Privatization and Kickbacks: Why the Healthy Holly Scandal Is Bigger Than Baltimore’s Mayor

April 3, 2019

Professor Lawrence Brown says systemic change is necessary to break corporate corruption of Baltimore’s political system

Professor Lawrence Brown says systemic change is necessary to break corporate corruption of Baltimore’s political system


Privatization and Kickbacks: Why the Healthy Holly Scandal Is Bigger Than Baltimore's Mayor

Story Transcript

LAWRENCE BROWN There really shouldn’t be any corporate entity that’s powerful in this city that should be beyond scrutiny. The situation in Baltimore is way too critical, too many lives are at stake, infant mortality is spiking, murders have spiked, people are dying on these streets. And so, if you have millions of dollars, of public dollars, and you’re pushing them out to your friends on these private boards, that’s unacceptable.

JAISAL NOOR Welcome to The Real News. I’m Jaisal Noor in Baltimore. Embattled Baltimore Mayor Catherine Pugh has taken a leave of absence— the latest development from a growing scandal surrounding self-dealing at the board of the University of Maryland Medical System, or U.M.M.S. As first reported by The Baltimore Sun, Mayor Pugh served on the Medical System’s Board while receiving half a million dollars from the System since 2011 to publish books for Baltimore school kids without disclosing the payment. While Pugh served as state senator and board member, the Medical System purchased 100,000 copies of her Healthy Holly series of children’s books aimed at promoting good health for $500,000 in no-bid contracts that all went undisclosed. Pugh then went on to sponsor bills that would benefit the Medical System by making it “harder for aggrieved patients to sue hospitals and doctors for big judgments via medical malpractice claims.” That’s according to The Baltimore Sun. Only a fraction of these books have been located, thus far. On Monday, The Sun also reported that Kaiser Permanente, a health provider, paid Pugh an additional payment of over $100,000 for some 20,000 additional copies of her book while they were “seeking a lucrative contract to provide health benefits to city employees.” In 2017, Kaiser won the $48 million city contract, but what’s gotten far less attention are the systemic issues at play that led to this scandal. The other Medical System board members who’ve received millions in lucrative contracts, like President and CEO Robert Chrencik and former State Senator Frank Kelly, both of these figures were also key in the privatization of the Medical System in 1984. To discuss all this and more, I spoke to Morgan State Professor, scholar and activist, Lawrence Brown.

LAWRENCE BROWN I think in times of tremendous crises, even catastrophes, people have this tendency to use this rhetoric of strength and resilience and not take the time to acknowledge the brokenness that is real. When you talk about a city that has over 300 homicides in the past four years, a city that has seen four police commissioners in two years, a mayor stepping aside for health reasons ostensibly, but with swirling allegations of corruption, this is a city that is broken. It’s a city that activists have had to push the mayor and the city council. Even the things that have been pushed, haven’t always come to fruition like the $15 per hour minimum wage. So this is a city that doesn’t want to acknowledge the way in which its brokenness is impacting people, especially those that live in a Black butterfly on a daily basis. And I think we have to come to grips with our brokenness. We have to understand and accept reality because that’s the only way we can chart a path forward.

JAISAL NOOR You said a Black woman is taking the fall for a bucket full of white men who were ranked higher and did more in privatizing the University of Maryland Medical System to set up a scheme in the first place. Without privatization, a lot of this could have never happened. That’s the root.

LAWRENCE BROWN So my colleague at the University of Maryland-School of Social Work, Jeff Singer, wrote a tremendous article about how privatization really is the linchpin of this whole corruption scandal. You don’t get to this level of corruption without 1984 and former State Senator Frank Kelly and others, working in the Maryland General Assembly to privatize this public good, the public hospital at the time, which became the University of Maryland Medical System. With the privatization, former State Senator Frank Kelly was able to get tens of millions of dollars bilking the University nonprofit system so that his insurance company could rake in the dough. And you had Mike Miller, he was on the board, Mike Busch who’s the Speaker of the House— they’re sitting on the board and they’re able to say, “I don’t know.” How do you not know? If you have a seat on the board of a nonprofit, you’re supposed to know what’s going on. So that tells me either you know and you’re lying, or you were negligent and either way, that’s bad. And so, my thing is how is it that someone who’s ostensibly pretty low in the big scheme of things, is taking the fall? When you have people who are raking in way more money and people who had much higher status that were all still sitting on this board, but they’ve escaped scrutiny.

JAISAL NOOR Talk about what impact this has all had because we know that there was just a case of a Black woman who was turned out of the University of Maryland Medical Center last year. And we know with the minimum wage and a lot of these other policies, it’s people in the Black butterfly, working Black people, that are taking the brunt of, they’re feeling the brunt of these impacts more than anyone else by far.

LAWRENCE BROWN Right. Not only do you see Black patients being turned away, low-income Black folks not being able to receive care, but when she was State Senator, Catherine Pugh was pushing legislation to lower damages from people who would file cases like the lady who was turned away at the hospital. So if she was successful, then the lawsuit that that patient who was turned away would have filed, would have resulted in less damages, which would’ve protected the hospital. Not only that though, you have to look at the fact that eleven executives were making over $558,000 in income from the hospital. That’s over $5 million. If you cut their salaries in half, that’s $2.5 or so million that could have been used somewhere else, like our rec centers which have been cut, like our public school system which don’t have heat and AC. Their privatization allowed them to rake in not only contracts, but higher incomes for these executives. And now, those opportunity costs kick into gear. That’s money that we can spend somewhere else. Now there’s a push to actually get another $70 million from the state for this private nonprofit organization. Again, do they really need $70 million? What if they only need $50 million? If you cut the fat, if you cut out the corruption, that’s $20 million that can go somewhere else, like the places where we really need it here in Baltimore City. So it is not just the patients that are being hurt, it’s entire neighborhoods. It’s the entire city that’s being hurt. I think that’s the scope of this corruption that we have to really take a look at.

JAISAL NOOR We know Luke Broadwater of The Sun helped shed light on this, but it was originally a tip from Jill Carter who proposed legislation to scrutinize these deals, what the board members were getting. Despite everything that’s happened, the University of Maryland Medical System, it’s been reported, it’s pushing back on more transparency in its board and it doesn’t want to open up its minutes to the public, so we can get a full accounting of what is happening and how this is transpiring.

LAWRENCE BROWN Yeah. I think there was more initial resistance than there is now, but that is a question. Are they going to open up? They need to release their meeting minutes. We need to see who voted for these contracts because that’s where I bet you will see Miller and Busch or their representatives, playing a role and you won’t see that without those minutes. So if they’re really serious about transparency, release the minutes to the public so we can see who really a hand had, who really had their hand in the cookie jar. That’s what I’m pretty much interested in at this point. These corporations, not just the University of Maryland Medical System but Johns Hopkins which also gave donations to the mayor on the day the General Assembly, began to meet earlier this year which was January 9th. And they bundled together, nine of the administers from Johns Hopkins University bundled $16,000 to her campaign, if I’m not mistaken, to her campaign finances so that she could have that and then miraculously, the city says this is legislation we support, privatizing or having a private police force at Johns Hopkins University. Really, all the books, every politician’s books in Baltimore should be opened up at this point. All of the major corporations, in terms of if they’re sitting on the board, are they getting a side deal? What we know is that, there are serious issues in Baltimore and if corporations have their hands in the cookie jar, then they’re able to get policies that benefit them but at the expense of people that are lower income and those living in the Black butterfly.

JAISAL NOOR City Council President Jack Young, who is now acting mayor during this indefinite leave the mayor has taken— he said he wants to continue business as usual. He’s going to let the state handle this investigation. What are your thoughts on that?

LAWRENCE BROWN I think that’s insufficient. We can’t have business as usual. Baltimore, four years ago this month, had an uprising which signaled that we were in a state of emergency. We’ve stayed in a state of emergency with violence, with now infant mortality rising, with the opioid overdose crisis escalating and spiking, killing twice as many people as homicides do. Again, this is a city that’s in a state of emergency. We cannot continue in a state of business as usual. Something has to change. Our city government has to change and become a vehicle for the voice of the people. And I think, this is an opportunity for our city government to begin to make systematic, transformative changes and anything less is not going to cut it.

JAISAL NOOR Is there anything else you want to add?

LAWRENCE BROWN What we’re seeing in the city is really how powerful corporations have distorted and perverted our city government. I think every citizen ought to take real umbrage with that and they should really look at it. You know, on some level a lot of people already know that. A lot of people already feel like the game— If you look at David Simon’s The Wire, he talks about the game. That show illustrates through the analogy of chess how you have more powerful players in the game that push pawns and the pawns are the ones that get sacrificed in the show. That’s a powerful analogy for Baltimore. Pawns are getting sacrificed while the king, the queen, the bishops, the rooks, they’re getting off the hook. I want to understand, I want Baltimore to be able to understand, how the game is really being played so we can systematically take that game apart. We ought to be dismantling that game because too many lives are at stake. This is not a game. People are dying. We need to tear this game apart and make sure people have a real authentic voice. We can’t do that if corporations have their hands in the cookie jar.

JAISAL NOOR Finally, what do you say to people that might have voted for Catherine Pugh and seen her as a progressive reformer? Now, they might be in a situation where they’re like, everyone is the same. Change will never happen. Look at Baltimore. Four years after the uprising, nothing has changed and they withdraw from this political process. We see sometimes there’s twelve percent local participation in these elections. What do you say to them?

LAWRENCE BROWN Well I say it was the corruption that generated the twelve percent turnout. People were already checking out because they already understood that this was a system that wasn’t working for them. So I think for the people that voted for Catherine Pugh that thought they were getting a progressive, now’s the time for us to actually judge people by their actual record and to become much more informed. People throw that label “progressive” out all the time in this city and they don’t have a track record. They don’t have a track record of pushing for social justice. They show up at an uprising and act like they’re for the people, but they were voting for hospital bills that would have allowed hospitals to cut their damages if they committed malpractice against patients. That’s not social justice. When we look at people’s track records, have they actually consistently been on the streets with the grassroots pushing for systemic changes to dismantle Baltimore apartheid, to get rid of corruption? If they have been doing that, then don’t judge them or don’t assess them by the label they apply to themselves. I think that’s the type of rigor we have to apply to our political process, not just looking at labels. People campaign and say all kinds of stuff about themselves. Okay well, go and check their record. Had we done that, we would have been in a much better position. That being said, her opponent had also been convicted or had a scandal in office as well in the primary, one of her major opponents. We actually have to look ourselves in the mirror and ask ourselves, why are we comfortable with people who are adept at playing the game? Why aren’t we actually using more scrutiny— something we have to take some responsibility as voters to become, again, much more informed, much more engaged, and push these candidates, push our elected officials a lot harder. Again, we have to have a much more rigorous process because too many lives are at stake. I think that’s what’s going to help turn Baltimore around— more engaged, more rigorous electorate, and people that are pushing for real changes in this city.

JAISAL NOOR Alright. Dr. Lawrence Brown, Professor at Morgan State, scholar-activist. Follow you on Twitter @bmoredoc. Thank you, as always, for joining us.

LAWRENCE BROWN My pleasure.