contractors even though governors under state law must sign road construction contracts worth $1,000 or more.

The situation would create ethical issues for Michels because state law bars public officials from taking actions that would benefit themselves financially, the Milwaukee Journal Sentinel reported Thursday morning.

Eight hours later, Michels announced he would shed his ownership stake in the company if he wins in November.

"As governor, I will divest myself from the company as well, to focus on making lives better for every person who calls Wisconsin home," Michels wrote on Twitter.

Michels faces former Lt. Gov. Rebecca Kleefisch, management consultant Kevin Nicholson and state Rep. Tim Ramthun of Campbellsport in the Republican primary.

The winner of the Aug. 9 primary will face Democratic Gov. Tony Evers in the Nov. 8 general election.

Michels' parents founded the company with business partners in 1959. Michels and his brothers Pat and Kevin have led Michels Corp. since their father, Dale, died in 1998.

Tim Michels has described Michels Corp., which employs 8,000 workers, as the largest contractor in the state. It had projected revenue of nearly $3 billion in 2018, according to BizTimes Milwaukee.

Michels did not provide details on how his divestment from the family business would work. He did not say if he would sell his share of the business to his brothers or someone else and did not say whether he would have a chance to buy back his ownership stake in the future.

The state's ethics law bars governors from taking official acts that benefit themselves, their spouses or family members they help support financially.

The ban does not apply to helping siblings financially, but Michels could still face public perception issues if state work went to his brothers' firm while he served as governor.

On Monday — before he said he would sell his share of the family business — Michels noted in an interview with WTMJ-AM that roadbuilding work for the state Department of Transportation goes to the lowest qualified bidder.

“The governor has no say in who gets DOT contracts,” Michels said. “And I’m stepping aside from the business today anyhow. I’m going to focus on leading Wisconsin and doing the right thing for all the people of Wisconsin.”

Asked whether the company would seek state work if he became governor, Michels said: “I certainly hope so. It won’t be my decision. It will be my brothers’ decision but again we bring value — we bring value to the taxpayers of Wisconsin.”

While state officials have little discretion in awarding construction contracts because they go to the lowest qualified bidder, governors can prevent or delay roadwork by putting off signing contracts.

Governors also have a large say in how much the state spends on roadwork every year in budgets they write in conjunction with lawmakers. The more spent on roads, the more opportunities for all contractors to win state work.

The state is spending more than $2.2 billion on road and bridge projects this year. Those jobs are being funded with a mix of state and federal money, with the state money largely coming from gas taxes and vehicle registration fees.

Before he announced his plans to divest himself from the company, Michels appeared to face challenges in navigating the state ethics code, according to Mac Davis, a former state senator and former judge who previously served on the Wisconsin Ethics Commission.

Davis, who commented before Michels said he would leave the family business, said it would be difficult for Michels to hand off his duties to sign road construction contracts to someone else.

"What are the governor's official duties? And I don't think he can delegate them," Davis said. "He can't say, 'Well, I just, on Michels' road contracts, I'll leave that to the lieutenant governor.' I doubt that works at all because he's made the decision to delegate it, so he's still in charge, so to speak."

A Republican, Davis said he is not backing anyone yet in the primary.

Former Republican Gov. Scott McCallum said before Michels announced his divestment plans that he thought he could find a way to avoid conflicts. McCallum has endorsed Kleefisch but said the public should welcome candidates like Michels to the field.

"The last thing you want are just people that have been brought up in government who have done nothing in their life — so I see that as a positive, somebody who's had real work experience," he said.

Contact Patrick Marley at patrick.marley@jrn.com. Follow him on Twitter at @patrickdmarley.

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This article originally appeared on Milwaukee Journal Sentinel: Michels promises to divest from family business if elected governor