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The Maryland Senate on Thursday unanimously approved legislation outlawing self-dealing on the University of Maryland Medical System's board of directors. The medical system's offices are shown in this photo Wednesday in Baltimore.
The Maryland Senate on Thursday unanimously approved legislation outlawing self-dealing on the University of Maryland Medical System's board of directors. The medical system's offices are shown in this photo Wednesday in Baltimore. (Jerry Jackson / The Baltimore Sun)

The Maryland Senate unanimously approved legislation to reform the University of Maryland Medical System's board of directors Thursday, a day after the House of Delegates passed a similar measure.

Lawmakers need to work out some differences between the bills before sending the legislation to Republican Gov. Larry Hogan, who has expressed strong support for UMMS reforms.

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The legislation would become effective immediately upon receiving Hogan’s signature.

It would remove all UMMS board members by ending their terms by the end of the year, and require them to apply for reappointment if they want to return.

The bill also would prohibit board members from holding no-bid contracts with the system. And it would require that financial disclosure forms board members file with Maryland regulators also be sent each year to the governor, Senate president and the speaker of the House of Delegates.

Columbia businessman JP Grant said his company cut a check to then-Baltimore Mayoral nominee Catherine Pugh's book company for $100,000 in October 2016.

Sen. Jill Carter, a Baltimore Democrat who sponsored the bill, said she initially proposed it out of concern that minority businesses didn’t have fair access to contracts with the medical system.

But the legislation took on urgency after The Baltimore Sun reported that a third of the medical system’s 30 board members held lucrative contracts with UMMS. The system CEO has said that some of the contracts, including one with Democratic Mayor Catherine Pugh of Baltimore, were awarded without a bidding process.

Pugh took a leave of absence as mayor Monday, citing her health. The Maryland State Prosecutor and the city’s ethics board are investigating her sales of children’s books she wrote to UMMS and other entities who paid her hundreds of thousands of dollars.

“We are enduring a very, very difficult and unusual time, but this is a real opportunity and a rallying cry for us to bring communities and civic leaders together and make sure that government is realizing the best interest of the people,” Carter said on the Senate floor.

The acting CEO of the University of Maryland Medical System said Tuesday former state Sen. Francis X. Kelly and two of his sons are taking voluntary leaves of absence from the boards of six affiliated organizations amid a continuing controversy at the hospital network.

Lawmakers have until midnight Monday, when their annual legislative session adjourns, to work out the differences between House and Senate versions of the UMMS reform bills.

Senators added a requirement that board members’ financial disclosure forms would have to be published online, and that new members file such forms within 60 days of their appointments. The Senate bill also calls for board members to be removed if the governor finds that he or she willfully filed false information on the forms.

Before the Senate vote, Senate President Thomas V. Mike Miller, a Democrat, and Sen. Andrew Serafini, a Washington County Republican, said they recognized the medical system provides an important service to Marylanders. It receives public funding and provides health care in the city of Baltimore and 13 counties.

“I support this bill fully and I appreciate what it’s doing, but let’s just keep in mind the rank and file people there, the nurses and the doctors that do great work, it’s sad for them,” Serafini said. “My life was made better by the doctors and care I received there.”

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.

Miller said the hospital system “has done an awful lot of good for the people of Maryland.” He said lawmakers would not change its structure, but wanted to ensure patients could have confidence in it.

Senators also emphasized that the no-bid contracts and other business relationships uncovered involving the UMMS board are likely not limited to that institution. Miller said the scandal creates a chance “for all nonprofit boards to look at themselves.”

Carter suggested similar legislation could be necessary in the future to reform other entities.

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“I think we need to take a look at other entities, both in the private sector, the nonprofit sector, and even government, and ensure we have transparency,” she said. “When we see self-dealing and greed as we have seen, we know that does foreclose opportunities for people in Baltimore.”

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