BALTIMORE (WJZ) —Eight days after a Baltimore Sun report uncovered a business relationship between Catherine Pugh and a University of Maryland Medical System Board of Directors on which Pugh serves, the Baltimore City mayor explained how the deal started.

“I recall passing the time by thumbing through the first book before an UMMS meeting,” Pugh wrote in a Thursday afternoon statement. “One my colleagues loved it and thought it would help advance children’s health.”

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She had served on the private, non-profit Board of Directors since 2001. Throughout an eight-year-period, Pugh sold the Medical System $500,000 worth of her “Healthy Holly” children’s books. These books were in turn given to the Baltimore City school system, and are currently sitting in a district warehouse.

Pugh did not disclose the relationship, and it has been determined that several other board members have business relationships with the UMMS.

Thusday morning, the UMMS Board of Directors asked the system’s president and CEO Robert A. Chrencik to take a leave of absence while the board brings in “an outside, independent accounting/legal firm to conduct an exhaustive review and assessment of Board contractual relationships.”

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Pugh resigned from the board on Monday, then returned $100,000, she said, in profits from book sales to the UMMS. Two other UMMS board members resigned, while four others were asked to take leave.

After skipping out on public meetings Wednesday, she spoke for the first time after a hearing in Annapolis Thursday morning.

“I apologize for some of the comments I’ve made just, under- just being concerned. I just feel that we can move forward. I’m not perfect,” Pugh said.

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Mayor Pugh failed to disclose business dealings and even donated money from her book company to her campaign.

“It was an error, yes,” Pugh said. “We disclosed it on another form and, so an error. Thank you,”

Pugh released a statement later Thursday afternoon, saying she will continue writing- with this experience in mind.

“As many people know, I am very interested in health and fitness – particularly as it relates to our children. They may not know that I have been a publisher since 1979 and an author for 25 years.

I started working on the Healthy Holly concept more than a decade ago after
attending a conference on childhood health and obesity, and, for several years, I put a great deal of time and my own money into developing it.

It was a project that I was passionate about, and I was excited for the opportunity to expand its reach. I recall passing the time by thumbing through the first book before an UMMS meeting. One my colleagues loved it and thought it would help advance children’s health.

Despite all that has happened, I am glad that the important messages in the book reached our city’s children. I never thought this would lead to today, and I understand how it may look to some, but here is what I have done to address this matter:

  • I have resigned from the UMMS Board. It was an honor to serve an institution that does so much good, but it was time to leave. I have more than enough to do as Mayor.
  • I updated my old Senate financial disclosure forms to be transparent upon learning that these transactions were disclosed on one set of forms but not another. I’m not sure why this oversight occurred, but it has been corrected.
  • I have returned the most recent payment.
  • Like any other small business owner, I’ve reported this revenue on my tax
  • I plan to keep working to improve the health of children in our city, and I will keep writing – with this experience in mind,”

“The ideas of these sort of closed societies, or almost secret societies, boards where people don’t know what’s going on, you don’t know who is there, who’s voting for what,” said Fred Guy, UB ethics professor.

Guy teaches ethics at the University of Baltimore, he said this is likely just the tip of the iceberg.

“If Sheila Dixon’s career was over for $200 in gift cards, I think- if you’re going to hold this mayor to the same standard- I think she’s in serious trouble,” Guy said. “It speaks to ‘Can you really trust this person anymore,’ really,”

Comptroller Peter Franchot called for an independent audit Wednesday at the state’s Board of Public Works Meeting.

It is unclear what legal and accounting firm will conduct UMMS’ review.

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Paul Gessler