Three University of Maryland Medical System board members who took leaves of absence during an internal review of their companies’ contracts with the system have accepted the board’s invitation to return.
August J. Chiasera, an executive at M&T Bank; James A. Soltesz, CEO of a civil engineering firm; and Walter A. Tilley Jr., CEO of Home Paramount Pest Control, “all plan to return as full, participating members of the UMMS board,” Michael Schwartzberg, a system spokesman, said Wednesday.
Their colleagues on the board voted to ask them back the same day last week that UMMS released a report by Nygren Consulting, a Santa Barbara, California, firm it hired to review the contracts.
UMMS officials have said all contracts will be vetted and competitively bid going forward, and that board members will recuse themselves from any discussions or decisions pertaining to their contracts.
Former Democratic state Sen. Francis X. Kelly Jr., the one other board member who took a leave of absence amid the review, announced last week that he would decline the board’s invitation to come back.
M&T Bank provides treasury management and deposit services for the system, its foundation, the University of Maryland Medical Center and the Midtown Campus hospital in Baltimore, St. Joseph Medical Center in Towson and other UMMS operations. The bank reported to regulators that its arrangement with UMMS generated $4.4 million in interest income and banking fees for the year ending June 2018.
The Nygren report found that M&T’s work with UMMS went through a “vetting and a competitive selection process.”
Chiasera confirmed his return to the board, saying, “Going forward, I will continue to be focused on supporting the mission of UMMS.”
Neither Tilley nor Soltesz responded to requests for comment.
The Nygren report found that Tilley’s pest control contract with UMMS was “well-vetted” and competitively bid in 2011, but not since then.
The Nygren report found that Soltesz’s contract providing civil engineering services to the system was competitively bid and predated when he joined the board in 2018.
Kelly, whose insurance company had contracts with UMMS, was the longest-serving board member, first joining in 1986 after helping create the private, nonprofit system.
In addition to saying he would not return to the UMMS board, Kelly also said he would resign from the boards of affiliate hospitals, including St. Joseph and the R Adams Cowley Shock Trauma Center, and that his sons would leave positions they held on affiliate boards.
Maryland Policy & Politics
The Nygren report found that contracts UMMS had with Kelly & Associates Insurance Group of Baltimore County — which were worth millions — were not competitively bid in recent years, but that hospital staff had assessed them as being at fair market value.
The four board members took leave in March, after the Sun first reported that nearly a third of the UMMS board members had lucrative contracts with the system. Other board members resigned, including then-Baltimore Mayor Catherine Pugh, a Democrat who received $500,000 from the system for her self-published “Healthy Holly” children’s books.
The system has apologized for poor governance controls and for some of the contracts that it struck with board members. The system also accepted the resignations of longtime CEO Robert Chrencik, four other top executives and board chairman Stephen Burch.
In addition, the state legislature passed a law, signed by Republican Gov. Larry Hogan, that mandates that all UMMS board members step down by the end of the year, to be reappointed or replaced by the governor. Hogan has said he intends to reappoint few, if any, board members, and last week appointed 11 new members to the board.
Some state lawmakers have expressed disapproval of the invitations to board members on leave to return.
But acting UMMS CEO John W. Ashworth III said the board believed, after reading the Nygren report, that Chiasera, Kelly, Soltesz and Tilley were not to blame for any contracting issues.
“It was a systemic problem at the management level,” Ashworth said.