Legislation Overhauls Maryland Medical Network's Board - WBOC-TV 16, Delmarvas News Leader, FOX 21 -

Legislation Overhauls Maryland Medical Network's Board

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Baltimore's elected mayor, Catherine Pugh, is the public face of the University of Maryland Medical System's "self-dealing" scandal. (Photo: AP) Baltimore's elected mayor, Catherine Pugh, is the public face of the University of Maryland Medical System's "self-dealing" scandal. (Photo: AP)

BALTIMORE (AP)- Maryland's governor signed fast-tracked legislation on Thursday to overhaul a major medical network's board of directors following revelations of numerous questionable financial arrangements.           

Baltimore's elected mayor, Catherine Pugh, is the public face of the University of Maryland Medical System's "self-dealing" scandal. She joined the volunteer board in 2001 and beginning in 2011, somehow sold $500,000 worth of her obscure self-published children's books to the $4 billion hospital network. Before she became mayor in 2016, Pugh sponsored and co-sponsored several bills as an influential state senator that would've benefited the regional system.           

But Baltimore's No. 1 official was hardly the only member with lucrative relationships with UMMS: She was among a third of the more than two dozen board members who received significant compensation through the network's murky arrangements with their businesses, ranging from pest control to insurance and management consultation.           

Gov. Larry Hogan said the emergency legislation he signed will bring "much-needed reforms and transparency" to a board that oversees one of the state's largest private employers, with roughly 25,000 workers and 4,000 affiliated physicians.           

"There cannot even be the appearance of impropriety from those connected with the hospital system, especially in positions of such importance," Hogan said.           

The new law bars board members from getting contracts without a bidding process. It prohibits board members from leveraging their position on the board for personal gain, and board members must attest to any business relationship with the medical system. It requires an audit of contracting practices, and each board member will be required to annually submit a financial disclosure report. It scraps a rule mandating a certain number of voting board members to be members of the General Assembly.           

The legislation also forces all the remaining board members to step down and reapply for their positions, if they want to return. The governor will appoint voting members of the board, and the state's senate would have to confirm them.           

The Republican governor described the law as a "good first step," but he said more needed to be done.           

"I remain committed to holding UMMS leaders accountable, and I will appoint board members who will serve with integrity and transparency," Hogan said.           

John Ashworth, the interim leader of UMMS, said he's committed to implementing the various reforms during his tenure.           

"UMMS will activate the work outlined in the bill. There is clearly mutual alignment among all interested parties to optimal, long-term governance and accountability," said Ashworth. He became acting leader late last month after UMMS CEO Robert Chrencik was asked to take a leave of absence.           

Pugh went on her leave of absence from City Hall on April 1, the same day Hogan asked the state prosecutor to investigate her "Healthy Holly" book deals, including the $500,000 in bulk sales to the UMMS. There was no contract backing the book deal, and the hospital network described some of the purchases as "grants" in federal filings.           

Last month, Pugh resigned from the UMMS board and returned the most recent $100,000 she received from the medical system, citing the book arrangement as a well-intentioned but "regrettable mistake." Customers for her children's books also included health carriers doing business with Baltimore.           

Pugh cited deteriorating health from a pneumonia bout as the reason for her indefinite leave, and her spokespeople say she fully intends to return to City Hall once she feels stronger. It's not clear how long the criminal investigation into her actions will take.

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