House of Delegates Speaker Michael Busch introduced an amendment Wednesday to legislation to reform the embattled University of Maryland Medical System board of directors by forcing all board members to resign by June.
With the hospital network reeling from accusations of self-dealing and no-bid contracts for some board members, the chief of staff for the Anne Arundel Democrat said Busch sought to give the board a clean start.
“The speaker believes there are good and valuable board members who have served the University of Maryland Medical System honorably,” said Alexandra M. Hughes, Busch’s chief of staff. “However, to ensure maximum public confidence in oversight of the system, he felt this was best next step: to reconstitute the board and allow existing members to reapply.”
Busch and Sen. Jill P. Carter, a Baltimore Democrat, have legislation pending in the General Assembly that would bar board members from abusing their “prestige of office” after The Baltimore Sun reported this month that nine of 30 board members — including Baltimore Mayor Catherine Pugh — had deals worth hundreds of thousands to millions of dollars benefiting their private companies with the hospital system they were tasked with overseeing.
The revelation sparked an outcry from across the political spectrum in Annapolis.
Carter called Busch’s amendment — which would end the terms of board members in June and require any members who sought to return to apply to Gov. Larry Hogan for reappointment — a “step in the right direction.”
“Some of the board members have been on there for 18 years,” Carter said.
Pugh, for instance, had served on the board since 2001 before she resigned last week.
Since then, two other board members resigned and four more were placed on leave. System CEO Robert A. Chrencik — who is paid $4.2 million annually — also was placed on leave.
Pugh resigned amid scrutiny over her deal to sell 100,000 copies of her self-published “Healthy Holly” children’s book series to the medical system from 2011 to 2018 for $500,000.
Pugh has said the books were distributed to schools and day care programs. Baltimore school system officials have said 8,700 of those books are in a warehouse. Neither the medical system nor Pugh has accounted for the whereabouts of tens of thousands of the books.
Pugh also amended seven years of ethics forms she filed while she was in the state Senate that did not disclose her Healthy Holly LLC, through which she sold the books. And Pugh said she was returning the final $100,000 payment she received from the medical system.
Hospital system board members have voted to submit to an outside, independent review of the system’s contracting practices.
The fast-tracked legislation from Busch — who has a seat on the board under state law — also would require an independent audit of financial management at the medical system by Dec. 31. It would require the governor’s appointees to the board to submit to vetting by the state Senate. And it would prohibit the practice of awarding no-bid contracts to board members. Board members would have to file financial disclosure forms that would be turned over to the leadership of the House of Delegates, the state Senate and the governor.
Hughes told the House of Delegates Health and Government Operations Committee Wednesday that the bill aims to prevent “members of the board using their positions on the board in order to get contracts with the system that didn’t go through some sort of competitive bid process.”
While the amendment said board members would need to step down by June, Hughes said it could be further altered to stagger the resignations throughout 2019 in order to keep the board functioning.
Del. Kathy Szeliga, a Baltimore County Republican, said she thinks the bill strikes the right balance of preventing no-bid contracting while not prohibiting individuals who work in the hospital network from serving on the board.
“Every single member of this board wasn’t engaged in unethical behavior,” Szeliga said.
Del. Shane Pendergrass, the Howard County Democrat who is chairwoman of the committee, said the committee would vote on the legislation later in the week.
“This is a big bill and I want us to get it right,” she said.
A spokeswoman for the medical system said officials there will continue to monitor the legislation closely.
The medical system initially opposed Carter’s version of the bill, which would make any contract between board members and UMMS illegal. Hospital system officials argued the inability to make such deals would hobble their ability to recruit quality board members from the business community.
However, as more information about the board’s practices were revealed, officials have come to support the emergency legislation introduced in the House.
Carter said she believes the Senate will adopt even “tighter” provisions for procurement with board members.