BALTIMORE _ The Baltimore Board of Ethics voted unanimously Wednesday to open an investigation into whether Democratic Mayor Catherine Pugh's sale of her "Healthy Holly" children's books violated city ethics rules.
The five-member board voted after receiving a letter March 28 from Associated Black Charities, which described five groups that donated a total of about $87,000 to the organization to purchase 10,000 copies of the books.
The groups are a health insurance company, a quasi-governmental Maryland agency, two investment firms and a foundation started by a bail bondsman.
Ethics board chairwoman Linda Pierson led the meeting by orchestrating a vote to release the letter from Associated Black Charities that detailed a series of six transactions between 2011 and 2016. The charity told the ethics board in its letter that it would return nearly $10,000.
The Office of the State Prosecutor is also investigating Pugh's sales of her self-published series, her lawyer has confirmed. Pugh last month amended several years of ethics disclosure forms filed with the state to report that she owns Healthy Holly LLC and that she sold 100,000 books to the University of Maryland Medical System over the past eight years for $500,000, while she was on the medical system's board of directors.
The mayor's office announced Monday that she was taking a leave of absence to recover from pneumonia.
The Associated Black Charities letter described its purchases between 2011 and 2016, a period when Pugh served as a state senator (she became mayor in December 2016).
One of the organizations, CareFirst BlueCross BlueShield, confirmed in a statement to The Sun that it gave Associated Black Charities a total of $14,500 in 2011 and 2014 to pay for 2,000 of the Democratic mayor's "Healthy Holly" books. The charity kept $2,000 and paid the rest to Healthy Holly LLC.
The four other groups are:
_ The Maryland Automobile Insurance Fund, a state-established organization for hard-to-insure drivers. The fund said it gave $7,500 to Pugh's Healthy Holly LLC in 2012 for books. It donated another $5,000 in 2013 to Associated Black Charities when the nonprofit was soliciting funds to buy the books to give to African American children. ABC spent nearly all the money on books.
_ Frederick Frank Family Trust Foundation, a charity established by the late founder of the Fred Frank Bail Bonds company. It donated $50,000 for 5,000 books. The charity kept $5,000 and paid $45,000 to Pugh's company.
_ Grant Capital Investment, a real estate financing company headed by J.P. Grant, donated $14,000 that Associated Black Charities used to buy 2,000 books. The charity kept $2,000 and paid Healthy Holly LLC $12,000.
_ Ariel Investments donated $3,680 for 400 books. All of the money went to Healthy Holly LLC.
Between Jan. 8, 2009, through Jan. 6, 2019, four of the five donors were big campaign contributors to Pugh's campaigns for state Senate and mayor, according to Maryland Board of Elections campaign finance records.
Columbia financier Grant, his wife, his son, a company controlled by another son and an executive at his company have given Pugh $29,000 since 2016.
Regarding his Associated Black Charities contributions, Grant said his company gave the charity money several times, but he didn't know his money would be spent to buy the books.
"When I donate, it's not restricted," Grant said.
Grant said his company gave the nonprofit $20,000 in 2007; $14,000 in 2011; and donations of $5,000 in 2012 and 2017.
CareFirst BlueCross donated $11,025 from 2009 through May 2018.
M. Kent Krabbe, the former executive director of the Maryland Automobile Insurance Fund, donated nearly $10,000 from 2008 until March 15, 2016.
The auto insurer's contributions were made while Krabbe was its executive director, said Mark McCurdy, MAIF's new director. Krabbe became a paid staffer on Pugh's mayoral campaign in 2016 and served that year as president of her inaugural committee. After Pugh took office as mayor, he started a $107,000-a-year job at the city's department of transportation. He left that post in 2018.
Krabbe could not be reached for comment.
As a state senator from 2007 to 2016, Pugh sponsored legislation praised by MAIF. A 2013 news release on the organization's website about the start of a new kind of insurance plan said Pugh sponsored the legislation "that made this day possible."
"I am excited for this great opportunity for all of those in Maryland who find themselves in need of MAIF and can now get a policy at a reasonable rate," Pugh was quoted in the release as saying. "It makes our seven years of fighting worthwhile for the citizens of Maryland."
Krabbe was quoted thanking Pugh for her work on the bill in another release.
"We thank all of the sponsors of Senate Bill 930. In particular, we would like to thank Senate Finance Committee Chairman, Senator Thomas "Mac" Middleton of Charles County and Senator Catherine Pugh of Baltimore city for their leadership and support of this bill, as well as their advocacy for Maryland drivers in need of a more affordable alternative for their insurance premiums," Krabbe said.
Calls to Ariel Investments and the Frank Foundation were not immediately returned.
The Maryland ethics commission's executive director, Michael Lord, would not comment about whether the state panel also received a filing from Associated Black Charities about the Pugh books, but said the state commission's members can use any information they receive as a potential complaint and consider whether to investigate it.
