UMMS CEO Chrencik resigns amid self-dealing scandal

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University of Maryland Medical System CEO Robert A. Chrencik resigned today amid the fallout from the self-dealing scandal that ensnared Mayor Catherine Pugh and several prominent businesspeople on the organization’s board of directors.

Interim President and CEO John W. Ashworth released a statement saying he and the board of directors received and accepted Chrencik’s letter of resignation.

“This action is an important step in moving the Health System forward during this critical time and we remain focused on delivering exceptional, safe, quality health care across Maryland,” he said. “We thank Mr. Chrencik for his leadership, service and commitment during his 35 years of executive employment at UMMS.”

Federal authorities served subpoenas to UMMS on Thursday as part of an investigation into Pugh’s business deals.

Chrencik started a leave of absence on March 25 in the wake of a Baltimore Sun story, prompted by legislation introduced by Sen. Jill P. Carter, revealed that unpaid members of the medical system’s board of directors received six-figure contracts from the healthcare provider. Most famously, since 2011, UMMS paid Pugh $500,000 for 100,000 copies of her “Healthy Holly” books to distribute to local children.

In tax forms, The Sun reported last month, UMMS labeled the two most recent book purchases as “grants,” one to the school system and one to a company formed by Pugh, also named Healthy Holly. Pugh took money from that company and used it for political donations, including a $5,000 gift to her own campaign, the paper found.

Baltimore City Public Schools confirmed receiving three shipments of “Healthy Holly” books, and said 8,700 copies remained in one of their warehouses. Officials could not confirm if thousands of other copies had been received or distributed.

While Pugh has endured the most negative publicity from the scandal, the original investigation found that eight other members on the board had deals with UMMS, primarily involving good and services.

Pugh resigned from her board seat on March 18. A day later, two additional board members resigned and four others were asked to take a voluntary leave of absence. UMMS pledged to bring in an outside accounting or law firm to review the contracts between board members and the organization.

The revelation of the contracts brought many cries for reform from politicians in Annapolis. Gov. Larry Hogan, Senate President Thomas V. “Mike” Miller and the late House Speaker Michael Busch all blasted the conflicts of interest and pledged to investigate UMMS.

Busch, who had a seat on the board, said at the time he was not aware of any of the self-dealing. Miller also has a seat, but he delegated his spot to Sen. Nancy J. King (D-Montgomery County), chair of the Senate’s budget committee.

On April 18, Hogan signed Carter’s bill into law, explicitly forbidding business contracts for board members.

In addition to the UMMS revelations, subsequent reports found that Pugh also had similar arrangements to sell “Healthy Holly” books with Kaiser Permanente–the city’s health insurance provider–and businesspeople who received city contracts.

After holding a press conference to present shipping manifests for the orders and apologize for her conduct, Pugh took an indefinite leave of absence on April 1, citing an ongoing bout with pneumonia. FBI and IRS agents yesterday raided her home, office at City Hall and the office of a nonprofit she ran.

Chrencik became president and CEO of UMMS in 2008. In the years since, he has expanded the medical system’s network to include 13 hospitals, 150 clinics, 4,000 physicians and a total of 28,000 employees, today’s release said.

As the Baltimore Brew detailed in a story last month, much of this growth was made possible after the institution was privatized and turned into a 501(c)(3) corporation. But as Luke Broadwater reported in the original story that broke the scandal, UMMS still receives money from the state, including $50 million to expand the University of Maryland Medical Center here in Baltimore.

This story has been updated.

Brandon Weigel

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