Hogan said the nine board members with financial contracts from the hospital system need to end their conflicts of interest or resign. He pledged to take “whatever action is necessary.”
“There cannot even be the appearance of impropriety,” Hogan said in a statement.
The General Assembly is weighing a bill to outlaw business deals between the hospital and the 30-member board.
Board members who have such deals include Baltimore Mayor Catherine E. Pugh (D), whose financial disclosure form listed a $100,000 profit for one year from selling 20,000 copies of her self-published children’s books series “Healthy Holly” to the hospital system.
The medical system, known by its initials UMMS, receives millions in public funding. It operates 13 hospitals, including the state’s trauma ward in Baltimore, and has ties to the state’s medical and dental schools.
The governor and the General Assembly’s presiding officers appoint most of the private institution’s Board of Directors.
Senate President Thomas V. Mike Miller (D-Calvert) called the scandal “self-dealing” and a “huge disaster.”
He, Hogan and House Speaker Michael E. Busch (D-Anne Arundel) plan a joint meeting with the hospital’s executive leadership. Miller said he plans to meet Monday with the chairman of the board.
“We’re going to solve that problem,” he said. “They are going to find a way to deal with it.”
Before the business deals were made public by the Sun, Sen. Jill P. Carter (D-Baltimore City) earlier this year introduced legislation to ban such arrangements. Carter said she filed the bill after receiving a complaint from someone who was unable to obtain a contract from the medical system and felt it was because “it was sort of an inside circle.”
“It’s at the very least the very definition of the appearance of impropriety,” Carter said. “You sit on the board, you’re there as a volunteer to make good policy and good decisions for patients and for the community, and you are actually gaining millions of dollars just by the fact that you are there and you have the power to steer business your way.”
The bill was heard by the Senate Finance Committee on Thursday.
A UMMS spokesman did not provide a response to questions from The Washington Post on Friday. Hospital officials have defended the contracts as legal.
Some board members reported quite lucrative deals. Former state senator Francis X. Kelly, who owns an insurance company, reported $1.6 million in revenue from contracts with the hospital system in 2017, according to the Sun.
Also in Annapolis on Friday, lawmakers gave final approval to a bill that would grant unemployment benefits to federal workers forced to work without pay during future government shutdowns. Hogan has not taken a position on the bill.
The House of Delegates also advanced a measure to ban the widely used pesticide chlorpyrifos. Under the Obama administration, the Environmental Protection Agency proposed outlawing its use on agriculture. The Trump administration reversed course.
The House refused to adopt Senate amendments to a bill that would raise the state’s minimum wage to $15 an hour. Earlier this week, the Senate changed the bill to give companies with fewer than 15 employees more time to pay the higher wage.
Del. Dereck E. Davis (D-Prince George’s), chairman of the House Economic Matters Committee, said the measure, which is a Democratic priority this session, “is going to pass. We just have to compromise on a couple of issues.”
In other legislative action, the Senate unanimously gave final approval to legalizing cannabis-infused edibles for medical marijuana patients and allowing Johns Hopkins University to establish a private police force. It also gave final approval to legislation that allows for an “enhanced penalty” when a person kills a woman knowing she is pregnant. That bill passed 46 to 1, with Sen. Mary L. Washington (D-Baltimore City) the lone dissenter.
The Senate voted 28 to 19 to pass a bill that would prohibit minors from using tanning salons. Several lawmakers called the measure an overreach.
Senators also advanced a bill that would ban retailers from selling tobacco products and electronic cigarettes to anyone under age 21. The bill was amended to make an exclusion for young members of the military.