The mayor’s leave comes as Baltimore has been convulsing under a surge of violence that officials, including Pugh, have struggled to address. Homicides have topped 300 for four straight years, even as homicide arrest rates have plummeted, and there have been five police commissioners in as many years.
The Baltimore Sun reported Monday that Kaiser Permanente paid Pugh more than $100,000 for copies of her self-published “Healthy Holly” children’s book at the same time it was seeking a $48 million contract from a city board controlled by the mayor.
That prompted Maryland Comptroller Peter Franchot (D) to call on Pugh to resign. “The people of Baltimore are facing too many serious challenges, as it is, to also to deal with such brazen, cartoonish corruption from their chief executive,” Franchot wrote on Facebook, with a link to the Sun’s story on the contract with Kaiser Permanente.
The Kaiser Permanente deal comes on top of reporting by the Sun two weeks ago that Pugh was paid $500,000 by the University of Maryland Medical System for her “Healthy Holly” books beginning in 2011, when she was a state senator who served on a committee that partially funded the hospital network.
Gov. Larry Hogan (R) on Monday called for an investigation into the UMMS deal by the state prosecutor.
Bentley said Monday that Pugh’s health made her feel unable to fulfill her obligations as mayor.
“To that end, Mayor Pugh will be taking an indefinite leave of absence to recuperate from this serious illness,” he said.
The acting mayor will be Baltimore City Council President Bernard C. “Jack” Young (D), a Baltimore native who 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. Young called the scandal “traumatizing” for the city and said that he looked forward “to serving as a stabilizing force.”
Pugh, 69, is the second Baltimore mayor in the past decade to navigate a corruption scandal; Democrat Sheila Dixon resigned from office in 2010 after being convicted of embezzlement. Pugh narrowly defeated Dixon in the Democratic primary in 2016.
“It’s a tragedy, and it’s a catastrophe at the same time,” said council member Mary Pat Clarke. “This is a catastrophe for us all, just when we’re getting our feet on the ground with our new police commissioner and our new start on rebuilding our city.”
Kaiser paid $114,000, from 2015 until 2018, to Pugh’s Healthy Holly LLC for 20,000 copies of her books, which are intended to promote exercise and healthy eating among children, according to the Baltimore Sun.
Kaiser won a $48 million contract from the city’s spending board, which Pugh controls, in 2017.
Kaiser spokesman Scott Lusk said the company’s purchase of the Healthy Holly series came nearly 30 years after the company was selected as one of the health-plan providers for city employees and “has no connection with our commitment to continue offering our care to Baltimore City government employees.”
Lusk said that “in light of the issues that have been raised, Kaiser Permanente is reviewing the process through which books are selected and procured.”
Pugh sat on the board of the medical system for 18 years until she resigned from that position two weeks ago, after the Sun reported her book deal. Under the no-bid deal, the medical system bought 100,000 books at $5 each, according to the Sun. Pugh did not report the earnings on required financial disclosure forms. She amended the forms after the deal was revealed.
Hogan, who has been sharply critical of deals between various UMMS board members and the hospital system, said Monday that he finds the allegations against Pugh “deeply disturbing” and is particularly concerned because the private hospital system receives public funding.
In his letter to State Prosecutor Emmet C. Davitt, Hogan said all Marylanders should have confidence that public officials follow the “highest legal and ethical standards.” Hogan said he wants to ensure that “these types of problems do not ever reoccur.”
The state prosecutor’s office would neither confirm nor deny the existence of investigations.
Bentley referred questions about “Healthy Holly” contracts to the mayor’s personal attorney, Steve Silverman, who did not respond to requests for comment.
Pugh called the deals with UMMS a “regrettable mistake” at a news conference last week. She returned $100,000 for books that were not produced.
The mayor, who choked up at the news conference, said she never wanted to lose the trust of Baltimore residents or hurt the reputation of the University of Maryland Medical System. She told reporters that she was speaking to them “against my doctor’s orders.”
She is among seven board members with business dealing with the system, in some cases worth millions of dollars, who have resigned or taken a leave of absence. UMMS president and chief executive Robert A. Chrencik, who has led the system since 2008, was placed on leave last month.
Interim chief executive John Ashworth said Monday the system has hired Nygren Consulting, a California-based firm, to review board members’ contracts and implement industry best practices.
Monday marked a shift in the scandal, with Pugh for the first time facing rebukes from a range of political leaders.
Council member Zeke Cohen said Pugh should step down.
“I believe that Mayor Pugh has lost her moral mandate to govern and should therefore resign,” he said.
Cohen said Baltimore can move past the scandal. “Baltimore is not broken,” he said. “We know that our city continues to take hits, but we are resilient, and we will bounce back.”
State Sen. Bill Ferguson (D-Baltimore City) stopped short of calling for Pugh’s resignation but said it was difficult to see a path for redemption.
“I hope that the mayor is doing some very deep soul searching today,” Ferguson said. “The drip drop of information continues to get worse, and I know this is such an unbelievable distraction of the very real issues that Baltimore City faces.”
He said other companies that have engaged in private business with the mayor while she has held public office need to disclose it immediately.
“It’s time for real accountability,” he said.
John Willis, a Democratic strategist who has lived in the city for decades, said residents have weathered so many scandals that the “Healthy Holly” chapter feels like a familiar pay-to-play scenario.
“It’s more disappointment, not shock,” Willis said. “It’s more like, ‘Ugh, here we go again.’ ”