Frank DeFilippo: Outraged by Pugh Scandal? Thank a Journalist

The headlines are “Healthy Holly”’s, but the moment belongs to journalism.

The occasion comes at a time when local newspapers are on life support, not so much from the infantile name-calling of President Trump, but from lack of support and the greedy clutches of bottom-feeding hedge fund managers.

The rush of stories also converges in perfect parallelism with a survival seminar The Washington Post hosted last week about a new model for local news outlets. During the conversation, it was noted that 1,800 city newspapers have vanished since 2004. Parenthetically, many news operations have shrunk to a fraction of their original sizes through layoffs, buyouts and hiring freezes, crimping their ability to do what they do – cover the news.

 “Healthy Holly,” for those who’ve been vacationing on another planet, is a kid’s book that was written by Baltimore Mayor Catherine Pugh. So far, the book has yielded $800,000 in revenue that has been traced by reporters to Pugh’s LLC (Limited Liability Corporation), an astounding return on a first-time effort for a novice author whose book’s circulation is limited largely to warehouse storage. Maybe they’ll be remaindered at the next City Book Fair.

It is important, here, to break the narrative for recognition (see first sentence) of the pick-and-shovel reporting at The Baltimore Sun, and the other news outlets that followed, that unraveled the complex story of the funny-money miraculously landing in Pugh’s lap.

This exemplar of enterprise journalism illustrates why local outlets are important to a community and, to the extent that they are able, guardians of the public trust and, in this case, treasury.

The daily thump of stories on Baltimore’s doorsteps and on different electronic devices has led to Pugh’s leave of absence for – ahem! – health reasons, and a massive overhaul of the University of Maryland Medical System’s governing superstructure as well as multiple investigations into “Healthy Holly”’s tream of stealth money.

Where this all leads, and whether Pugh returns to office at some point, is yet another visible smudge on a city that has become a national embarrassment and a standard for lowered expectations. It is difficult for a public official to survive such humiliation and degradation and retain the public’s confidence. And be thankful to local journalism that Pugh’s insidious behavior was exposed.

The power of the press is no empty phrase. It is, perhaps, nicely summed up with Humphrey Bogart’s line in the film, “Deadline USA,” as he looks down on the rumbling machinery rolling out the day’s edition: “Those are the presses, sweetheart, and there’s nothing you can do about it.” Or a more recognizable observation might be from “The Godfather,” “It’s not personal, Sonny. It’s strictly business.”

Frank A. DeFilippo

A brief recap: Pugh’s LLC was the repository for more than $800,000 (and probably still counting) for copies of her children’s book, “Healthy Holly.” The book was to be distributed to kids around the city and elsewhere to encourage healthy living habits. One television station displayed a copy of “Healthy Holly” that was riddled with typographical errors. Health habits apparently do not include spelling or proofreading.

Contributors, sponsors, underwriters, or purchasers – readers’ choice – of the slim volume include but are not limited to: University of Maryland Medical Systems, $500,000; Kaiser Permanente, $114,000; Ariel Investments, $3,680; Associated Black Charities, $200,000; J.P. Grant, $100,000; Care First $80,000; Maryland Automobile Insurance Fund, $7,500. Associated Black Charities appears, in at least one instance, to be a pass-through for a cut, according to The Daily Record.

Early in her sideline career as author-publisher, Pugh reportedly bought a house for which she paid cash. She also laid out cash for repairs and upgrades to the exterior of the house. The outlays followed large deposits in her LLC, according to reports.

Pugh sat at the intersection of money and politics. As a state senator, she chaired a subcommittee that processed health care legislation. And as mayor, she was the key member of the Board of Estimates where two of the five members are her appointees and a third member, Comptroller Joan M. Pratt, is her partner in a downtown fashion boutique.

Pugh not only handled health care legislation in the Senate, but she was a board member of the UMMS, which bought $500,000 worth of her books. Kaiser Permanente, in another example, had a $48 million health care contract pending before the city’s Board of Estimates when it invested $114,000 in copies of “Healthy Holly.”

Pugh was elected with heavy support from Annapolis, from not only her Senate colleagues but the corps of lobbyists who regularly work the hallways of the State House as well as the committee rooms of the legislature. It was speculated at the time that part of the lobbying activity would shift to City Hall with Pugh’s installation as mayor.

To sort out the loose ends, a number of investigations are underway. The General Assembly fast-tracked legislation to dismantle and reconstitute the UMMS board. UMMS has engaged an auditing firm to review its contract practices. Acting Mayor Bernard C. “Jack” Young has ordered a review of 90 contracts approved by the Board of Estimates for irregularities. The awards could be challenged by competing vendors. The city’s ethics board is reviewing Pugh’s actions for code violations. The Maryland Insurance Administration is investigating the purchase of Pugh’s book by Kaiser Permanente. And the state special prosecutor is investigating Pugh at the request of Gov. Larry Hogan (R). Several officials have called for Pugh’s resignation, and the list is growing.

A number of directors, including Pugh, have resigned or taken leave from the UMMS board, as well as the boards of affiliated organizations, because they’ve benefited financially through unbid contracts, or other conflicts.

Redemption is a powerful sentiment within the black community. Pugh chose the correct public relations strategy – bat it down fast and first. Fresh out of a hospital bed (for pneumonia), she called a news conference, offered a thin apology, announced an immediate leave of absence and skittered out of public view. The attempt at contrition did not produce the desired result.

The question is whether there is enough forgiveness left within Pugh’s natural constituency to sustain her in office and through a campaign for reelection. Under the law, a public official technically does not have to surrender an office if and until conviction.

Black women dominate the vote in Baltimore City. Pugh is the second black female mayor to experience legal difficulties because of the interference of money. The first was Sheila Dixon, who was forced from office because of her misuse of gift cards that were intended for the poor. A side issue was her extravagant shopping sprees on out-of-state trips with her developer-boyfriend.

Dixon, who barely lost a comeback election to Pugh, is already making the media rounds to encourage talk about running yet again for the office she was forced to abandon after her fall from grace.

Remember, that in addition to the $800,000 in her LLC, Pugh is sitting on another $1 million in a campaign fund fully a year before the next mayoral election. And when an official of Pugh’s modest abilities and accomplishments can assemble that much money, there’s ample space for suspicion about why those who write big checks want her to remain in City Hall.

It will be interesting when, at some point, the list of book purchasers is superimposed on the roster of Pugh’s campaign contributors to see if they felt compelled to contribute twice to protect their interests and their relationships with the mayor.

If Pugh survives the many investigations and decides to remain and run again, it might be difficult for the black community to forgive and forget a mayor who has personally benefited to the tune of millions and blithely writes return checks for $100,000. Put another way, the black community is embarrassed by Pugh’s behavior and aghast at that kind of money with so much blight and poverty affecting their lives.

Back to the beginning, as is often the case in news writing, be happy and thankful that journalism is alive and alert in a town that has taken a devastating series of blows and setbacks, including Pugh’s palms-up governance. She vowed to change the city’s narrative and she has succeeded.

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