Don’t miss Trey Mancini and Joey Rickard guest bartend at the first Brews & O’s event June 10th. Get your tickets today!

University of Maryland Medical System receives federal subpoena as part of investigation into Baltimore mayor

The University of Maryland Medical System on Thursday received a subpoena for documents in a federal investigation into Baltimore Mayor Catherine Pugh’s business dealings.

Michael Schwartzberg, a spokesman for the hospital network, said the medical system “has received a grand jury witness subpoena today from the U.S. Attorney’s Office for the District of Maryland seeking documents and information from UMMS in order to conduct their investigation of Mayor Pugh.”

“We are fully cooperating with the investigative process,” Schwartzberg said.

Federal law enforcement agents fanned out Thursday across Baltimore, raiding City Hall, the home of the embattled Pugh, and several other locations as the investigation widened.

Dave Fitz, an FBI spokesman, confirmed that agents from the Baltimore FBI office and the Washington IRS office were executing search warrants Thursday morning at those locations, as well as other addresses associated with the Democratic mayor. It was the first confirmation that federal authorities, as well as state officials, are investigating the mayor’s activities.

Full coverage: Coverage of University of Maryland Medical System board deals and Mayor Pugh's 'Healthy Holly' books »

Pugh, 69, is under investigation by the Maryland Office of the State Prosecutor for sales of the “Healthy Holly” books.

Citing health reasons, Pugh announced April 1 that she was taking a leave of absence amid the growing scandal over the book sales. The Baltimore Sun reported last month that Pugh was paid $500,000 by the medical system for 100,000 of the books to distribute to schoolchildren, as part of a no-bid arrangement.

UMMS paid Pugh in five installments from 2011 to 2018. At a news conference late last month, the mayor acknowledged that a fourth book in her Healthy Holly series — for which UMMS paid her $100,000 in 2017 — was “delayed” and was only now being produced.

Nonetheless, the medical system paid her another $100,000 in 2018 for a fifth book. Pugh has admitted that she has not finished that book, and said she has returned the $100,000 payment to UMMS.

Pugh was among nine UMMS board members who had business deals with the medical system that they were tasked with overseeing. Medical system CEO Robert A. Chrencik — who earned $4.3 million in 2017 — was placed on leave March 21 as accusations of self-dealing rocked the hospital network. Pugh and two other board members have resigned, while four others are on leave.

Health provider Kaiser Permanente later acknowledged that it paid Pugh more than $100,000 to buy about 20,000 copies of her books during a period when the company was seeking a lucrative contract to provide health insurance to city employees. Others with business before the city, including Columbia businessman J.P. Grant, also wrote checks for the book.

In all, Pugh's Healthy Holly LLC took in at least $800,000 from local entities since 2011, The Sun has reported.

Kaiser did not respond to a request for information about contacts it has had from law enforcement or regulators.

Other insurers have also acknowledged donations made toward books through a separate entity or directly to Pugh’s business, Healthy Holly LLC. The Maryland Auto Insurance Fund, which gave $7,500 to Healthy Holly LLC and $5,000 to Associated Black Charities for books, would not say whether it had been contacted by authorities.

“We will cooperate fully with any governmental investigations. Out of respect for the process, moving forward we will not comment on the existence or nature of any ongoing investigations,” said Cathy Nyce, a spokeswoman for MAIF.

CareFirst BlueCross BlueShield, which gave $14,500 to Associated Black Charities for books, gave The Sun a statement that said: “CareFirst will cooperate with any and all investigations related to this matter. However, we do not comment on investigations.”

The Maryland Insurance Administration has said it is reviewing the conduct of these insurers and others.

Baltimore Sun reporter Meredith Cohn contributed to this article.

luke.broadwater@baltsun.com

twitter.com/lukebroadwater

Copyright © 2019, The Baltimore Sun, a Baltimore Sun Media Group publication | Place an Ad
86°