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Mayor Pugh's book deal deserves more scrutiny

James Cabezas, a former investigator for the prosecutor’s office, filed a complaint against Baltimore Mayor Pugh with Maryland State Prosecutor alleging that Pugh deliberately did not report her Healthy Holly company in annual disclosure forms when she was a state senator.

Mayor Catherine Pugh’s vague, evasive statements the past two weeks — which went from calling the inquiry a “witch hunt” to “I pay my taxes, and everything is filed” to “I’m not perfect” — have not only guaranteed that this story remains in the news but have also led to questions about potential criminal liability for misstatements on mandatory disclosures (“Former investigator files complaint against Baltimore Mayor Pugh with Maryland prosecutor over ‘Healthy Holly,’” March 25).

As a former federal and city prosecutor, I fear this is not the only basis of potential criminal exposure that investigators are likely to explore. Here are some questions Mayor Pugh needs to be ready to answer:

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First, if the majority of books were not actually printed (and even if they were), did the mayor report inflated printing expenses to reduce her overall taxable profit? State and federal taxes on $20,000 of profit versus $100,000 would amount to a difference of tens of thousands of dollars in what she should have paid each year.

Second, annual transactions with board members of more than $100,000 must be specially reported on tax forms. Were the payments of $100,000 — exactly the amount that avoids triggering this tax requirement — a coincidence or consciously selected to skirt this reporting rule?

Third, certain untaxed institutions like the University of Maryland Medical System (UMMS) cannot contribute to political campaigns without surrendering their nonprofit designation. When then-Senator Pugh collected money from UMMS and then funneled a near-maximum contribution of $5,000 to her own mayoral campaign account, was she aware of campaign finance laws that prevent nonprofits from donating to political campaigns? These same laws prohibit giving the money to someone else to make the unlawful contribution.

Finally, since 2011 when Ms. Pugh brokered the book deal, she has been the sole sponsor or a lead co-sponsor of over a dozen pieces of legislation related to the university hospital system. Did she advocate for the legislation after consulting with one of the few individuals who knew of her six-figure book deal?

Local media broke this incredible story, but now this is also likely the subject of criminal investigation. The last thing Baltimore needs is another mayor under indictment. But federal prosecutors, the comptroller, the state elections board, and the Office of the State Prosecutor will have to determine whether this is just the latest in Mayor Pugh’s long-running pattern of “misunderstandings” or whether this particular transgression also violates campaign finance laws, state and federal tax laws, or Maryland’s bribery statutes.

Thiru Vignarajah, Baltimore

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