What's next for Catherine Pugh and Baltimore as she steps down as mayor and turns to face corruption probes

Catherine Pugh has represented West Baltimore as an elected official for nearly two decades: first on the City Council, then in the General Assembly and, until her resignation Thursday, as Baltimore’s 50th mayor.

So what’s next for the 69-year-old Democrat as she trades in the daily pressures of running a city for the lingering anxiety of enduring investigations into her business dealings?

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Given her continued struggles since announcing April 1 that she was taking a leave of absence to recover from pneumonia, many observers hope Pugh focuses on improving her health before marshaling her energy for a potential legal fight that could imperil her state pension of at least $13,400 per year. Thursday was Pugh’s last day on the city payroll.

At the same time, City Hall will face a political reshuffling certain to upend the elected landscape voters established slightly more than two years ago.

Joan Carter Conway, Pugh’s friend and a former state senator, said Pugh’s resignation was in the “best interest of the city and for her physical, psychological and emotional health.”

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“Most people are majorly concerned about her health,” Conway said. “Of course, we’re concerned about the other issues that are impacting Baltimore City. But her health comes first.”

Former Mayor Sheila Dixon said what’s paramount is how the city’s remaining elected officials carry out changes in leadership.

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Steve Silverman, attorney for Mayor Catherine Pugh, speaks to the media following a meeting at her home. (Karl Merton Ferron)

“There’s a lot of moving parts,” said Dixon, who resigned as mayor in 2010 amid a corruption probe.

Mayor Bernard C. “Jack” Young Jr. will have to adjust to the permanent job through next year’s election. City Council members might jockey to determine who will replace Young as council president for the rest of this term, and whom to appoint to fill the council seat of that elevated member.

“Are they going to be transparent about that process?” Dixon said.

At this point, she added, city voters deserve to know precisely what is happening.

“In the meantime, Bernard is capable of keeping things moving,” Dixon said.

As the palace intrigue unfolds, Pugh will have to turn her attention quickly from her health to her legal problems, Conway said.

Agents from the FBI and IRS fanned out last week across Baltimore to search Pugh’s home, City Hall and other locations related to her business dealings while in office as a state senator and mayor.

“I don’t think that’ll be wrapped up shortly based on federal involvement and IRS issues,” Conway added. “I don’t think they will be resolved quickly.”

James Cabezas, a retired public corruption investigator for the Maryland State Prosecutor’s Office, agreed.

“Based on my 30 years of experience I feel certain that her resignation will not stop the current investigations,” said Cabezas, who led the investigation of Dixon.

Gov. Larry Hogan asked the state prosecutor’s office to investigate Pugh’s sale of books to the University of Maryland Medical System while she sat on the health network’s board of directors. She resigned from the board along with two other members after The Baltimore Sun reported on inside contracts they held with the system.

Pugh did not disclose her board seat while she was mayor even as the city awarded contracts to UMMS and its flagship hospital. Ethics rules require elected officials to report such positions with entities that conduct business with the city.

She also did not report sitting on the board of the Maryland Center for Adult Training, a nonprofit that got a contract from Baltimore’s Board of Estimates, which is controlled by the mayor. The job-training center and the home of one of its board members were among the sites raided by federal agents last week. It received more than $150,000 in federal, state and city funds in the past several years.

The city’s Board of Ethics announced that it was investigating Pugh’s failure to disclose business dealings. But experts said the ethics board’s review might not continue after Pugh resigns because it has jurisdiction to pass judgment only on the actions of public officials.

One of the biggest risks Pugh faces is the impact investigations could have on her state government pension.

Pugh, who served one four-year term as a city councilwoman and slightly more than two years as mayor, does not qualify for a city government pension that requires 12 years of service. As mayor she earned a salary of $185,000. Any money she has paid into the city pension plan will be returned to her with interest, city officials said.

But she does receive a state government pension of $1,123 a month from her 11 years serving as a state delegate and senator from 2005 to 2016. Any funds Pugh contributed to her retirement likely make that figure much larger. The state cannot disclose how much Pugh contributed. State legislators become vested in the pension system after eight years in their jobs.

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State regulations say that if she is convicted of a felony committed during her time in the General Assembly, she would lose her state pension. If she is convicted of a misdemeanor that is related to her duties as a state lawmaker, she also could have to give up her pension, according to the pension handbook for legislators.

Dixon in 2010 was able to keep her $83,000-a-year pension as part of a deal to resign from the mayor’s office after she was convicted of embezzlement and pleaded guilty to perjury.

In March, Cabezas filed a complaint against Pugh with the state prosecutor’s office about her failure to disclose her UMMS book sales on her General Assembly ethics forms while serving as a state senator. Pugh amended her forms after The Sun reported on the sales. Cabezas said in the complaint that omitting information on mandatory disclosure forms can result in perjury charges, if prosecutors can show that the official knowingly omitted information.

“[Pugh’s] political life is finished in the city,” Cabezas said. “But who knows?”

Dixon restarted her political career when she ran for mayor in 2016 but lost the Democratic primary to Pugh. She has not said whether she intends to run in next year’s election. Pugh’s term ends in December 2020 and will be completed by Young, who has said he would like to return to being City Council president after that.

“To move forward, folks need to rally around Mayor Young,” said Keiffer Mitchell, a senior adviser to Hogan and a former city councilman. “The city has suffered too many black eyes for the past few months. Now we have to help Jack to move the city forward.”

Baltimore Sun reporter Yvonne Wenger contributed to this article.