Recent revelations that Mayor Catherine Pugh was paid nearly $800,000 for her self-published “Healthy Holly” children’s books — including by a health system she helped oversee and a large health provider that does business with the city — have raised many serious questions.
Among them: Where did all the money go?
The task of accounting for the money has been complicated by the fact that Pugh won’t provide documentation of her expenses associated with producing the books. She hasn’t shared financial records of her company, Healthy Holly LLC, or her own tax filings, although she has said she and her company have properly reported all income to the IRS.
What is clear is that financial figures for expenses provided by Pugh and others dug up by The Sun through public records and other reporting don’t fully account for where the money went.
The University of Maryland Medical System deal
Pugh received $500,000 to print 100,000 copies of her books — which were supposed to be distributed to city schoolchildren — from the University of Maryland Medical System during a time when she was a state senator and then mayor. She also sat on the hospital network’s board of directors.
She has returned to UMMS $100,000 intended for a fifth book that has not been completed.
That leaves $400,000 paid to her company by UMMS for which to account.
The mayor said her net profit after illustration, printing and shipping costs was about $20,000 per each of the four remaining books sold — in total, $80,000.
That leaves $320,000 for production of the four books.
In 2011, Kromar Printing Ltd. in Winnipeg, Canada, billed Pugh for $13,480 for both printing and shipping the first book. Two years later, the company billed her $14,325 for printing the second title. The 2015 bill for the third title was the largest, at $15,275.
Altogether, it cost Pugh roughly $43,000 to print about 60,000 books and have them shipped to Baltimore. If a similar amount is spent on the fourth printing she has promised, total printing and shipping costs would be about $60,000.
That leaves $260,000 remaining in the production budget.
Pugh also said she paid the team working for her illustrator, and paid her book designer, who is a city employee and an executive assistant for Pugh’s former chief of staff.
But Pugh won’t say how much she paid either of them, and they aren’t saying, either.
Andre Forde, Pugh’s illustrator, has said he wasn’t paid personally, but members of his team were paid an undisclosed amount for “integrating the words and some coloring.”
Carmellita Green — Pugh’s book designer — confirmed she was paid by Pugh, but also would not disclose how much.
“I was hired to do a job, and I did the job. I don’t understand all the controversy around it,” said Green, who is executive assistant to Kimberly Morton, Pugh’s former chief of staff who is now deputy director of the Department of Public Works.
Sarah Baker is the associate executive director of the Society of Children’s Book Writers and Illustrators, a nonprofit with about 24,000 members worldwide. She previously designed children’s books at Penguin Young Readers Group.
Baker said it can be extremely difficult to estimate the costs of self-published books, because costs to authors vary widely. But she said $15,000 would be a generous estimate for how much Pugh’s illustrations and design and layout work might have cost, combined, for each book.
If Pugh spent about $15,000 for illustrations and layout, per each of the four books, that would be another $60,000 in expenditures.
Pugh has not identified any other costs that she incurred.
That would leave $200,000 — half the UMMS investment — unaccounted for.
Pugh’s attorney did not respond to a request for financial documents.
The Kaiser Permanente payment
Health provider Kaiser Permanente paid Pugh $114,000 to buy about 20,000 copies of her “Healthy Holly” children’s books during a period when the company was seeking a lucrative contract to provide health benefits to city employees, The Sun reported Monday.
Kaiser said it has “purchased and distributed Healthy Holly, among other books, to families and children throughout Maryland, Virginia and the District of Columbia,” but has not answered additional questions about its arrangement with Pugh.
Pugh has publicly acknowledged sales of her book only to UMMS.
The Associated Black Charities payment
The prominent Baltimore foundation acknowledged late Monday it paid Pugh nearly $80,000 for 10,000 copies of the Healthy Holly books. The organization received 4,500 and distributed 4,100 of those books to children — the rest were water-damaged and not replaced. Healthy Holly LLC was supposed to distribute the remaining 5,500 books paid for by donors.
Between 2011 and 2016, five organizations donated $87,180 to Associated Black Charities to pay for the books. ABC initially kept $9,552 to use for “general support,” according to a statement, but this week decided to return it.
The five groups that gave funding through ABC were CareFirst BlueCross BlueShield, which gave a total of $14,500 in 2011 and 2014; the Maryland Automobile Insurance Fund, which gave $5,000 in 2013; the Frederick Frank Family Trust Foundation, which donated $50,000 in 2016; Grant Capital Investment, a real estate company headed by J.P. Grant, donated $14,000 in 2011; and Ariel Investments, which donated $3,680 in 2013.
The Maryland Automobile Insurance Fund payment
In addition to the payment it made through ABC, the quasi-public company created by state lawmakers for hard-to-insure drivers acknowledged on Tuesday that it gave a $7,500 donation to Healthy Holly LLC — for “outreach” — in 2012, when Pugh was a state senator.
Shortly after, Pugh successfully sponsored legislation supported by the company.
That payment was in addition to $5,000 that the insurer contributed to ABC in the collection of funds outlined above.
The Columbia businessman told The Baltimore Sun on Wednesday that his company had cut a check for $100,000 to then-mayoral nominee Pugh’s Healthy Holly company in 2016. He said he received one book.
“I want to be honest,” Grant said.
What does Pugh have to say?
Together, these deals mean Pugh’s company was paid nearly $800,000 for Healthy Holly books.
Steven D. Silverman, Pugh’s attorney, has said the books described by Kaiser Permanente and Associated Black Charities were not the same copies that UMMS paid to have distributed to the city school system.
“The documentation the mayor provided for the University of Maryland Medical System purchase are separate from any other sales of any other books to any other person or entity,” Silverman said.
Silverman said he didn’t have information about who printed the other copies of the books nor whether anyone besides UMMS, Kaiser or Associated Black Charities had bought copies.
“I’m not able to give a rundown of every sale to every entity,” Silverman said.
Asked why Pugh had previously told a reporter at The Sun that only UMMS had bought books, he said he didn’t know.