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In wake of Healthy Holly scandal, Baltimore City Council gives preliminary approval to stronger ethics law

In wake of Healthy Holly scandal, Baltimore City Council gives preliminary approval to stronger ethics law
The Baltimore City Council has voted unanimously to strengthen the city’s financial disclosure laws, the first reform measure to win approval from a package proposed this spring amid the scandal over former Mayor Catherine Pugh’s sales of her self-published children’s books. (Jerry Jackson / Baltimore Sun)

The Baltimore City Council voted unanimously Monday to strengthen the city’s financial disclosure laws, the first reform measure to win approval from a package of bills proposed this spring amid the scandal over former Mayor Catherine Pugh’s sales of her self-published children’s books.

The ethics bill, which will be up for final approval at the council’s next meeting in August, would require disclosures of board memberships and clarify which city employees must file an annual disclosure of their financial interests. It also would stiffen the penalties for failing to file the forms.

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Democratic Councilman Ryan Dorsey, who sponsored the legislation, said the proposal would give the public more information to hold officials accountable and make it easier for city employees to follow the rules.

“It’s pretty hard to take ethics laws seriously knowing there’s an annual flood of people asking, ‘Do I have to file?’” he said.

Pugh resigned May 2 after The Baltimore Sun disclosed hundreds of thousands of dollars in sales of her “Healthy Holly” books, some to organizations that do business with the city, and a raid of her home and office by federal authorities.

During a leave of absence by the Democrat before she quit, the City Council moved quickly to propose the package of measures to update ethics rules and limit mayoral power.

Dorsey has said he began working on the ethics disclosure measure even earlier. He said he was prompted to act by the resignation of former Police Commissioner Darryl De Sousa in May 2018 after De Sousa was charged with failing to file federal tax returns. De Sousa also had failed to file city ethics forms.

But Dorsey said the legislation took on added urgency as the book scandal engulfed Pugh.

Pugh disclosed on city forms that she owned a company called Healthy Holly LLC, but she was not required to reveal the company’s sources of income.

The bill that advanced Monday does not directly address that issue, but it would close a loophole that could have allowed officials to hide corporate interests by using layers of shell companies.

The bill also would require the disclosure of board memberships. The first Healthy Holly deal to be revealed was between Pugh and the University of Maryland Medical System, on whose board she served. Pugh disclosed the board membership on a city ethics form filed when she was running for office, but not once she was elected.

“The public deserves for a journalist to be able to find that easily,” Dorsey said.

The city’s inspector general has gathered information about board memberships from all city elected officials as part of a review of city contracts.

The ethics bill also creates a system for dealing with officials and employees who fail to file their forms. First, their managers would be notified, then the inspector general’s office. After 60 days, employees who still haven’t filed would face being suspended from work without pay. The current monetary penalty is a fine of $2 for each day a form is late, up to a maximum of $250. The bill would raise that to $10 per day, with a maximum fine of $1,000.

In April, the council called on Pugh to resign but had no formal power to oust her. In response, Democratic Councilman Kristerfer Burnett introduced a change to the city charter to give the council the ability to do so. Meanwhile, Democratic Councilman Bill Henry has proposed lowering the number of votes required on the council to overturn a mayoral veto of legislation and giving the council the authority to add spending to the annual budget; it currently can only cut spending from the mayor’s budget proposal.

Those measures are awaiting a hearing before a council committee. Any changes to the charter would need the approval of voters in next year’s election.

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Last year, voters approved a charter amendment that guarantees the independence of the city’s inspector general. And under the leadership of new Inspector General Isabel Mercedes Cummings, the office’s investigations have been linked to the resignations of several city agency leaders, including Transportation Director Michelle Pourciau.

But the city dedicates no funding and no staff for routine ethics enforcement, such as the monitoring of financial disclosure forms. Instead, staff at the Department of Legislative Reference spend part of their time on ethics matters. Dorsey has proposed legislation to give the inspector general responsibility for ethics oversight. That measure is awaiting a hearing.

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