Acting UMMS chief: Baltimore Mayor Pugh approached medical system for book deal

Baltimore Mayor Catherine Pugh solicited a lucrative no-bid arrangement to sell copies of her self-published children’s books to the University of Maryland Medical System in “direct conversations” with the hospital network’s CEO, a top system official testified Saturday in Annapolis.

Acting CEO John W. Ashworth III said his predecessor, Robert A. Chrencik, talked with Pugh about buying the “Healthy Holly” books.

“We do know that the mayor approached us,” Ashworth told the House Health and Government Operations Committee. “She had direct conversations with the president and CEO at the time, and possibly others. But we need to look into that even more to make a determination about how all of that occurred.”

The committee meeting came as Maryland legislators met for the next-to-last working day in their annual legislative session. A bill to reform the governance of UMMS still faces a final vote in the Maryland Senate on Monday.

A bill affecting the future of the Pimlico Race Course in Baltimore also is still to be resolved. Baltimore’s House delegation voted 16-0 Saturday to oppose a plan that would help fund a “super track” at Laurel Park race course in Anne Arundel County. That set up a fight over the future of horse racing in Maryland on “Sine Die” day Monday, the final day of the session. Pugh was a leading advocate for redeveloping Pimlico Race Course before she took a leave of absence.

Ashworth’s testimony came after earlier statements from Pugh and Chrencik about how the book deal, which ultimately paid Pugh at total of $500,000 between 2011 and 2018, came about. Pugh has said someone at the system expressed interest in her “Healthy Holly” books while she was paging through a copy before the start of a meeting of the system’s volunteer board of directors.

“Prior to a board meeting at the University of Maryland Medical System, I shared it with one of the colleagues there,” Pugh said at a news conference last month. “They liked it and felt it was a part of their own mission and they raised the question, ‘How many?’ I said I wanted to get the book out to young people in the Baltimore City Public Schools.” The mayor did not say whom she talked with.

Pugh’s attorney, Steven Silverman, did not respond Saturday to a request for comment for this article.

Chrencik has said he couldn’t remember whether Pugh approached the system, but he acknowledged that UMMS did not do a competitive search for children’s books prior to selecting hers to buy in bulk.

Amid the growing scandal, Pugh has taken a paid leave of absence from her $185,000-a-year job as mayor, resigned from the UMMS board, and paid the system back $100,000. Chrencik was placed on paid leave from his $4.2 million post. The Maryland State Prosecutor has started an investigation into the book deal.

Ashworth’s statement prompted several delegates to question Chrencik’s status.

“We have questions why the CEO is on paid leave instead of unpaid leave,” said Del. Terri Hill, a Howard County Democrat who is a physician.

“We learned today that the CEO who is on leave was approached by Mayor Pugh to buy her books and then he allowed the system to spend hundreds of thousands of dollars on them or, at best, he looked the other way,” said Del. Nic Kipke, the Anne Arundel County Republican who is House minority leader. “With that in mind, and with all of the other questionable contracts, I believe it’s inappropriate that he’s on leave with pay.”

On short notice, delegates on Friday summoned Ashworth to answer unresolved questions as the General Assembly completes its work on the fast-tracked reform bill.

“On two separate occasions, we have asked who approved these contracts that have come under scrutiny and have not received an answer,” Del. Shane Pendergrass, a Howard County Democrat who is chairwoman of the committee, wrote in a letter calling for Ashworth and UMMS board Chairman Stephen Burch to appear before her committee. “Was the board aware of these no-bid contracts? … Who approved these contracts?”

Both chambers have voted unanimously for the legislation — which was introduced by Baltimore Democratic Sen. Jill P. Carter — but small differences between the bills must be ironed out before the bill can be sent to Hogan. Republican Gov. Larry Hogan has said he supports reforming the UMMS board.

Burch did not appear before the committee Saturday, but Ashworth pledged an audit of the system’s contracting practices.

Ashworth said he was focused on “getting to the bottom of the issues surrounding our board.”

“I know you all are frustrated with this,” he said. “I am frustrated with this. … We are taking full responsibility for everything that has happened here and taking full responsibility for correcting what has happened.”

The medical system has been under fire since last month, when The Baltimore Sun reported that nine of 30 board members had deals benefiting their companies with the system of hospitals they were tasked with overseeing. Three board members, including Pugh, have resigned from the board, while four are on leave.

In all, UMMS paid Pugh to produce 100,000 books to send to the Baltimore school system, but she said last month that the fourth installment of the five-book series was only then being produced and acknowledged that the fifth book cannot be printed at this time. School officials have called the books “unsolicited” and say thousands are sitting in a warehouse.

As the medical system has previously announced, Ashworth told committee members Saturday that a consulting firm, Nygren Consulting of Santa Barbara, Calif., is working to find out more about the insider contracts.

“Did we appropriately go out and bid a pest control company?” Ashworth said. “Did we do that, as well, with banking? … Did we do those contracts in accordance with our procedures?”

Carter’s bill would require the board to resign, mandate an independent audit of financial management, and prohibit the practice of awarding no-bid contracts to board members. Board members also would have to file financial disclosure forms that would be turned over to the leadership of the House, the state Senate and the governor.

Hill said she was concerned about business relationships with other board members, particularly former Sen. Francis X. Kelly whose Baltimore County business, Kelly & Associates Insurance Group, has made millions with the system’s hospitals.

“I’m at least as concerned, if not more so, about the issue with Kelly & Associates,” Hill told Ashworth.

Kelly and two of his sons have taken voluntary leaves of absence from the boards of six affiliated UMMS organizations amid the continuing controversy.

A spokesperson for Kelly did not immediately return a message Saturday night seeking comment.

Del. Kathy Szeliga, a Baltimore County Republican, questioned the acting CEO on why one of Pugh’s lieutenants — former Democratic Baltimore County Executive James T. Smith — is on the UMMS board while working at City Hall.

“I would say perhaps he should consider being on leave, as well,” Szeliga said.

Smith resigned from his post as adviser to the mayor on Friday, it was announced Saturday.

Meanwhile, Baltimore’s House delegation formally objected to the plan that would allow The Stronach Group to use state bonds to pay for upgrades at horseracing facilities in Laurel and Bowie, provided the company makes progress on redeveloping Pimlico Race Course in northwest Baltimore.

The delegation’s unanimous rejection of the plan, which is making its way through the Senate, could spell defeat for the last-minute effort to pass the bill.

The version of the bill pending in the Senate would grant The Stronach Group’s main request: Allow the state to issue bonds that would be used to accelerate $120 million worth of improvements at Laurel Park and the Bowie Training Center. The bonds would be paid back using state subsidies from slot machines in the state’s Racetrack Facilities Renewal Account.

The Stronach Group would not be allowed to get the money from the bonds unless it met a series of requirements for presenting and winning approval for a development plan at Pimlico.

But that development plan would not be required to include a horseracing track, even though state law currently requires the Preakness Stakes, the second jewel in the Triple Crown, to be run at Pimlico.

“We want Pimlico to be redeveloped, but we also want Preakness to stay,” said Democratic Del. Tony Bridges, whose district includes the track.

“Our fight here is that we want this to stay here,” said Democratic Del. Regina Boyce. She raised concerns that the bill would allow The Stronach Group to “make a pseudo-plan for the Pimlico land and still move to Laurel.”

Baltimore Sun reporter Ian Duncan contributed to this article.

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