All children’s stories start with once upon a time and have heroes and villains. In this case, this story, while it involves children’s books, has a slew of villains who might yet triumph over the heroes.
However, the issues are more than just the credibility of the office of the mayor. The villains also include the companies that purchased the books in what appears to not be philanthropic or charitable interest, but a deliberate aim to gain city contracts.
According to the Baltimore Sun, it seems that there were sales of the Mayor’s “Healthy Holly” books to the University of Maryland Medical System, while she was a board member. She was paid half a million dollars for 100,000 copies of her “Healthy Holly” children’s books. It also seems that half of these books were never even delivered, yet Mayor Pugh was paid in full.
Health insurer Kaiser Permanente bought $100,000 worth of the children’s books, another direct conflict of interest as the managed care consortium was in the process of securing a $48 million contract with the city to provide health insurance to city employees.
In 2011 CareFirst said it made a $7,000 contribution to the Associated Black Charities of Maryland so the nonprofit could purchase and distribute “Healthy Holly” books. It made an additional contribution of $7,500 in February 2014 and in all facilitated the charity’s purchase of over 2,000 of the children’s books from Ms. Pugh.
To date, Ms. Pugh has received more than $800,000 for sales of her self-published “Healthy Holly” books dating back to 2011 when she served as a state senator and voted on contracts to benefit companies that had bought her books.
The revelations are causing shock waves. University of Maryland Medical System CEO Robert A. Chrencik is on a temporary leave of absence after a request from the board. Two UMMS board members have resigned and four more have been asked to take a leave of absence after concerns were raised about their business relationships with the hospital system.
A bill sponsored by Maryland House of Delegates Speaker Michael Busch is asking for all UMMS board members to resign by June, and to increase oversight around potential conflicts of interest.
The Mayor’s scandal is only one of many incidents in a city that struggles with high levels of violent crime, deep mistrust of the police and egregious political instability.
A provision in the state constitution to expel officials from office — created after former Baltimore Mayor Sheila Dixon was found guilty in 2010 of embezzling gift cards to needy families, kicks in only if they’re convicted of a crime.
The heroes in this story might be the City Council. All 14 members of the council have called on Pugh to resign, which ultimately forced her resignation.
As a result of the “Healthy Holly” scandals the Baltimore City Council is considering changes to government ethics laws and limits on the power of the mayor. The proposals are aimed to rein in the mayor’s power, with the Baltimore mayor presently having much more power than peers in other cities. The legislation will help make it easier to hold the office accountable.
The legislation includes measures that would ramp up financial oversight and disclosure requirements and protect whistleblowers. Councilman Zeke Cohen said, “When power is so heavily concentrated in one individual, that individual can in some instances become subject to corruption …. A good government has checks and balances.”
Councilman Ryan Dorsey who has sponsored this first round of legislation says, “This recent scandal is only the most recent and most egregious and most publicly understood manifestation of a system that has not been kept in check for a very long time.”
Mr. Dorsey started working on making disclosure requirements more robust after former Baltimore Police Commissioner Darryl De Sousa was charged federally last year with not filing his taxes. Commissioner De Sousa pleaded guilty and was sentenced to 10 months in prison.
Are these isolated incidents? This is about violation of public trust, not only in elected officials but also in charitable foundations, and of course the corporate environment.
I am again disturbed not only by the lack of ethics and obvious corruption shown by Mayor Pugh but by the number of members in otherwise credible organizations which participated in the graft in order to gain financially, and thus also violated ethical standards.
Richard Bowen is widely known as the Citigroup whistleblower. As Business Chief Underwriter for Citigroup during the housing bubble financial crisis meltdown, he repeatedly warned Citi executive management and the board about fraudulent behavior within the organization. The company certified poor mortgages as quality mortgages and sold them to Fannie Mae, Freddie Mac and other investors.
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