Baltimore Mayor Catherine Pugh will take a leave of absence Monday, engulfed by a scandal over hundreds of thousands of dollars in payments for her self-published “Healthy Holly” children’s books. (Lloyd Fox / Baltimore Sun video)
While she received hundreds of thousands of dollars though a no-bid book deal with the University of Maryland Medical System, then state senator Catherine Pugh sponsored dozens of bills affecting hospitals in Maryland — including several that would have benefited UMMS.
From 2011 to 2016, Pugh — who is now on indefinite leave as Baltimore’s mayor — sponsored or co-sponsored more than 40 bills affecting hospitals, doctors and insurance companies, according to General Assembly records. The Baltimore Democrat did this while serving on the medical system’s Board of Directors, which is now under fire over accusations of self-dealing in part because of Pugh’s $500,000 book deal.
Pugh repeatedly sought — with eight different bills — to make it harder for aggrieved patients to sue hospitals and doctors for big judgments via medical malpractice claims and lessen the financial impact of those suits. Those measures did not win General Assembly approval, nor did legislation she sponsored to expand the kinds of bonuses insurers can pay health care professionals.
The legislature did pass three of Pugh’s bills green-lighting the potentially lucrative expansion of telemedicine in the state.
“It is a clear conflict of interest,” Joanne Antoine, of the government-watchdog organization Common Cause, said of Pugh’s legislative proposals while being paid by the system. “This does call into question all of the decisions she made during her term as senator.”
Pugh made a deal with the medical system in 2011 in which it agreed to buy her self-published “Healthy Holly” books for children, which were to be distributed to the Baltimore school system and daycare centers. UMMS paid her $100,000 for books in each of five transactions in 2012, 2013, 2015, 2017 and 2018.
It's a clear conflict of interest. This does call into question all of the decisions she made during her term as senator.
Joanne Antoine, Common Cause
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Pugh failed to disclose those payments in her yearly General Assembly ethics reports.
The Baltimore Sun reported Monday that the healthcare provider Kaiser Permanente also paid Pugh more than $100,000 to buy about 20,000 copies of her books during a period when the company was seeking a contract to provide health benefits to city employees. Citing health reasons, Pugh later announced she was taking a leave of absence.
Antoine said Pugh’s legislative efforts likely wouldn’t have raised eyebrows at the time in Annapolis, before her “Healthy Holly” book deal was known. Starting in 2007, she was a member of the Senate Finance Committee and in 2013, she became chairwoman of its health subcommittee, which handles legislation affecting health care businesses and consumers.
But now, Pugh’s record as a senator is under new scrutiny because of the books. “She should have never had this relationship with UMMS,” Antoine said
Some of the bills she supported passed the General Assembly by wide margins, while others failed to attract a single co-sponsor.
Neither Pugh, her spokesman or her lawyer responded to requests for comment for this article. In a brief interview last month, the mayor noted her legislative proposals applied generally to the hospital industry, not just the University of Medical System.
“I didn’t carry legislation for UMMS,” Pugh said.
John W. Ashworth, interim CEO of the medical system, declined to discuss the medical system’s book deal with Pugh, but said UMMS works with a number of lawmakers on a range of issues.
“The medical system works with many legislators that would have an impact on what we believe would be good high-quality efficient health care in our state,” Ashworth said in an interview Monday.
The Baltimore Sun reported last month that nine of the UMMS board’s 30 members — including Pugh — had deals with the hospital system benefiting their private companies. The deals were worth from hundreds of thousands to millions of dollars. Apart from Pugh’s deal, UMMS officials have declined to say whether the other contracts with board members were put up for bid.
The revelations sparked an outcry in Annapolis and across the state.
As a result, three board members, including Pugh, resigned and four more were placed on leave. System CEO Robert A. Chrencik— who is paid $4.2 million annually in compensation approved by the board — also was placed on leave.
Emergency legislation is now making its way through the General Assembly that would bar no-bid contracts for the hospital network’s board members, force all members to resign and reapply for their positions, and mandate an audit of contracting practices.
Pugh’s effort to lessen the impact of medical malpractice suits on hospitals and doctors spanned several legislative sessions. She twice introduced a failed proposal to create a “No Fault Birth Injury Fund” that would have a provided payments to families whose children die in child birth as a way to avoid multi-million-dollar lawsuits. She unsuccessfully sought legislation to require plaintiffs to notify hospitals of their intent to sue as a way to encourage settlements rather than costly jury verdicts. And she failed to win legislation to expand the number of health care providers covered under a state cap on non-economic damages from malpractice suits.
Former Sen. Francis X. Kelly, who sat with Pugh on the UMMS board before she resigned and he took a leave of absence, grew his insurance brokerage company through his work with the medical system after he led the legislative charge to privatize the hospital network.
A spokeswoman for the Kelly Insurance group said Kelly never worked with the mayor on legislation.
“Senator Kelly did not discuss insurance or UMMS-related legislation with then-Senator Pugh,” said Jen Silberzahn, a senior vice president with the company. “To the best of his memory he never discussed any legislation with her.”
Fred Guy, director of the University of Baltimore's Hoffberger Center for Professional Ethics, said Pugh should have recused herself from working on hospital issues since she was receiving pay from the medical system for her books.
“Someone in public office should be extremely careful and extremely diligent in avoiding conflicts of interest,” Guy said.
The University of Maryland Medical System was created in 1984 when the state-owned University Hospital was privatized into a nonprofit organization.
It continues to receive millions in taxpayer money, including $50 million over five years for the recent expansion of the University of Maryland Medical Center.
A review of Board of Estimates records also shows that since becoming mayor, Pugh has not always recused herself from votes concerning the hospital network.
Parts of the medical system have had business come before Baltimore’s spending board at least five times since Pugh took office, according to the board’s minutes.
As mayor, Pugh controls the five-member board, which approves grants, contracts and other deals with third parties. The individual votes of board members are not recorded, but the minutes show Pugh abstained on the three of the matters.
A spokesman for Pugh did not respond to questions about the votes.
In March 2017, the board voted to approve a $20,000 deal between the city health department and the University of Maryland Medical Center to provide “tobacco use prevention services.” That October, the board approved the police department passing $100,000 in federal grant funds to Shock Trauma for a violence prevention program. In neither case did the mayor abstain.
In April 2018, Pugh abstained from voting on a deal in which the University of Maryland Medical Center would give $668,200 to the fire department to fund a program to pair up nurses and paramedics. The next month, she abstained on another vote related to the program. And in June 2018, Pugh abstained when the board was asked to approve the sale of city property for use by UMMC.
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Meanwhile, the book deal isn’t the only way the University of Maryland Medical System has supported Pugh.
Board members and senior executives with the medical system and its flagship medical center have donated or loaned nearly $292,000 to Pugh’s Senate and mayor campaign committees since 2005, according to state campaign finance filings.
At a City Hall news conference, the mayor apologized Thursday for upsetting the people of Baltimore with her book deal. She also said that 20,000 books — for which UMMS paid her $100,000 in 2017 — were “delayed” and are only now being shipped. She said she had no contract with the hospital network and was under no deadline to complete the work.
She has returned $100,000 for a fifth order of the books.
“In hindsight, this arrangement with the University of Maryland Medical System was a regrettable mistake,” Pugh said.