The University of Maryland Medical System made a $20,000 contribution to Baltimore Mayor Catherine Pugh’s inaugural committee while she was serving as one of the hospital network’s board members, according to records shared by the committee.
The money toward a day of festivities in December 2016 to celebrate the then-state senator’s election to the city’s top office was not publicly disclosed and came at a time when the medical system was regularly paying her installments of $100,000 for children’s books she authored.
The IRS requires nonprofit organizations like UMMS to disclose grants to other organizations; in a 2015 tax filing, UMMS disclosed that it gave $25,000 to support the inauguration of Gov. Larry Hogan. But two years later, the backing for Pugh’s committee was not included in its filing.
Michael Schwartzberg, a spokesman for UMMS, said that’s because the hospital network received 28 tickets to “inaugural events” for Pugh in exchange for the $20,000 payment.
“UMMS would only consider the excess of the payment over the fair market value of these tickets to be a donation,” Schwartzberg said in an email. He said Pugh’s inaugural committee did not set a value for each ticket. Because the medical system received tickets in exhange for the payment, UMMS officials concluded it was not a charitable contribution that needed to be reported to the IRS.
Schwartzberg did not specifically respond to questions about why UMMS did disclose the contribution to Hogan’s inauguration.
“Interpretation of tax laws — like any other law — can change over time,” he said in a later email.
Most events on Pugh’s inauguration day, from the formal ceremony to community parties, were free and open to the public. But tickets were required for an evening event at the Baltimore Hilton — they were advertised for $100 per person.
Eve Borenstein, a Minnesota attorney who advises nonprofits on filling out their tax forms, said that while the law is murky, if UMMS had been her client she would have advised it to disclose the $20,000 because of its relationship with Pugh.
“Not saying you’re doing something with something connected to your board member raises the inevitable question,” she said. “A good adviser’s going to be saying to them this whole return is about transparency.”
UMMS is already facing questions about how it accounted for its relationship with Pugh in the IRS filings, known as 990s. The medical system paid Pugh $500,000, in five installments of $100,000 from 2011 to 2018, to purchase 100,000 copies of her self-published Healthy Holly books. In its tax filings for 2015 and 2017, UMMS listed the $100,000 book payments as grants — one to her company directly and the other to the Baltimore City School Systems — even though it has called the payments purchases.
After The Baltimore Sun revealed the no-bid book deal from UMMS, Pugh stepped down from the board and returned $100,000 to the medical system.
Pugh’s inaugural committee acknowledged last week that it had failed to file its own 990s with the IRS. Jon Laria, one of the committee members, said Wednesday that it has now filed, and he sharedcopies of the filings with The Sun. He also provided a breakdown of $474,000 in contributions to the committee, which is not required by law, and a detailed accounting of how the money was spent.
That breakdown revealed the contribution to the inaugural committee from UMMS, as well as contributions from other nonprofits that operate in Baltimore and Maryland. They took different approaches to disclosure, their own tax filings show.
Johns Hopkins University and the Hopkins medical system gave a combined $25,000, which they reported on their IRS filings. Developer Scott Plank’s foundation disclosed a $10,000 contribution.
But Mercy Medical Center and MedStar Health each gave $10,000, according to the inaugural committee, and did not disclose the spending on their Form 990s. Officials from those institutions did not immediatley respond to a request for comment.
As would be expected, the inaugural committee spent its funds mostly on organizing the December 2016 events. It paid the Hilton $182,000 for catering and “setup & A/V,” according to the records the committee shared. Events planning firm Feats received $206,000.