John Ashworth, the acting CEO of the University of Maryland Medical System, said Friday that he is prepared to act “swiftly and properly” upon completion of an internal review to hold staff accountable for any problems with contracts the system had with a third of its board members.
After The Baltimore Sun reported on the contracts in March, then-CEO Robert Chrencik acknowledged several were no-bid contracts, and elected officials, the public and even other board members reacted with shock, outrage and questions about who else at the system knew about the deals.
Chrencik, who has since resigned, was not the only UMMS executive aware of the contracts.
Robert Pevenstein, who resigned from the board, said in an interview this week that Chrencik and Henry Franey, the system’s chief financial officer, approached him about a consulting deal that paid Pevenstein more than $100,000 last year. And UMMS Senior Vice President and General Counsel Megan Arthur received Pevenstein’s financial disclosure forms, which listed his contracts, before they were filed with the Maryland Health Services Cost Review Commission.
Another former board member, former Democratic Mayor Catherine Pugh of Baltimore, in March released a 2011 letter written by UMMS Senior Vice President and Chief Administrative Officer Jerry Wollman to Baltimore City Public Schools, asking for confirmation that the schools would accept a shipment of Pugh’s “Healthy Holly” books that UMMS had bought.
Asked about UMMS executives who were aware of the business relationships of Pevenstein, Pugh and other board members, Ashworth responded Friday with the statement about the pending review by Nygren Consulting of California. He said in April that UMMS hired the company to document, review and determine “the legality” of the contracts.
“Based on the facts and findings of the Nygren report, the appropriate personnel, governance and policy decisions will take place, swiftly and properly,” Ashworth said Friday. “Let me reemphasize, there will be accountability, as nothing is more important than the trust of those that depend on us.”
The late House of Delegates speaker, Michael Busch, himself a board member, said before he died April 7 that the individual deals some board members entered into with system management were not disclosed to other board members.
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Ashworth has said that the report will be completed in a “timely” manner, but has not given a deadline for its completion.
Michael Schwartzberg, a UMMS spokesman, said this week that “Nygren is still working on the report and very much driving the timeline,” and that it “would be inappropriate to share any details prior to its completion.”
Pugh resigned May 2 as mayor and is under federal and state investigation for her business deals. In addition to Pevenstein, Pugh and chairman Stephen Burch, at least three other members have resigned from the board. Four other board members whose companies had contracts are on leave from the volunteer panel.
The General Assembly passed legislation, which Republican Gov. Larry Hogan signed into law, to force the entire board to resign by the end of the year and to require a full financial audit by certified public accountants in the state’s Office of Legislative Audits.
It’s that report, not the pending review from the UMMS consultant, that state House Minority Leader Nic Kipke is counting on. Kipke said Nygren specializes in corporate governance reviews, not financial auditing.
“We in the legislature decided to not rely on [Nygren] for that report because we had concerns about how deep it would go and what it might leave undiscovered,” Kipke said.
He said the Office of Legislative Audits report, which must be delivered by December but which he expects sooner, is “really where we are going to learn the full extent of what was going on that could be perceived as unethical and could possibly even be found to be criminal.”