Maryland Gov. Larry Hogan named Wednesday his initial batch of new appointees to the troubled board of directors at the University of Maryland Medical System, the first step toward reorganizing the board following a scandal over board members having lucrative contracts with the 13-hospital system.
The volunteer board came under fire in March when The Baltimore Sun reported a third of its 30 members or their companies had deals with the hospital system, some of which were not competitively bid. They included then-Mayor Catherine Pugh of Baltimore, a Democrat who made hundreds of thousands of dollars selling children’s books in a sole-source arrangement with UMMS. She later resigned from the board and as mayor amid multiple investigations into the book deals.
In a separate action Wednesday, the hospital board elected new leadership from among its current members and invited four members who voluntarily took leaves of absence to return.
The new appointments to the board are required under a law state legislators passed this year that mandated several reforms at the hospital system. All previously appointed board members must step down by the end of the year, to be replaced or reappointed by the governor.
On the last day of Maryland's General Assembly session, lawmakers gave final approval to sweeping legislation that would reform the University of Maryland Medical System’s board of directors amid revelations of single-source contracts for some board members.
Board members can serve up to two five-year terms. In the past, board members often stayed past the end of their terms if a governor didn’t replace them.
“I pledged that I would appoint new board members who will serve with integrity and accountability, and today, I am delivering on that promise,” Hogan, a Republican, said in a statement. “This is another critical step as UMMS works to restore public trust.”
The medical system board met Wednesday morning and elected James “Chip” DiPaula Jr. as chairman and Alexander Williams Jr. as vice chairman. They’ll serve in those roles for the remainder of the year. Former Chairman Stephen A. Burch was among several board members who resigned amid the scandal.
DiPaula, who Hogan appointed to the board in 2016, is a former state budget secretary and chief of staff to then-Gov. Robert L. Ehrlich Jr., a Republican. DiPaula later founded an e-commerce firm.
Williams is a retired federal judge who has been tapped for other leadership roles, including chairman of the state’s Commission to Restore Trust in Policing and co-chairman of a commission on redistricting that drew up a proposed map for Maryland’s 6th Congressional District. Hogan appointed Williams to the hospital system board in 2015.
In a statement released by UMMS, DiPaula said members of the board “regret the actions and poor decisions which have jeopardized confidence in the system.”
The new board members nominated by Hogan are:
» Eliza Basnight, senior vice president of supply chain for the American Red Cross. Previously, she was chief of staff for the U.S. Mint under the Obama administration and head of the Center for Women Veterans at the U.S. Department of Veterans Affairs.
» Kathleen A. Birrane, an attorney with the firm DLA Piper who previously was the top lawyer for the Maryland Insurance Administration.
» Dr. Joseph Ciotola, health officer for Queen Anne’s County and medical director for that county’s Department of Emergency Services.
» Bonnie Phipps,senior vice president and group operating executive for Ascension Health, a Catholic health system that operates in 21 states and the District of Columbia, including Southwest Baltimore’s St. Agnes Hospital, where she was president from 2005 to 2015.
» Joseph T.N. Suarez, a director at Booz Allen Hamilton, a business consulting firm.
» John T. Williams, chairman and CEO of Jamison Door Company in Hagerstown. He previously served as a newspaper and TV executive.
In addition to mandating a gradual replacement of the current board and requiring term limits, the new law banned no-bid contracts for board members and required a state audit of the hospital system’s contracting practices.
The four members the board invited to return from leave were: Francis X. Kelly, a former state senator whose insurance company had UMMS contracts; August J. Chiasera, an executive with M&T Bank, which has contracts with the system; James A. Soltesz, CEO of a civil engineering firm that had a contract with the system; and Walter A. Tilley Jr., CEO of Home Paramount Pest Control, which also had a contract with the system.
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The “business relationships” of those board members “will be competitively bid under stringent guidelines,” UMMS said in a statement.
In addition to Pugh and Burch, others who resigned from the board in the wake of the self-dealing scandal included John W. Dillon, who had a $13,000 monthly consulting gig with UMMS; Robert L. Pevenstein, whose technology companies and son made money from UMMS; Kevin O’Connor, a former firefighter and union lobbyist, and Dr. Scott Rifkin, whose company provided free software to the hospital system.
Before the controversy erupted, Dr. Roger Schneider, a vascular surgeon whose practice had three contracts with the system, had resigned, leaving an opening on the board.