University of Maryland Medical System pays members of volunteer board hundreds of thousands in business deals
Members of
But as they oversee the hospitals' work, about a third of appointed members receive compensation from the medical system through contracts with their businesses. They provide goods and services to the system, ranging from consulting to pest control and civil engineering, according to financial disclosure forms reviewed by
The state
Sen.
If board members benefit from side deals with the hospital system, they could be less likely to scrutinize corporate spending with an eye toward keeping costs low for patients, Carter said. And hospital management could feel pressure -- even implicitly -- to give work to a board member's firm, rather than looking for other options, she said.
Carter said her bill is designed to bring about a "renewed commitment" to the "best practices of public and private service to the
Carter's bill would bar board members from having a financial interest in a business that is negotiating a contract, has a contract or is a subcontractor on a contract with the system. It also would bar members from "intentionally using the prestige of office or public position for that member's or another's private gain."
The bill also would require members to file financial disclosure statements with the
The
Schwartzberg argued that if the legislation were to pass, board members likely would resign -- causing the board to lose expertise.
"The UMMS Board of Directors is comprised of incredibly talented individuals, many of whom are preeminent in their fields," he wrote in a statement. "Similar to other private sector boards, UMMS benefits greatly from the board's ongoing governance, business counsel and objectivity. The system has a consistently enforced Conflict of Interest Policy and complies with all financial disclosure requirements that are required of every hospital in
Moreover, he argued, the legislation would block hospital leaders from serving on the board, since they are paid by the medical system. The bill "would deprive UMMS of expertise, and even preclude essential, employed administrative and clinical leadership from serving on its board."
The system was created in 1984 when the state-owned
But it continues to receive taxpayer money, including
In addition to Pugh, several current and former public officials are voting members, including
The voting members have been appointed by
Kelly -- who owns an insurance company -- reported receiving income from hospital sources. In 2017, Kelly reported his company generated more than
He did not respond to a request for comment.
Pugh, who has been a member of the board since 2001, reported on her 2017 financial disclosure form making a profit of
"UMMS purchased 20,000 'Healthy Holly' books and
Through a spokesman, Pugh said Wednesday that system buys her books when she "publishes or when there is a need." She wrote the "Healthy Holly: Exercising is Fun" paperback in 2011.
In an interview, the mayor said board members do not vote on their own contract awards, and her compensation met with legal requirements for "full disclosure."
"There are disclosure forms. We fill them out. We make them available," Pugh said. "There's certainly some expertise on the board that is very much needed."
In a second interview late Wednesday, Pugh said that her 2017 form, as filed with the
After purchasing the books, the hospital system gives them to schools and day care centers for the children there to read, the mayor added.
Pugh said the board would abide by any new laws.
"I'm not against the bill," Pugh said. "We'll follow whatever the legislature decides."
In addition to Kelly and Pugh, seven other board members reported having a financial interest in companies doing business with the hospital system. Attempts to reach them Wednesday for comment were unsuccessful.
They include:
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Two of these deals -- Kelly's and Dillon's -- were listed on the system's most recent filing with the Internal Review Service. Kelly's deal was reported to the federal government under the heading "Business Transactions Involving Interested Persons." The system reported paying Dillon
Even though the system board is not a state agency, he argued, it should act with the public's interest in mind.
"Folks that are put in positions of authority should not also be in a position to financially benefit from them as well," Effingham said. "It's going to raise red flags."
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