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Bob Pevenstein, who resigned from UMMS board amid self-dealing scandal, also resigns from Board of Regents

Robert L. Pevenstein, one of a handful of University of Maryland Medical System board members to resign amid a self-dealing scandal there, has resigned from the University System of Maryland Board of Regents as well, the university system confirmed Monday.

No reason was given. Pevenstein did not respond to requests for comment Monday.

Pevenstein was appointed to the Board of Regents by Gov. Larry Hogan in 2015, after having served a previous stint there from 2003 to 2008. He had been a UMMS board member for 16 years before his resignation last month.

A university system spokesman confirmed Pevenstein’s resignation after being asked about it by The Baltimore Sun. Pevenstein’s profile also was removed from the system’s website.

Michael Ricci, a spokesman for Hogan, said the governor “is grateful to Mr. Pevenstein for his service to the state, and wishes him all the best.”

Pevenstein, the founder of technology companies and president of a consulting firm, had defended last week lucrative contracts he and his UMMS board colleagues had with the hospital system. He said UMMS is not subject to state procurement laws and noted that they all had disclosed the deals internally and to the Maryland Health Services Cost Review Commission.

“I know what was disclosed in our committees,” said Pevenstein, who chaired the financial and audit committees that oversaw the UMMS board’s operations, in an article that appeared in The Sun over the weekend. “What we’ve done is nothing wrong.”

Baltimore Sun coverage of the "Healthy Holly" scandal »

His comments stood in stark contrast to statements from UMMS officials, who are in the midst of a review of all board member contracts.

“Let me be clear,” interim UMMS CEO John Ashworth said, “this organization has made mistakes, and we are working to rectify those as quickly as possible.”

The self-dealing among UMMS board members has sparked outrage among state lawmakers and members of the public in recent weeks, after The Sun reported in March that nine UMMS board members held contracts with the system worth hundreds of thousands of dollars, some of which were never competitively bid. A tenth board member had a no-cost contract.

Among the board members was then-Mayor Catherine Pugh, who was paid $500,000 by the system for her self-published “Healthy Holly” children’s books. The mayor resigned from the board, and then as mayor, amid the widening scandal. Several other board members resigned as well, as did board chair Stephen Burch and UMMS CEO Robert Chrencik.

Multiple investigations and reviews have been launched, including by the FBI, the State Prosecutor and the city’s Ethics Board. The hospital system hired a consultant to conduct an internal review of board member contracts.

Pevenstein and his son have earned hundreds of thousands of dollars from UMMS over the past decade.

In 2017, Pevenstein reported in state financial disclosure forms that his firms earned more than $150,000 from UMMS contracts. He stated that he took in more than $108,000 on commissions on contracts between UMMS and The Optime Group, which handles workforce management, and Profit Recovery Partners, which focuses on cost reductions for big companies.

In 2018, Pevenstein reported making more than $100,000 consulting for the system — a deal he said UMMS executives approached him about — in addition to more than $50,000 from his work for Optime and between $10,000 and $50,000 from his work with Profit Recovery Partners.

In both those years, Pevenstein also reported that his son, Scott Pevenstein, made more than $100,000 from commissions related to UMMS employees enrolling in and paying for Aflac supplemental benefit insurance programs.

Pevenstein had acknowledged his UMMS board position, his consulting company and his roles with Optime and Profit Recovery Partners in disclosures to the Maryland State Ethics Commission, which are required of Board of Regents members.

In his most recent disclosure form related to his regents position, Pevenstein did not indicate any personal deals with the system.

Baltimore Sun reporters Liz Bowie and Luke Broadwater contributed to this article.

krector@baltsun.com

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