As agents swarm city, Pugh described as distraught, ‘not fit to make decisions’

Federal agents leave Baltimore City Hall with boxes on Thursday. (The Daily Record / Adam Bednar)

The investigations into Baltimore Mayor Catherine Pugh’s business deals exploded into public view Thursday, as federal agents swept across the city. Agents seized records from her homes and City Hall offices, a federal grand jury issued at least one witness subpoena and the governor said it was time for her to resign.

FBI and IRS agents searched Pugh’s Ashburton home as stunned neighbors watched. City Hall workers found their morning tasks interrupted when agents hauled several boxes of records out of the building.

Pugh’s attorney, Steven Silverman, said federal agents had served a subpoena for financial records belonging to Pugh and that his law firm had complied.

Federal agents were also seen carrying boxes out of the downtown building where Keith Timmons, Pugh’s campaign treasurer and the attorney who incorporated her Healthy Holly LLC, has an office.

Catherine Pugh’s attorney, Steven Silverman of Silverman Thompson Slutkin & White, speaks to reporters Thursday outside Pugh’s home in Baltimore. (The Daily Record / Tim Curtis)

Also raided on Thursday was the home of Pugh aide Gary Brown Jr. and the Maryland Center for Adult Education, an organization that Pugh used to run, according to The Sun.

Pugh was holed up in her home most of the day. Her attorney, after visiting her at home Thursday afternoon, described her as distraught and exhausted, still battling the pneumonia that she said forced her to take a medical leave on April 1.

“She is not fit to make decisions today,” Silverman said. “She is under a doctor’s care. She has a severe case of pneumonia, which culminated into a severe case of bronchitis. She is under a tremendous amount of stress, which has added to her physical condition.

“She is not able to focus long enough to make rational decisions.”

How much longer Pugh clings to her job appears to be problematic. She appears to have no support from the city’s political or business community, and Gov. Larry Hogan issued a stern statement Thursday that left no doubt as to his views.

“Now more than ever, Baltimore City needs strong and responsible leadership. Mayor Pugh has lost the public trust. She is clearly not fit to lead,” Hogan said in a statement. “For the good of the city, Mayor Pugh must resign.”

‘Healthy Holly’

Pugh has been facing mounting calls to resign over a scandal involving “Healthy Holly,” her self-published children’s books, which she sold to a health plan that does business with the city, as well as to the University of Maryland Medical System, on whose board she sat while serving as a state lawmaker.

Pugh sold $500,000 worth of the books to the $4 billion hospital network over the years and meanwhile pushed legislation that would have benefited the regional system.

Thursday’s stunning developments revealed the federal investigation that has been proceeding in the background; most public attention has been on the state prosecutor’s investigation requested by Hogan and on probes by the city’s ethics board and its inspector general.

The existence of a federal grand jury was disclosed by a spokesman for the University of Maryland Medical System, who said the system on Thursday had received a grand jury witness subpoena.

IRS and FBI agents load boxes of items carried from the home of Baltimore Mayor Catherine Pugh on Thursday. (The Daily Record / Tim Curtis)

“The University of Maryland Medical System has received a grand jury witness subpoena today from the U.S. Attorney’s Office for the District of Maryland seeking documents and information from UMMS in order to conduct their investigation of Mayor Pugh. We are fully cooperating with the investigative process,” said UMMS spokesman Michael Schwartzberg.

The U.S. Attorney’s Office declined to comment.

Lester Davis, a spokesman for Bernard C. “Jack” Young, the ex officio mayor, told reporters that searches at City Hall were limited to the mayor’s offices on the second floor. The council president’s offices on the fourth floor and City Council members’ fifth-floor offices were not searched, he said.

Councilman Ryan Dorsey has been one of the mayor’s most outspoken critics. He was the first to call on Baltimore’s inspector general to investigate the mayor, and among the first to call for her to resign.

“It’s not like government has been working particularly well under this mayor from the get-go. I was already set on making things just work the best they could, and struggling through and trying to work with an already dysfunctional executive branch,” Dorsey said. “This whole term, all of this stuff, is just added chaos on top of absolute dysfunction. She’s been the worst mayor we could possibly imagine.”

Dorsey learned about the searches through news reports but said he wasn’t surprised by the FBI and IRS searching City Hall.

“Let’s be clear, it’s to a point now … basically anytime anybody is about to ask me a question I assume the answer I’m going to have to give is, ‘She’s going to prison,’” Dorsey said.

The raids at City Hall caught almost all city officials off guard. City Councilmen Robert Stokes and Bill Henry said they learned about the searches from news reports and had not been provided any information by Young’s office.

A source within City Hall said Pugh returned to Baltimore last night after being out of town. Federal agents had the second floor of City Hall closed on Thursday morning and left at about 11 a.m. carrying and pushing hand carts with several boxes out of the building.

Law enforcement officers search a home of Baltimore Mayor Catherine Pugh on Thursday morning on Ellamont Street in Baltimore. (The Daily Record / Tim Curtis)

City Solicitor Andre Davis said he found out about the searches from news reports. He described his role in the investigation as “zero.” Davis said that, generally, IRS involvement means the agency is investigating possible tax offenses, while the FBI could be involved for any reason.

Davis, as he entered City Hall on Thursday morning, said he hoped  to review a warrant and an affidavit and to release details publicly. After agents left, Davis said he would not release the document detailing what the FBI and IRS had seized from mayor’s suite of offices on the second floor, noting that releasing it might hinder an ongoing investigation. Investigators seized the type of items typically found in an office, he said.

“I have made the determination that disclosure of the return at this time would be premature and may well impede the success of the ongoing investigation. So I will not be releasing (the document) at this time and I cannot say when, exactly, I will release the return,” Davis said.

Young arrived at City Hall at about 8 a.m. flanked by his security detail. He walked into City Hall without acknowledging reporters and ignored shouted questions.

Young left City Hall shortly before 11 a.m. He moved past assembled reporters and gave a brief statement as he stood on the running board of a black SUV.

“I’m not ducking anybody. I was unaware, but we’re keeping the city moving forward. I’m on my way to a meeting,” Young said.

Removing a mayor

Only a conviction can trigger a Baltimore mayor’s removal from office, according to Davis and the state constitution. Baltimore’s mayor-friendly City Charter currently provides no options for ousting its executive.

“The charter is utterly silent on how long the leave can last, exactly what the reasons are for a leave,” Davis told reporters.

With the investigations intensifying, political analysts said Pugh’s biggest bargaining chip is her refusal to resign in a city accustomed to a high-drama, insular political culture.

Pugh came to office in late 2016 after edging out ex-Mayor Sheila Dixon, who spent much of her tenure fighting corruption charges before being forced to depart office in 2010 as part of a plea deal connected to the misappropriation of about $500 in gift cards meant for needy families.

Silverman, Pugh’s attorney, said the mayor is not in any kind of condition to decide what she should do.

“She understands all of the options and she is going to make the best decision in the best interest of Baltimore City and it’s just not going to be today because she is not in a very good place physically and mentally,” he said.

“She is generally aware that there is a consensus that she should resign. She is not specifically aware of the governor. We did not discuss it. I think for people to make material decisions in their life, they have to be at a certain level of stability in order to make those decisions.”

Staff writers Heather Cobun and Bryan P. Sears and The Associated Press contributed to this story.