Several of the board’s 27 members — including Baltimore Mayor Catherine Pugh (D), who resigned this week from the board — have had business deals with the hospital system they oversee, in some cases worth hundreds of thousands of dollars. The deals, first reported last week by the Baltimore Sun, have been sharply criticized by Gov. Larry Hogan (R) and the Democratic leaders of the General Assembly.
Hogan and Senate President Thomas V. Mike Miller Jr. (D-Calvert) met Wednesday with Burch and Chrencik and expressed their desire for leaders at the medical system, known as UMMS, to take swift action.
“Over the past week, I’ve had the proper time to listen to concerns and reflect,” Burch said Thursday. “The board and I am firmly committed to evolving our governance principles and operating with even more transparency.”
He said the search for an auditing firm would begin immediately.
John Ashworth, senior vice president for UMMS and associate dean at the U-Md. School of Medicine, will act as interim president and CEO.
Chrencik became the chief financial officer of the medical system in 1987 and its executive vice president in 1999. The system operates 13 hospitals, including the state’s trauma unit in Baltimore, and has connections with the state’s dental and medical schools.
Pugh resigned from the board after criticism for selling 20,000 copies of her self-published children’s book series, “Healthy Holly,” to the system. On a financial disclosure form, she listed a $100,000 profit for one year from selling the books.
Pugh spokesman James E. Bentley II said Wednesday that she has returned $100,000 from Healthy Holly LLC to UMMS. He said she returned the money because production of the books was delayed and they were not actually delivered to the hospital system.
Miller told reporters Thursday that he is not sure who approved Pugh’s original deal and that there needs to be more oversight.
“There needed to be transparency so the average person could look at it and understand it,” Miller said.
Board members John W. Dillon and Robert L. Pevenstein, who both reported making more than $100,000 annually through contracts with the system, have also resigned.
Burch has asked other board members who have business relationships with the medical system to take a voluntary leave from the board. Those members are August J. Chiasera, former state senator Francis X. Kelly, James A. Soltesz and Walter A. Tilley Jr.
Anger about the deals has been widespread and bipartisan.
Hours before Burch’s announcement, the House of Delegates suspended its rules and unanimously fast-tracked a new bill to overhaul the hospital system’s board.
Lawmakers said it would also include comprehensive audits of spending practices.
The bill would put the governor — or a designee — on the board of directors, alongside the House speaker and Senate president. It would also expressly prohibit board members from using their office for private gain, forbid any future single-source bids and require audits that are sent to the governor and the legislature’s presiding officers.
The legislation was sponsored by House Speaker Michael E. Busch (D-Anne Arundel), but it was House Minority Leader Nicholaus R. Kipke (R-Anne Arundel) who argued to fast-track it.
We suspended the rules to allow introduction of an emergency bill to require comprehensive audits of UMMS. Introduction by @Kipke and @SpeakerBusch - addressing this self-dealing and ethical breach is a bipartisan issue! #mdga19 pic.twitter.com/j30MfyCY4L— Brooke Lierman (@BELBaltimore) March 21, 2019
“This is an unprecedented move for the minority party to be in this position, but I stand in sincere solidarity with the speaker,” Kipke said. “There are a number of troubling allegations regarding self-dealing among members of the board. The allegations, in my opinion, are really troubling, potentially despicable and just outright rotten.”
Busch, who has served on the UMMS board for 16 years, said in a statement that the medical system “cannot regain the public’s trust without a full accounting.”
A separate bill pending in the General Assembly would bar board members from benefiting from contracts with the hospital systems they oversee. That bill had a hearing last week in the Senate Finance Committee.
Erin Cox and Ovetta Wiggins contributed to this report.