Baltimore Mayor Catherine E. Pugh did not fully disclose the $500,000 business relationship she started in 2011 with the University of Maryland Medical System during the time she was a state senator, a period during which she sat on the hospital network’s board of directors and oversaw issues involving UMMS in the legislature, according to The Baltimore Sun’s review of financial disclosure forms.
After The Sun asked questions Friday about the disclosure forms she filed while in the Senate, Pugh submitted an amendment for seven years of reports filed with the state ethics commission. The new documents disclose that she established her company, Healthy Holly LLC, which sold children’s books she wrote to the medical system.
“I am submitting the following information to amend financial disclosure statements I previously filed in my role as a legislator in the following calendar years: 2010-2016,” Pugh wrote. She listed Healthy Holly LLC, which she incorporated in January 2011, the same year she began the sales to the medical system.
“’Healthy Holly’ is a series of books about eating healthy and doing exercise,” she writes.
Pugh then states that the “University of Maryland Medical System purchased books to be given out to the Baltimore City School System,” distributing them in 2012, 2013 and 2015.
City and medical system officials told The Sun that the hospital network spent $500,000 to purchase 100,000 copies of Pugh’s books in the years 2011, 2013, 2015, 2017 and 2018.
It was the second time this week the mayor provided new information about her transactions with the medical system. In the disclosure forms that UMMS board members must file with the Maryland Health Services Cost Review Commission, Pugh reported incorrect information.
“UMMS purchased 20,000 ‘Healthy Herbie’ books by a third party and $100,000 was my profit,” stated her 2013 report. Four years later in 2017, Pugh reported the medical system “purchased 20,000 ‘Healthy Holly’ books through a third party and $100,000 was my profit.”
The mayor acknowledged Thursday that those forms contained errors.
“The net profit to my company after illustration, printing and shipping costs amounted to approximately $20,000 in each of the [five] years that the University of Maryland Medical System purchased the books,” she said. “The gross revenue of $100,000 listed as ‘profits’ in my board disclosure was incorrect.”
A review of all board members’ forms filed annually since 2010 with the commission turned up only two for Pugh.
However, Pugh advisor Gregory Tucker said she filed reports each year between 2012 and 2018. He emailed copies of the reports Friday night to the Sun; they could not be immediately verified with commission officials.
The forms Pugh originally filed with the state ethics commission, when she served as a state senator from 2007 until she became mayor in December 2016, show that the former Senate majority leader reported her board membership with the medical system.
Pugh did not, however, make any mention at the time of her Healthy Holly company, nor the deal to sell her books to the medical system. As a state senator serving on the Senate Finance Committee’s health panel, Pugh worked on issues related to the medical center.
Her state financial disclosure forms also state that she owns a company called Catherine E. Pugh & Co., which she formed in 1997 but ended two years later. From 2014 through 2016, her disclosure filings reported the 2 Chic Boutique consignment shop she owns in Pigtown. She formed that company in 2013. Starting that same year, Pugh reported to the state that she was paid for serving on the board of governors for Calvert Education Services.
Pugh has said that UMMS bought her books for distribution to students at city schools and to children at day care centers.
City schools spokeswoman Anne Fullerton confirmed the system received copies of Pugh's work, but Fullerton did not have documentation showing how many copies were handed out or when they were distributed. Spokeswoman Anne Fullerton said she recalls district officials delivering them to city elementary schools several years ago. According to Pugh, the books were given to children in kindergarten through third grade. This year, the district serves about 41,500 children in prekindergarten through fifth grade.
A gift of 20,000 books, Fullerton said, “would be a large donation, certainly.” The school system did not request the books.
Maryland Policy & Politics
The Sun also reported that since Pugh became mayor, she has not disclosed her medical system board position on the city disclosure reports covering 2016 and and 2017. The annual forms submitted to Baltimore’s Board of Ethics require public officials to report relationships they have with entities that do business with the city.
In 2016, the University of Maryland Medical Center and the Midtown Campus were part of a $60 million decade-long agreement the city struck with 14 hospitals to help pay for public safety and other city services. Both facilities are part of UMMS. Most recently, the city’s spending board, which Pugh leads, approved a $100,000 agreement Oct. 24 with the medical system for a violence prevention program and a 10-year deal last May for maintaining hospital signs on city streets.
City Solicitor Andre Davis said Pugh will report the UMMS board seat from now on “regardless of whether there are any further business relationships” with the medical system “in the interest of full transparency and disclosure.”
Tucker said the business transactions with the University of Maryland Medical Center did not require the mayor to disclose her board seat because the hospital is not the same as the medical system which governs it.
The city’s ethics board also requires public officials to report ownership in businesses and “other sources of earned income.”
For 2016 and 2017, Pugh reported ownership in Healthy Holly LLC, 2 Chic Boutique and Catherine E. Pugh & Co. In 2016, she only reported earning income from Calvert Education Services. And in 2017, she reported Healthy Holly LLC as her only other source of other income.
Pugh is not required to report to the city that the income she earned through Healthy Holly company came from its deal with UMMS, ethics officials said.