Mayor Catherine Pugh’s most recent $100,000 children’s book contract with the University of Maryland Medical System (UMMS)—a deal made in 2018—has been cancelled and she has returned the money amid a deepening ethics scandal, according to spokesmen for the mayor and the UMMS.
The most recent 2018 UMMS contract for 20,000 more copies from the mayor’s Healthy Holly children’s series had yet been fulfilled because the book’s illustrator had been ill, Pugh spokesman James Bentley told Baltimore magazine.
A member of the UMMS board since 2001 before her recent resignation, Pugh entered into five children’s book contracts with the hospital network since 2011, totaling $500,000. Those contracts were each for a purchase of 20,000 of her self-published Healthy Holly children’s books at a cost of $100,000—in which Pugh netted $20,000 in profit from each deal.
When asked if the mayor has considered returning any or all of the $400,000 from the previous four contracts—or her $80,000 in profits—Bentley said he did not know. UMMS spokesman Michael Schwartzberg declined to answer a question regarding whether there have been discussions between the UMMS board and Pugh about returning money from previous contracts.
Baltimore City state Sen. Bill Ferguson, a Democrat considered a potential mayor challenger in 2020, has called on Pugh to return the money she’s received back to medical system. Baltimore City state Del. Brooke Leirman called the debacle “appalling” in a tweet. “It just keeps getting worse . . . I can’t even decide what the worst part is,” Lierman wrote.
Tuesday, The Sun reported Pugh—through her book company, Healthy Holly LLC—has made $7,040 in state political contributions since 2015, including a $5,000 contribution to her own campaign. Baltimore County Executive Johnny Olszewski’s campaign, which received $1,000, said they planned return the money. Baltimore City state Sen. Jill Carter, who introduced legislation making it illegal for board members to profit from contracts with the hospitals they govern, is looking to donate the money to charity.
Asked Wednesday if she would release her tax returns, or tax documents for her company, Pugh told The Sun she would not “because I did everything right.” She referred to the inquires a “witch hunt.” Pugh did not attend the weekly Board of Estimates meeting at City Hall on Wednesday, nor did she hold her usual post BOE press availability.
Anne Fullerton, spokeswoman for the Baltimore City Public School System, said BCPSS received a shipment of Pugh’s children’s books between 2011 and 2013. Documentation for that shipment hasn’t been located, however. Fullerton told Baltimore that the books had not been sought by the school system, nor were they used as part of any curriculum. She could not say how many books the school system received, but said roughly 8,700 currently sit in a school warehouse and that there were no immediate plans to distribute those books.
In the meantime, Pugh’s top communications consultant said he would not renew his contract with the mayor when it expires at the end of the month.
In an emailed statement to Baltimore, attorney Stephen Burch, chairman of the board of the University of Maryland Medical System, said he takes “very seriously the concerns raised regarding Board members that have business relationships with UMMS.”
Burch said along with accepting Pugh’s resignation, he has accepted the resignations of UMMS board members John Dillon and Robert Pevenstein. The Sun broke the story last week that nine members of UMMS board have business deals with the hospital network, which they oversee. Dillon reported his health care consulting firm received $300,000 from 2017 and 2018 contracts. Pevenstein reported that his technology firms received more than $150,000 through UMMS contracts in 2017. He reported his son made more than $100,000 from UMMS in 2018. In 2014, according to The Sun’s reporting, UMMS provided $25,000 to the Gov. Larry Hogan and Lt. Gov. Boyd Rutherford’s inaugural committee.
Burch also said he has requested three board members—August Chiasera, Francis X. Kelly, James Soltesz and Walter Tilley, Jr.—to take an immediate voluntary leave of absence while the UMMS board reviews their governance and transparency practices.
M&T Bank executive August Chiasera has reported $7.4 million in revenue for the bank from UMMS contracts over the past two years. Former state Sen. Francis X. Kelley’s insurance company has reported $4.4 million in revenue from UMMS revenue over the past two years.