Gov. Larry Hogan on Monday asked State Prosecutor Emmet C. Davitt to investigate Mayor Catherine Pugh’s six-figure book deal with the University of Maryland Medical System.
In the letter to Davitt, Hogan said Marylanders expect institutions that receive state funding to act with “the highest legal and ethical standards,” but only Pugh, who was one of nine board members found to have lucrative deals with UMMS, was singled out by name.
The mayor reportedly received $500,000 from the medical organization to print 100,000 copies of children’s books promoting healthy living with the fictional character Healthy Holly. She’d served on the board as an unpaid member since 2001, and was paid for orders in 2011, 2013, 2015, 2017 and 2018.
“These are deeply disturbing allegations,” Hogan wrote. “I am particularly concerned about the UMMS sale because it has significant continuing ties with the State and receives very substantial public funding.”
Hogan wrote that the investigation would prevent future misconduct and possibly return money to state coffers.
“My goal is to assure that these types of problems do not ever reoccur, that appropriate personnel actions are taken, and that any improperly spent funds are recovered,” he wrote.
The investigation comes as a new report in The Sun revealed that Pugh had deals for “Healthy Holly” books with other medical companies. Health provider Kaiser Permanente paid $114,000 for 20,000 copies–as it was seeking a contract to provide insurance to city employees–and CareFirst BlueCross BlueShield paid $14,500 for 2,000 books in 2011 and 2014, the paper reported.
In light of those findings, Comptroller Peter Franchot, who sits on the state Board of Public Works with Hogan, called on Pugh to resign.
The Mayor has to resign – now. The people of Baltimore are facing too many serious challenges, as it is, to also to deal with such brazen, cartoonish corruption from their chief executive. https://t.co/00VBd5FbyB
— Comptroller Peter Franchot (@peterfranchot) April 1, 2019
Late Monday afternoon, Pugh confirmed she will be taking a leave of absence amid a battle with pneumonia.
First District City Councilman Zeke Cohen also cited the payment from Kaiser in calling for Pugh’s resignation.
“I wish Mayor Pugh a speedy recovery as she takes a leave of absence due to her illness,” he wrote in a lengthy statement. “However, I believe she should fully resign from office. Mayor Pugh has lost the moral mandate to govern and the public’s trust. Baltimore deserves better.”
In a letter, Councilwoman Shannon Sneed (13th District) wrote she agreed with Hogan opening an investigation and called for the Office of the Inspector General to do the same.
My statement on Mayor Catherine Pugh taking a leave of absence. pic.twitter.com/5GrsqitIjq
— Shannon Sneed (@ShannonSneed4MD) April 1, 2019
Kaiser Permanente said in a statement it has provided coverage to city workers since 1986 and the decision to buy “Healthy Holly” books has “no connection” with their insurance services.
The “self-dealing” on the UMMS board came to light after Sen. Jill P. Carter introduced a bill to prohibit such arrangements and a series of Sun articles exposed the contracts worth hundreds of thousands of dollars, with many being for goods and services like civil engineering and pest control.
Using money from the company she established to publish the books, Healthy Holly, LLC, Pugh made political donations, including a $5,000 to her own campaign in 2015, the paper reported.
Pugh stepped down from the board, as did two other members, and said she returned $100,000 that was paid for a fifth book in the series. Four other members took a leave of absence.
On March 21, the board asked president and CEO Robert A. Chrencik to take a leave of absence.
Hogan, Senate President Thomas V. “Mike” Miller and House Speaker Michael Busch have been highly critical of the board’s conduct and called for investigations. Both Miller and Busch have seats on the board, though Miller has designated his to Sen. Nancy King (D-Montgomery County). Busch said he was not aware of any misconduct.
In a press conference last week, Pugh presented shipping documents that she said showed 60,000 copies of “Healthy Holly” books were sent to Baltimore City Public Schools over three orders, with a fourth still underway. The Sun, in an earlier report, found that 9,000 copies were still sitting in a warehouse run by the school system.
“It certainly seemed like an ideal way to combine focus and forces to bring a positive influence to those who need it the most,” Pugh said last week.
Appearing choked up at times, she also apologized for the book deal.
“I am deeply sorry for any lack of confidence or disappointment which this initiative may have caused among Baltimore City residents, friends and colleagues,” she said. “In hindsight, this arrangement with the University of Maryland Medical System was a regrettable mistake.”
This story has been updated.