The Washington PostDemocracy Dies in Darkness

On scandal-plagued hospital board, members’ term limits were often ignored

Gov. Larry Hogan (R), center, next to Robert Chrencik, standing at Hogan’s left, who resigned this year as president and CEO of the University of Maryland Medical System in the wake of a scandal over contracts held by members of the system’s board. Lt. Gov. Boyd Rutherford (R) is to Hogan’s right. (Brian Witte/AP)

Gov. Larry Hogan has decried contracts that board members of the University of Maryland Medical System held with the organization they were tasked with overseeing and promised to “clean house.”

But state law long has called for housecleaning along the way, specifying that board members can’t serve more than two consecutive five-year terms. Hogan (R) and his predecessors, who appoint the board members, allowed some to stay well past a decade.

A spokesman for the governor, who took office in 2015, said Thursday that term limits will be enforced from now on.

“These practices were handed down from both Republican and Democratic administrations,” spokesman Michael Ricci said in an email. “Governor Hogan is working to put an end to them so we can help restore public trust in UMMS.”

Members who lingered on the board include former state senator Francis X. Kelly, whose insurance company held some of the largest contracts that are under review as part of a broad investigation of the hospital board.

Kelly, who did not respond to requests for comment, joined the board in 1986 and most recently was reappointed by Hogan in 2016. He took a voluntary leave of absence from the board while auditors probe the contracts.

The hospital system is a nonprofit institution created by the state in 1984, when it privatized Baltimore’s struggling public hospital. The legislature said the board should have between 22 and 27 members, including two members of the General Assembly and one who represents a “community advisory council.”

Ricci explained Hogan’s re­appointment of Kelly by saying he had moved from another board seat to one representing St. Joseph Medical Center, a UMMS affiliate. But the term limits don’t apply only to certain seats or apply separately to specific seats. “A member may be reappointed, but may not serve more than 2 consecutive full terms,” the statute says.

Former Baltimore mayor Catherine E. Pugh (D) was appointed to the board as a representative of the advisory council in 2002, when she was a member of the Baltimore City Council. She stayed on through her stints as a state delegate and senator and kept the spot after becoming mayor. After revelations by the Baltimore Sun that the hospital system paid her $500,000 for her self-published “Healthy Holly” children’s books, Pugh resigned her board seat. She stepped down as mayor on May 2, a week after federal agents raided her two homes and office.

Ricci said Pugh wasn’t replaced on the board because “the Community Advisory Council never put another name forward.” UMMS spokesman Michael Schwartzberg did not respond to a request for comment. Pugh’s attorney, Steve Silverman, declined to comment.

State Sen. Jill P. Carter (D-Baltimore City), who sponsored legislation this year to reform the board, said appointees overstaying their term limits was “part of the problem” that led to board members receiving contracts.

“Clearly, there was nobody monitoring the board — its membership or its actions,” Carter said. “I would say the ball was dropped by every governor.”

Carter’s bill, which Hogan signed into law on April 18, maintains the two-term limit but will dissolve the current board and appoint a new one by Jan. 1.

Maryland House Speaker Michael E. Busch (D), who was appointed to the UMMS board in 2004 and remained on it until his death this year, was lead sponsor of the House version of the bill.

Rep. Jamie B. Raskin (D-Md.), a former state senator from Montgomery County who served as chairman of the Senate Executive Nominations Committee, agreed that sidestepping term limits was a recipe for trouble.

“If members were allowed to essentially stay on the board in perpetuity, it’s a direct threat to the independence and accountability of the board,” he said.

There is debate about term limits on nonprofit boards, but most commonly they are recommended, even though dedicated board members with institutional knowledge are sometimes forced out.

A national health-care survey released this week by the American Hospital Association flagged among “opportunities for improvement” that almost a third of organizations reported not limiting how long board members can serve.

“Board term limits offer a formal process for longtime trustees to conclude their service, while also providing a way for members to leave a board who may no longer be a good fit for the organization’s governing body,” Debra Stock, an AHA vice president, said in an emailed statement. “Hospital and health system boards must balance the value of experienced trustees with the opportunity to bring fresh thinking and new competencies to the board.”

In 2008, then-Gov. Martin O’Malley made several new appointments to the UMMS board amid turmoil among its members over who should be chief executive of the hospital and other issues.

About a dozen board members then resigned in protest of what some viewed as gubernatorial meddling in board decisions. The exodus bolstered the influence of Kelly and other remaining board members whose views aligned with the new appointees, according to several former board members.

“If I made a mistake as Governor where UMMS appointments were concerned, it was not in appointing too many new members, but in reappointing too many existing members,” O’Malley, a Democrat, said in an email.

While the former governor said “the board misbehavior happened under the unwatchful eye of Larry Hogan,” records show Kelly and other board members contracted with the system during O’Malley’s administration as well.

Board members who stayed past a decade include John W. Dillon, who was paid $13,000 a month over several years as a health-care consultant for the system, according to his legally required financial disclosures. Dillon was appointed in 2006. After he served two terms, Hogan did not appoint a replacement, leaving Dillon on the board until the scandal prompted his resignation.

Robert L. Pevenstein, who resigned amid the scandal, had been on the board for 16 years, with his latest reappointment by O’Malley. Pevenstein reported making more than $100,000 annually through contracts with the system.

Neither Dillon nor Pevenstein responded to requests for comment.

House Minority Leader Nicholaus R. Kipke (R-Anne Arundel) said the legislation passed in the wake of the scandal “sends a clear message” that lawmakers will no longer tolerate members overstaying their terms.

“You assume it is all taking place properly. Clearly it was not,” Kipke said. “The reforms that will take place will hopefully address that.”

Interim UMMS chief says hospital system’s culture ‘needs to be tightened up’

Members of hospital boards also had contracts with the systems they oversaw

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