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The auto insurance company created by the Maryland General Assembly for hard-to-insure drivers gave a $7,500 donation in 2012 to Health Holly LLC, the book company formed by Baltimore Mayor Catherine Pugh and currently under scrutiny for its operations. (Ulysses Muñoz / Baltimore Sun video)

The quasi-public company created by the Maryland General Assembly for hard-to-insure drivers gave a $7,500 donation in 2012 to then state-Sen. Catherine Pugh’s Healthy Holly book company, shortly before she successfully sponsored legislation supported by the company.

The money was for Healthy Holly’s “outreach program with the Associated Black Charities,” Mark McCurdy, executive director of the Maryland Automobile Insurance Fund, said Tuesday.

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McCurdy, who took over in 2015, said a search of the insurer’s records found a second donation in 2013 for $5,000 to Associated Black Charities when the nonprofit was soliciting funds to buy Healthy Holly books for distribution to African-American children.

The auto insurer’s contributions were made while M. Kent Krabbe was its executive director, McCurdy said. Krabbe went on to become a paid staffer on Pugh’s mayoral campaign in 2016 and served later that year as president of her inauguration committee. In March 2017, a few months after Pugh took office as mayor, he started a $107,000-a-year job at the city’s department of transportation. He left that post in February 2018.

Health provider Kaiser Permanente paid Mayor Catherine Pugh more than $100,000 for about 20,000 copies of her “Healthy Holly” children’s books during a period in which the company was seeking a lucrative contract to provide health benefits to city employees.

Krabbe could not be reached for comment. Pugh’s lawyer, Steven Silverman, also could not be reached for this article.

McCurdy said such donations from the insurer, known as MAIF, were “inconsistent with my philosophy” and no donations had been made by the insurer since 2015.

As a state senator, Pugh sponsored legislation praised by MAIF. An October 2013 news release on the organization’s website about the launch of a new kind of insurance plan said Pugh sponsored the legislation “that made this day possible.”

“I am excited for this great opportunity for all of those in Maryland who find themselves in need of MAIF and can now get a policy at a reasonable rate,” Pugh was quoted as saying in the news release. “It makes our seven years of fighting worthwhile for the citizens of Maryland.”

Krabbe was quoted personally thanking Pugh for her work on the bill in another news release.

“We thank all of the sponsors of Senate Bill 930. In particular, we would like to thank Senate Finance Committee Chairman, Senator Thomas “Mac” Middleton of Charles County and Senator Catherine Pugh of Baltimore City for their leadership and support of this bill as well as their advocacy for Maryland drivers in need of a more affordable alternative for their insurance premiums,” Krabbe said in the news release.

A timeline of Baltimore Mayor Catherine Pugh's "Healthy Holly" scandal.

Associated Black Charities confirmed Monday that it had received donations from five groups totaling about $87,000 to purchase 10,000 of the mayor’s books from 2011 to 2016. It said it received 4,500 books, of which 4,100 were distributed. An additional 5,500 were left to Healthy Holly LLC to distribute, the charity said.

The Maryland Insurance Administration declined to comment about MAIF’s donations. Tracy Imm, a spokeswoman, said the agency — which regulates all insurers in the state — would conduct a review of the three insurers that have publicly acknowledged donating funds directly to Healthy Holly LLC or to ABC for Healthy Holly books.

Meanwhile, the head of Baltimore’s Board of Ethics said Tuesday she expects the panel to discuss Pugh’s book sales in a closed session of its regularly scheduled meeting Wednesday afternoon.

Linda Pierson, the ethics board chair, said no one has filed a complaint with the panel about Pugh’s book sales but confirmed that the Associated Black Charities submitted a letter to the board to disclose that it had received donations from various groups, including MAIF, to purchase books from Healthy Holly LLC.

“I have received the letter,” Pierson said. “But it is confidential. As of this morning we had not received a complaint.”

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The five-member ethics board typically requires someone to file a complaint before it begins its own investigation of potential ethical lapses. But Pierson said a majority of the board can vote to initiate its own complaint to prompt a probe.

“We will be discussing the possibility of opening a complaint,” Pierson said.

City Councilman Ryan Dorsey has filed a complaint with the city’s Inspector General, but not with the ethics board, she said.

Those sales were in addition to Pugh’s no-bid deal with the University of Maryland Medical System, which paid her $500,000 for books at a time when Pugh sat on the UMMS board. Not all of the books were printed, and Pugh has returned some of the money.

Pugh took a leave of absence as mayor on Monday, citing health reasons. Several public officials have called for her to step down.

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