Baltimore Mayor Catherine Pugh

Loyd Fox/Baltimore Sun via AP

FBI, IRS agents search Baltimore mayor's homes, City Hall

April 25, 2019 - 2:41 pm
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BALTIMORE (AP) — Federal agents raided the homes and offices of Baltimore's embattled mayor on Thursday amid widening probes to determine whether she used sales of her children's books to disguise government kickbacks.

The searches pushed the latest political scandal for Maryland's largest city to a crescendo after weeks of uncertainty and mounting pressure for Mayor Catherine Pugh to step down. Maryland's governor joined calls for her resignation shortly after news broke of the raids, as agents with the FBI and the IRS criminal division carried boxes of evidence out of City Hall. Agents also searched her homes, her lawyer's office, the home of an aide and a non-profit organization she was involved with, said Dave Fitz, an FBI spokesman.

Before she slipped out of sight more than three weeks ago, Pugh held a hastily organized press conference where she called her book deals a "regrettable mistake."

For years, Pugh had been selling her self-published children's books to entities she was involved with as a lawmaker and later as mayor. She sold $500,000 in "Healthy Holly" books to the University of Maryland Medical System, on whose board she sat, while pushing legislation that would have benefited the $4 billion hospital network. She also made $300,000 in bulk sales to health carriers that did business with the city, and to a Maryland financier.

The federal case comes amid a criminal investigation by the state prosecutor's office, which began at the request of Republican Gov. Larry Hogan, as well as probes by the Baltimore Inspector General, a city ethics board and the state insurance commission.

Related: As Baltimore struggles, latest scandal sucks away attention

"Mayor Pugh has lost the public trust. She is clearly not fit to lead," Hogan declared in a statement Thursday. "For the good of the city, Mayor Pugh must resign."

City Council member Brandon Scott reiterated the council's unanimous demand for her resignation, calling the spectacle "an embarrassment to the city."

Pugh remained silent Thursday morning. Her spokesman, James Bentley, said he hadn't spoken with her and doesn't know where she is. Her defense attorney, Steve Silverman, whose office also was searched, did not immediately return calls.

City Solicitor Andre Davis said City Hall is cooperating fully with federal investigators.

Before Pugh went on paid leave, citing deteriorating health from a pneumonia bout, she said "I never intended to do anything that could not stand up to scrutiny." Six of her staffers joined her on paid leave; three of them were later fired by the acting mayor.

Pugh disappeared from public view the same day Hogan asked for the investigation of her "Healthy Holly" book sales, which earned about $800,000 for her limited liability company. Since then, the first-term mayor also has been asked to resign by all the Baltimore lawmakers in Maryland's House of Delegates, the influential Greater Baltimore Committee business group and others.

Maryland's chief accountant called Pugh's "self-dealing" book deals "brazen, cartoonish corruption."

But only a conviction can trigger a mayor's removal from office according to the state constitution, and Baltimore's mayor-friendly City Charter provides no options for ousting its executive. "The charter is utterly silent on how long the leave can last, exactly what the reasons are for a leave," Davis said.

Pugh's communications staff said repeatedly she intends to return to City Hall when she is feeling better, without giving a timetable.

At this point, political analysts said, Pugh's biggest bargaining chip is her refusal to resign in a city accustomed to a high-drama, insular political culture.

Pugh came to office in late 2016 after edging out ex-Mayor Sheila Dixon, who had spent much of her tenure fighting corruption charges before being forced to depart office in 2010 as part of a plea deal connected to the misappropriation of about $500 in gift cards meant for needy families.

While the accusations have certainly cast a shadow over Pugh, she has not been indicted for any crime, and it is unclear how long a criminal investigation will take. Earlier this month, Silverman said the mayor was looking forward to cooperating with the state prosecutor's probe and would provide "as much information as possible to put this matter to rest."

Pugh would certainly face a bruising 2020 Democratic primary if she were to return and run for reelection. Many political observers believe she'll never again be able to wield power effectively due to the scandal.

Veteran City Council leader Bernard "Jack" Young, who is serving as acting mayor, said as she went on leave that he would merely be a placeholder. But this week, given the groundswell of opinion against her, he said "it could be devastating for her" if she tried to return.

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