University of Maryland Medical System CEO Robert A. Chrencik was placed on leave Thursday as accusations of self-dealing and no-bid contracting with board members have rocked the hospital network.
Board chairman Stephen A. Burch announced that Chrencik — who is paid more than $4.2 million a year — will take a leave of absence beginning Monday. He will continue to be paid while on leave, a spokesman said.
John Ashworth, a senior vice president, will act as interim CEO.
“There is nothing more important than the trust of those that depend upon the Board’s leadership,” Burch said. “And, over the past week, I’ve had the proper time to listen to concerns and reflect. The Board and I are firmly committed to evolving our governance principles and operating with even more transparency.”
By a unanimous vote at an emergency meeting Thursday morning, board members chose to submit to an outside, independent review of the system’s contracting practices.
The medical system has been under intense scrutiny since The Baltimore Sun reported that nine members of its board of directors have business deals with the hospital network that are worth hundreds of thousands to millions of dollars each.
Since then, three board members — including Baltimore Mayor Catherine Pugh — have resigned. Four others have taken leaves of absence.
Pugh resigned from the system’s board of directors Monday amid scrutiny over her deal to sell 100,000 copies of her children’s book series to the medical system from 2011 to 2018 for $500,000. Pugh has said the books were distributed to schools and daycare programs. Baltimore school system officials have said 8,700 of those books are sitting unread in a warehouse.
Pugh also amended seven years of ethics forms she filed while she was in the state Senate that did not disclose her Healthy Holly LLC, through which she sold the books. Pugh said Wednesday that she was returning the final $100,000 payment to the University of Maryland Medical System.
The announcement of Chrencik’s leave followed a closed-door meeting Wednesday at the State House, during which Maryland Senate President Thomas V. Mike Miller said he and Gov. Larry Hogan repeatedly pressed Chrencik over who authorized the $500,000 deal for Pugh’s self-published books.
But Miller said Thursday that Chrencik would not give the men a straight answer.
“The governor wanted to press that issue very strongly,” Miller said. “I asked the question also: ‘Why did it continue? ‘They said, ‘She continued to write more books.’ They didn't tell us who authorized the check, who signed the check and who approved the deal.”
Miller said he left the meeting with unanswered questions about the system’s contracting practices.
“Apparently there wasn’t oversight on the audit committee,” Miller said. “Who wrote the check, who told them to write the check, that wasn’t answered.”
Hogan described the meeting as “very direct, very forceful … where we left no uncertainty about our concern about some of the things that had been going on with the UMMS board.”
“Nobody should be serving on the board while having any kind of financial relationship with the hospital system,” Hogan said. “I believe those folks that are conflicted need to resign before we reconstitute this board with legislation.”
He called the move to place the CEO on leave a “smart idea.”
Miller said House Speaker Michael Busch feels “let down” by what happened at the medical system.
Busch on Wednesday announced legislation that would require an independent audit of financial management at the system by Dec. 31. It would require the governor’s appointees to the board to submit to vetting by the state Senate. And it would prohibit the practice of awarding no-bid contracts to board members.
Del. Nic Kipke, an Anne Arundel Republican and House minority leader, introduced and fast-tracked the bill on behalf of Busch, who was absent Thursday.
Kipke noted that it was “an unprecedented move” for a Republican to introduce a bill on behalf of the Democratic House speaker, and said it underscored the serious and bipartisan concern over the unfolding scandal at the medical system.
Kipke said he was in “sincere solidarity” with Busch on the issue.
“The allegations, in my opinion, are really troubling, potentially despicable and just outright rotten,” he said.
The House immediately took multiple votes to accept the late-filed bill and send it straight to a committee for consideration. With less than three weeks left in the 90-day General Assembly session, the customary deadlines for introducing bills and scheduling committee hearings have passed already.
The legislation will act as a companion bill to legislation filed in the Senate by Sen. Jill P. Carter, the Baltimore Democrat who has raised the issue of conflicts of interest at the medical system.
“I thank Speaker Busch for recognizing the need for reform,” Carter said. “This is just the beginning of my push for such reforms as a senator. I hope the speaker and the House of Delegates begin to earnestly consider further reforms necessary to increase transparency and accountability in Maryland. I’m also encouraged by the seriousness with which President Miller and the governor have responded to the outrageous self-dealing and secrecy of UMMS.”
When asked Thursday about her Senate ethics forms, Pugh said it was an “error” that her Healthy Holly LLC was not listed. She amended her forms to include the company last week.
“Let me just say, it was an error,” Pugh said.