Investigators from the FBI and IRS fanned out to at least a half-dozen locations Thursday, including a nonprofit tied to Pugh and the apartment of a former top Pugh aide. They also retrieved records from the office of Pugh’s attorney.
The University of Maryland Medical System confirmed receipt of a grand jury subpoena from Maryland’s U.S. attorney seeking documents and other information “to conduct their investigation of Mayor Pugh,” according to a spokesman for the medical system that paid for Pugh’s books while she was a board member.
The early morning arrival of federal agents from the FBI’s Baltimore field office and the IRS’s criminal investigative division from Washington was the first public signal of federal law enforcement interest. As agents were still working, Hogan for the first time called on Pugh to step down, saying she “has lost the public trust. She is clearly not fit to lead.”
The book deal revelations, reported by the Baltimore Sun, earlier led to calls for Pugh’s resignation from the Baltimore City Council and state lawmakers. They also led to an investigation by the state prosecutor and the termination of several of her aides.
State investigators are also scrutinizing Pugh’s deals with entities including health-care company Kaiser Permanente, which was awarded city contracts, and the University of Maryland Medical System, on whose board she sat for many years.
Pugh was at home Thursday when the search of her house began, her attorney said, but the mayor did not appear publicly. She previously described criticism of her book deals as a “witch hunt” and later called her agreement with the hospital system a “regrettable mistake.”
Her attorney, Steven D. Silverman, met with Pugh on Thursday and said the illness that sidelined her in late March continues and has been compounded by the stress of the investigation.
“The calls for her to resign have not fallen on deaf ears. The people of the city come first,” Silverman said. “In the near future, she will make a decision that is in the best interests of Baltimore.”
But, Silverman said, because of her current condition, “she is not completely lucid. For her to make these kinds of decisions at this time is not fair to her.”
Pugh, 69, is the second Baltimore mayor in the past decade whose tenure has been engulfed in a corruption scandal. Her troubles coincide with a surge in violence in the city that officials, including Pugh, have struggled to address. Homicides have surpassed 300 for four straight years, even as homicide arrest rates have plummeted, and there have been five police commissioners in as many years.
“Now more than ever, Baltimore City needs strong and responsible leadership,” Hogan said in his statement calling for Pugh’s resignation.
The heightened law enforcement attention increased pressure on Pugh politically and legally, and added to a sense among Baltimore residents that the city had reached a tipping point. Officials described the latest action as a demoralizing distraction from urgent issues.
“This is something we just don’t need,” said state Sen. Jill P. Carter (D-Baltimore City). “There are so many entrenched problems we have to tackle.”
State Sen. Bill Ferguson (D-Baltimore City) called the searches a “breaking point” for Pugh’s tenure. “We can’t keep going like this,” he said. “This feels like an ultimate low.”
The development, Ferguson added, is “heartbreaking, infuriating and deflating” for Baltimore residents, and the imagery “makes it almost impossible to highlight the incredible people who live here when this is the reality of the news that leads.”
Just after 7 a.m. Thursday, more than a half-dozen federal agents entered City Hall. Several agents wearing jackets with FBI and IRS insignia emerged a few minutes later to retrieve empty boxes and black suitcases that appeared to contain forensic equipment.
Baltimore City Solicitor Andre M. Davis said in an interview that the search had been limited to Pugh’s second-floor executive suite. He received an inventory of items agents seized, but he declined to discuss details or make the list public, saying doing so could impede the investigation.
City Council President Bernard C. “Jack” Young (D), who is serving as acting mayor in Pugh’s absence, “had no advance knowledge of the search,” his spokesman Lester Davis said.
Young left City Hall about 11 a.m. and took no questions from reporters before climbing into an SUV. “I’m not ducking anybody. I’m just letting you know I was unaware, and I’m keeping the city moving forward.”
At Pugh’s two-story, white clapboard house, agents left carrying cardboard boxes labeled with the title of one of her Healthy Holly illustrated paperbacks for children.
“I wanna see her handcuffed!” neighbor Jeffrey Davis hollered as he walked past the mayor’s house during the search. “You break the law, you go to jail,” Davis said. “Ask Sheila Dixon,” he added in reference to the Baltimore mayor who resigned in 2010 after an embezzlement conviction.
Davis, the neighbor, said that despite yet another scandal rocking the city, Baltimore will stay strong.
Agents also searched a second Pugh residence around the corner on Dennlyn Road, according to Dave Fitz, the FBI spokesman.
Silverman, Pugh’s attorney, said agents arrived at his downtown Baltimore office Thursday to collect financial documents that federal officials had subpoenaed. Silverman said that in representing Pugh, his office requested records from the mayor’s accountant related to the book series, and that he had set those records aside at the request of law enforcement.
Agents did not search his office or take materials protected by attorney-client privilege, he said.
“I have no indication that the investigation is into anything other than Healthy Holly,” Silverman said. “We will continue to vigorously defend the mayor, who is entitled to the presumption of innocence.”
Agents were also searching the home of a former top aide to Pugh, Gary Brown Jr.
Brown, a legislative aide to Pugh when she was a state senator, was set to be sworn into the House of Delegates in January 2017 to fill a vacancy triggered by Pugh’s election as mayor. But his swearing-in was called off after the state prosecutor’s office charged him with violating campaign finance laws by making illegal donations to Pugh’s mayoral bid. Brown pleaded guilty to the charge.
Brown until recently continued to work for Pugh. He is no longer employed by the city, according to the spokesman for the acting mayor.
Brown and Pugh have ties to the nonprofit Maryland Center for Adult Training, according to information on the organization’s publicly available tax forms. Brown is listed in a tax filing for the fiscal year that ended in June 2017 as executive director. Pugh previously led the center’s board of directors, records for the fiscal year that ended in June 2012 show.
The organization, which agents also searched Thursday, reported that its workforce training program “assists disadvantaged persons transitioning from unemployment to careers.” The center has received city contracts during Pugh’s tenure, the Baltimore Sun has reported.
Brown did not immediately respond to messages seeking comment. No one answered the phone at the training center Thursday.
A spokeswoman for Maryland’s U.S. attorney declined to comment.
The Sun reported that Pugh was paid $500,000 by the University of Maryland Medical System for the books beginning in 2011, when she served on a state Senate committee that partially funded the private system. Two weeks later, the Sun reported that Kaiser had paid Pugh more than $100,000 for her self-published book at the same time it was seeking a $48 million contract from a city board controlled by the mayor.
Pugh resigned from the medical system board, on which she had sat for 18 years, and returned $100,000 for a shipment of books she said was not completed.
UMMS spokesman Michael Schwartzberg said in a statement Thursday that the medical system is “fully cooperating with the investigative process.”
Pugh was hospitalized with pneumonia for five days in late March and took an indefinite paid leave April 1 to recuperate.
Young has removed several of Pugh’s aides, including Brown, in the weeks since she began her leave. A Baltimore native, Young has been a fixture of city politics for more than two decades. He has served on the council for 22 years, the last nine as its president.
Rachel Chason contributed to this report.