For the second time in less than three years, the board of a University of Maryland institution has failed to measure up to basic standards of ethical governance.
Last year, the Board of Regents for the University System of Maryland conducted a review of the University of Maryland football program that was notable for many reasons, chiefly an abysmal lack of transparency and an obsequious eagerness to vindicate the football coach. The board’s mystifying decision to keep on the tarnished program’s coach led to a swift revolt by students, political leaders and alumni. The repentant university system board chair quit, the coach was fired, the College Park president rescinded his retirement announcement and the board is now engaged in a wholesale examination – under the watchful eyes of the General Assembly — of how it should do its business.
Now we have the University of Maryland Medical System’s Board of Directors. Where to start.
A series of revelations, largely in The Baltimore Sun, has unearthed a number of financial relationships of varying degrees of odiferousness between trustees and the system. The most acrid of those has been the disclosure that, starting in 2011, now-Mayor Catherine Pugh began reaping what has amounted to $500,000 from the system for the purchase of a children’s book series, “Healthy Holly,” ostensibly to be distributed to students in the Baltimore City Public Schools. But a number of other board members own or are employed by businesses – insurance companies, consulting firms, banks – that have their own deals as well.
Some, perhaps even a great many, of these financial arrangements may end up being shown to be above-board. But clarity is in short supply, as UMMS officials initially appeared determined to respond grudgingly if at all to questions about how these contracts came to be. Were they competitively bid? Why was the UMMS conflict of interest policy, enacted in 2013 and revised in 2017, apparently ignored? Who knew about these arrangements? Who approved them?
There are important differences between the University System of Maryland and UMMS, and thus differences between the boards and how they are overseen. The university system is a state agency, its employees are state employees and its budget is determined by the governor and the legislature. UMMS is a private, not-for-profit institution, albeit one with a strong relationship with the state and its taxpayers – a state agency approves facilities, state taxpayers underwrite major construction projects and so forth.
Members of the University System of Maryland board are appointed by the governor and are subject to Senate confirmation. The UMMS board, meanwhile, is composed of six nonvoting and between 22 and 27 voting members who are nominated by the UMMS board and then approved by the governor (three more members can be added if UMMS deems it “appropriate”). There are some other statutory rules (three shall be members of the Board of Regents; at least one must have expertise in the hospital field; two are members of the General Assembly, nominated by the Senate president and House speaker). None of these appointments are subject to legislative approval. Board members are supposed to be limited to one five-year term – or to no more than two consecutive terms, if reappointed. In the case of Pugh and several others, this appears to be a widely ignored rule.
As is generally the case with these types of appointments, they tend to go to politically well-connected civic and business leaders, many of whom had some previous connection to the medical system or to the universities. These are plums to top off a career of success and distinction.
So what’s to be done? The first order of business needs to be a thorough and independent audit of the board’s relationship with the system, of how contracts are being let and of whether the board’s conflict of interest and other policies are appropriate and are being observed. The review needs to focus not just on the board but on the upper echelons of UMMS leadership and management; it is they who appear to have not only condoned but authorized some of these relationships.
Sen. Jill Carter has introduced a measure that would prohibit UMMS board members from doing business with the medical system. House Speaker Michael Busch – who himself has been on the board an astonishing 16 years and is showing up rather late to the good governance party — said Wednesday he was introducing a measure that would require an independent financial audit of the system, mandate Senate approval of nominees to the board and put an end to no-bid contracts to board members. UMMS board Chairman Stephen Burch said the system itself was undertaking a comprehensive review of its contracting processes.
Pugh says she is refunding $100,000 of her contract to the medical system, and she and two other board members have resigned; four more have taken leaves of absence. On Thursday, UMMS President and CEO Robert A. Chrencik announced he would take a leave of absence at the board’s request. More departures may follow, including some of the hospitals’ executives who have played a role in allowing these arrangements to flourish.
For now, we would urge lawmakers first to get to the bottom of what really has been going on at UMMS before making any systemic changes. The system’s review is welcome; an independent audit would be even more so. And on top of any proposed reforms, we would suggest a greater recognition that the appointment of trustees and regents needs to be less a political and civics spoils process and more an acknowledgment that these seats come with serious fiduciary and ethical responsibilities.