Board members defy O'Malley, quit

By Tom LoBianco (Contact) | Thursday, August 28, 2008

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EXCLUSIVE:

This month's mass resignations of 10 board members from the University of Maryland Medical System came after the board defied a specific appeal from Gov. Martin O'Malley to place his favored candidate in charge of the $1.9 billion operation.

Mr. O'Malley urged the board members in a letter obtained this week by The Washington Times to elect the board's chief financial officer, Bob Chrencik, as the system's new chief executive officer just days before the board instead offered the job to John P. McDaniel, a former MedStar Health chief executive officer.

"I endorse Bob Chrencik as the logical, interim CEO," Mr. O'Malley, a Democrat, wrote in the July 29 letter to members of the 27-seat board. "He represents our best hope for a person to take the reins. I thank you for taking my perspective into account."

After the narrow decision in favor of Mr. McDaniel, Mr. O'Malley's appointments secretary Jeannie Hitchcock called some of the board members to say their services were no longer needed, board member Gary Jobson said in an interview.

"She said: 'The governor has decided not to continue your service to the board and the people of Maryland. As of today, you are no longer a director,'" Mr. Jobson said. "The vote was not acceptable to Governor O'Malley. So he stepped in and let his voice be heard. That's the reason why so may trustees decided they could not continue to serve."

The friction boiled over in a closed-door meeting on Aug. 20, when Chairman John C. Erickson resigned after reaching an agreement with Mr. O'Malley. Nine other board members - who had turned up after receiving legal advice that the dismissals were not binding - resigned in protest of Mr. O'Malley's interference. The remaining members rescinded the job offer to Mr. McDaniel and offered the post instead to Mr. O'Malley's preferred choice, Mr. Chrencik.

The internal turmoil roiled a medical system that maintains a network of hospitals across eastern Maryland and trains many of the state's doctors. It is one of the largest private employers in Maryland.

It also prompted accusations of improper interference with a board that was set up 25 years ago in part to insulate the system from political interference after years of poor management.

The O'Malley administration did not return repeated calls Wednesday about the governor's letter to the board members.

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