The independent state agency that regulates Maryland’s insurance industry announced Friday that it is conducting a review of insurers that gave money to Baltimore Mayor Catherine E. Pugh’s “Healthy Holly” children’s book company.
Pugh, a Democrat, is facing accusations of self-dealing, calls for her resignation and an investigation by the state prosector after revelations that she received nearly $800,000 for her books from groups with ties to state and local government.
The Baltimore Sun reported that Kaiser Permanente paid Pugh more than $100,000 for copies of “Healthy Holly” at the same time it was seeking a $48 million contract from a city board controlled by the mayor; CareFirst Blue Cross Blue Shield said it donated $14,500 to Associated Black Charities to buy 2,000 books; the Maryland Automobile Insurance Fund gave a $7,500 donation when Pugh was a state lawmaker sponsoring legislation it favored.
The Maryland Insurance Administration said in a statement it had expanded its initial review from those three insurers and will not be releasing further information until the inquiry concludes.
Mark McCurdy, the director of the Maryland Automobile Insurance Funding, said the quasi-public company “is comfortable” with the review and has forwarded the agency its related documents.
McCurdy said the donation was “inconsistent with what we’ve been doing here since 2015,” when he became the director.
“I don’t know what motivated it,” he said, adding that the company, to his knowledge, has never distributed books.
CareFirst spokesman Michael Sullivan said the company is aware of the agency’s review and will cooperate fully.
Kaiser did not respond to requests for comment Friday.
Kaiser spokesman Scott Lusk said previously that Kaiser’s relationship with Baltimore long predates its contract with Pugh and that the company is reviewing the process through which the books were selected and procured.
The Maryland Insurance Administration also said that it is “cooperating with other investigations being done by the state and city related to the University of Maryland Medical System board transactions.”
UMMS paid Pugh $500,000 for Healthy Holly books, beginning in 2011, when she was a state senator.
She was one of nine board members with lucrative contracts with the system they oversaw. Those board members, including Pugh, have either resigned or taken leave since the Sun’s report.
UMMS is a private, nonprofit organization that operates a network of 13 hospitals and is one of the largest employers in the state. It has received nearly $25 million in public funds in the past two years.
Former state senator Francis X. Kelly Jr. disclosed that his insurance company made $2.8 million in deals with the hospital system last year and more than $1.6 million in 2017. He had already taken a leave from the UMMS board.
Kelly, who served in the Senate from 1979 to 1990, and his sons took leave from all hospital boards affiliated with UMMS this week.
The Maryland General Assembly advanced legislation this week that would dissolve the UMMS board in stages, bar elected officials from serving on the board, require stringent financial disclosures and prohibit members from making single-source contracts with the system.
Baltimore’s Ethics Board voted unanimously Wednesday to investigate whether deals made by Pugh, who has taken an indefinite leave of absence, violated city ethics rules.
Associated Black Charities sent a letter to the ethics board stating that five companies — Grant Capital Management, CareFirst Blue Cross Blue Shield, Maryland Automobile Insurance Fund, Ariel Investments and Frederick Frank Trust — donated $87,180 to pay for 10,000 Healthy Holly books.
J.P. Grant, who heads Grant Capital Management, told the Sun that he gave a separate $100,000 donation to Pugh’s Healthy Holly company in 2016. Grant, who said he wanted to support Pugh’s efforts to promote healthy living for children, said he received one copy of the book and no documentation that others were printed.
He did not return repeated requests for comment.