STEVE INSKEEP, HOST:
What's really wrong with selling a children's book? That's the question facing Baltimore Mayor Catherine Pugh. She received hundreds of thousands of dollars through the sale of her series of children's books to an area hospital system. And now Maryland state prosecutors are investigating while the mayor takes a leave of absence. WBAL investigative reporter Jayne Miller has been covering the story in one of my favorite cities.
Ms. Miller, good morning.
JAYNE MILLER: Good morning.
INSKEEP: So how did a hospital chain come to buy so many children's books?
MILLER: Well, Ms. Pugh started to serve on the board of the University of Maryland Medical System in 2001. And there came a time, as she has described it, that she has authored children's books - they're health and nutrition books - animated books, I mean, with illustrations, et cetera - and came a time when she showed the books to one of the board members - not very specific about when that was. And they entered into this agreement - although she's been very clear to say there was no contract - by which the University of Maryland Medical System paid her $100,000 five different times since 2011 to publish 20,000 books at a time.
INSKEEP: Now, I guess we could see the rationale here, that this is - what? - for kids, for patients in the hospitals, but it's also a board member getting a huge payment without a lot of competitive bidding, it sounds like.
MILLER: And that's certainly where the first questions start, and it doesn't just surround her, although she's the most high-profile visible because she's the mayor of the city of Baltimore elected in 2016. But there have now nine board members of the University of Maryland Medical System that have been - the questions have been raised because they all have these kinds of what they call self-dealing. They all have business relationships with the University of Maryland Medical System, which is the second-largest medical system in the state of Maryland.
INSKEEP: Wow. What are some of the things that they are effectively selling to themselves besides children's books?
MILLER: Well, insurance is the big one. There is an insurance firm run by a former state senator whose name is Frank Kelly from Baltimore County just outside Baltimore City in Maryland. And he has had arrangements with the University of Maryland Medical System by which he's made tens of millions of dollars. And in terms of the exact amount of money that has been made by individual board members in their own business relationships, that's a little unclear.
There have been disclosures. But I think everybody needs to keep in mind that these hospital systems around the country are not - mostly not public systems. They are generally organized as private nonprofits, so they're not subject to Public Information Act. They are subject to regulatory actions, so there are certain disclosures that get made. But in terms of the exact nature of the business deals and the exact amount involved, that's not entirely clear at this point.
INSKEEP: Jayne Miller, we have to note in passing that we talk regularly on this program about huge health care costs in this country and how one source of the high costs would happen to be hospitals. But let me just ask about Mayor Pugh. We mentioned that she took a leave of absence. She said, I believe, that's for health reasons, right? Has she directly responded to the allegations themselves?
MILLER: She held a news conference last Thursday upon being released from the hospital after being treated for a bout of pneumonia and discussed the University of Maryland Medical System transactions where she accounted for about 58- to 60,000 books over this period of time. The problem is that that's not the whole story. And what has really now emerging - the questions that surround Mayor Catherine Pugh are whether she has properly disclosed her relationships with different business entities when she is sitting on the city's spending board, for example, when she was in the state Legislature and taking action and legislative action and executive action involving the very same entities.
INSKEEP: Wow.
MILLER: That's where this story is headed now.
INSKEEP: OK. We'll keep following. Jayne Miller, thanks so much.
MILLER: Thank you.
INSKEEP: She's with WBAL in Baltimore. Transcript provided by NPR, Copyright NPR.