UMMS Board of Directors chair Stephen A. Burch and other members of the board met with Governor Larry Hogan and Senate President Miller. (Ulysses Muñoz / Baltimore Sun video)
The General Assembly may vote as early as this week on University of Maryland Medical System reform legislation that would require audits by the end of the year on its contracting practices related to the millions of dollars in business deals it struck with members of its board. That is necessary but insufficient. Audits can reveal whether the system followed its own procedures in striking the deals, can unearth details about which of them were competitively bid and can determine what documentation, if any, the system has about them. An audit might also find out whether the system has any other questionable arrangements the public has not yet discovered.
But as to whether any of the anomalies in the way the contracts were documented in tax and financial disclosure forms crossed the line from sloppiness to illegality, there is no substitute for full investigations by the U.S. attorney’s office, the state prosecutor’s office, or both. Those agencies have extensive experience in uncovering and prosecuting public corruption in Maryland, including investigations in the last decade that exposed and punished wrongdoing by a Baltimore mayor, two countyexecutives, severalcurrent and formerlegislators and a former Baltimore County superintendent, among others. An auditor might have been able to conclude that former Mayor Sheila Dixon’s office had lax controls over the gift cards it solicited to hand out to children at Christmas and lacked documentation for their proper use. But it was the state prosecutor’s office that was able to determine that Ms. Dixon used some of them for her own personal benefit.
Lawmakers in Annapolis on Friday grilled leaders at the University of Maryland Medical System as they considered sweeping legislation to reform the hospital network after allegations of self-dealing and no-bid contracting with board members.
Is anything like that going on here? We have no evidence of that. But The Sun’s reporting during the last two weeks has uncovered a number of gaps and anomalies that warrant investigation.
» UMMS has been inconsistent in the reporting of its business deals with board members. Its most recent IRS filings, it reported transactions with two board members, Francis X. Kelly Jr. and John W. Dillon, but not with others, some of which were more lucrative for the board members or their businesses. In some instances, the system reported its purchases of Healthy Holly books as benefiting a board member, Mayor Catherine Pugh, and in some instances it did not. UMMS officials have said they complied with all applicable tax laws. Is that correct?
» In two of the five years that UMMS made payments to Mayor Pugh’s Healthy Holly LLC for bulk orders of her self-published fitness-related children’s books, the system reported the $100,000 payments to the IRS as grants, one year characterizing the money as a grant to the Baltimore City Public School System, though listing its address as Ms. Pugh’s home address. Is that proper?
» UMMS has not provided any documentation related to the transactions involving Mayor Pugh's books — no invoices, no receipts, no records of where, when and how the books were distributed, or even whether they were printed at all. A spokesman said the system “didn’t feel the need to inspect the donation of the books.” Is that how the system typically operates, or were special accommodations made for this deal?
» Last week, Mayor Pugh filed corrections to several years of state financial disclosure forms from her years in the Maryland Senate in which she had not initially reported income from Healthy Holly LLC, even though she had reported various other sources of outside income. Last year, the state prosecutor’s office brought a four-count perjury indictment against former Baltimore County superintendent Dallas Dance for failing to report outside income on his financial disclosure forms. He pleaded guilty and was sentenced to six months in jail. Crucial to that case was prosecutors’ ability to show that the omissions were willfully false and intended to deceive others, not mere omission. They were only able to determine that through examination of emails, texts and other documentation as part of their investigation. Were Mayor Pugh’s failures to disclose a product of simple error? It will take more than an audit to determine that.
Neither the U.S. attorney’s office nor the state prosecutor makes a practice of announcing investigations, so it’s altogether possible that they’re already looking into these matters. If not, they should be. They are the only entities with the resources, expertise and mandate to get the full truth about UMMS’ dealings with its board members, whatever it may be.