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Top state officials want independent audit of UMMS board

Stephen Burch, chairman of the UMMS board, talks to reporters after meeting with Gov. Larry Hogan and Senate President Thomas V. Mike Miller Jr. Wednesday. Behind him is UMMS President and CEO Robert Chrencik. (Bryan P. Sears)

Stephen Burch, chairman of the UMMS board, talks to reporters after meeting with Gov. Larry Hogan and Senate President Thomas V. Mike Miller Jr. Wednesday. Behind him is UMMS President and CEO Robert Chrencik. (Bryan P. Sears)

ANNAPOLIS — Leaders of the University of Maryland Medical System vowed to restore confidence in a board beset with ethics concerns as top state officials Wednesday called for an independent audit of the system’s board dealings.

Stephen Burch, chairman of the board, and UMMS President and CEO Robert Chrencik met with Gov. Larry Hogan and Senate President Thomas V. Mike Miller Jr. for little over an hour Wednesday afternoon. Top on the minds of state leaders is a spate of recent reports highlighting contracts that benefited several of the board’s 30 members, including Baltimore Mayor Catherine Pugh.

“It was a good meeting,” said Burch, speaking to reporters as he left Hogan’s office. “It was useful to hear their thoughts. We’re hopeful, with the consensus of our board going forward, we’re going to make sure this doesn’t happen again.”

Neither Hogan nor Miller spoke to reporters following the meeting.

“It was a productive meeting where Governor Hogan clearly and emphatically expressed his concerns about conflicts of interest on the board of UMMS,” Michael Ricci, a Hogan spokesman, said in a statement. “He underlined the importance of addressing the public outcry, and the leaders of UMMS expressed their commitment to act. We will work closely with the legislature on measures to improve oversight and accountability of the board.”

The meeting between medical system officials and leaders in Annapolis comes a day after three members of the board, which is not a state entity, resigned: Pugh, strategic planning consultant John W. Dillon and workforce consultant Robert L. Pevenstein.

A corporation created by Pugh received $500,000 in payments for her self-published “Healthy Holly” book series. The mayor resigned from the board Monday, and she told news outlets Wednesday that she has paid taxes on sales of her children’s books and returned the most recent $100,000 she received from UMMS.

Pugh’s financial relationship dates to her time in the Senate, when she was the vice chair of the Finance Committee, a panel that has jurisdiction over hospital and insurance issues.

Four other members of the board with potential financial conflicts — August J. Chiasera, former state senator and insurance broker Francis X. Kelly, James A. Soltesz and Walter A. Tilley Jr. — have taken voluntary leaves of absence effective Tuesday pending a review of the system’s governance practices.

Burch, speaking with reporters Wednesday, characterized the meeting as productive.

“They’re quite concerned, as we understand, and we are, too, about about all that’s transpired,” said Burch. “They had some very strong, positive views on what should happen next.”

The UMMS board is scheduled to meet Thursday. Burch gave no specifics on actions he expected would be taken.

“The board tomorrow will discuss in detail what we do to fix this going forward to make sure things like this don’t happen again,” said Burch. “We’re more concerned about the institution and its reputation than we are about people on the board or in management. The institution is by far paramount. That was a comment strongly stressed by the governor and the Senate president.

The meeting comes as lawmakers, Hogan and other elected officials are watching the system and considering what other actions might be taken.

“We have 20 days in the legislative session,” said Miller, speaking to reporters Wednesday afternoon before his meeting with Hogan and medical system officials. “We want this issue resolved before we leave here so that for the next nine months the public can rest assured that this is being run and run right and run with transparency.”

Miller said the system will undergo an audit but said it’s not yet been decided who will conduct such a review.

Comptroller Peter Franchot on Wednesday morning called for an independent audit of the system and directed harsh comments at Miller and House Speaker Michael Busch.

“I hope that out of that meeting will come an independent audit, not one done by the legislature’s audit division that everyone knows is under the thumb of the speaker and Senate president,” Franchot said. “Please don’t give us an audit by (the Department of Legislative Services). Give us an independent audit that asks, ‘Who knew what when.'”

Busch has said he was unaware of some of the financial arrangements with board members that have put the UMMS board under a microscope.

Franchot did not give Busch a pass.

“The speaker has been on the board for 16 years,” Franchot said. “Sixteen years.”

“While the comptroller is looking to score cheap political points a week after the story broke, the governor, Senate president and speaker have been and continue to work in a bipartisan manner to address the situation at UMMS,” said Alexandra Hughes, Busch’s chief of staff.

Miller had even stronger words, essentially telling Franchot to mind his own business.

“We should have an outside comptroller take over the position of comptroller because he’s obviously doing a terrible job doing what he is doing at the present time,” said Miller.

Lawmakers and the governor are also reviewing the issue.

The Senate is considering a proposal sponsored by Sen. Jill Carter, D-Baltimore, that would prohibit members of the UMMS board from doing business with the medical system. However, in 2018, when Carter was running for the Senate, her campaign received a $1,000 donation from the mayor’s Healthy Holly LLC.

The governor and Kopp joined Franchot in calls for an independent review.

“State tax dollars go in there and we are very concerned,” Hogan said. “It’s outrageous, appalling and that’s why I demanded people sever their relationships, get off the board. That’s why I called them down here to my office with the speaker and Senate president and entire leadership.”

Kopp agreed with the call for an independent review but rejected Franchot’s comments about the Office of Legislative Audits.

“I think they are quite independent and not under anyone’s thumb,” Kopp said.

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