It was January 9, 2017, just days before Gary Brown Jr. was set to be sworn-in as the newest member of the Maryland House of Delegates, representing West Baltimore’s 40th District.
Knowing that the political wheels had been greased for him, the boyish-looking aide to Baltimore’s new mayor, Catherine Pugh, was acting brash and talking boastfully, a political insider recalled.
“I said to him, ‘Gary, why do you want it,’ and he said, ‘Just cause I wanna be a delegate.’ The position was like a toy to him.”
On his Facebook feed, the 35-year-old high school graduate was all smiles, picturing himself with “my mentor @MayorPugh50” and proclaiming that “2017 is gonna be great!”
The Maryland Democratic Central Committee had nominated Brown to fill a vacancy in the legislature created by Pugh’s mayoral victory.
But embarrassing news broke that day – Brown had been indicted by the state prosecutor for making illegal contributions to Pugh’s campaign fund.
Brown never became a state lawmaker. But he remained at City Hall, working as a “special events coordinator” in the mayor’s public affairs office and, we now know, as Pugh’s bagman, collecting tens of thousands of dollars from the sale of the self-published “Healthy Holly” children’s books Pugh aggressively hawked to local nonprofits and individuals.
In short, 2017 – followed by 2018 and the first quarter of 2019 – turned out to be “great” for the mayor’s loyal sidekick.
“You’ll be Okay”
The depth of Brown’s corrupt relationship with Pugh was made plain in Pugh’s 34-page indictment released Wednesday, leading to her guilty plea on Thursday to federal tax evasion and conspiracy charges.
But plenty of information about Brown’s role with his boss was made public and reported long before. He pleaded guilty in May 2017 to illegally funneling $18,000 to Pugh’s campaign fund through the names of three family members.
When the charges against Brown were first revealed only weeks after Pugh took office in December 2016, the new mayor feigned surprise, releasing a written statement that she had “just learned about the charges along with the public.”
She denied knowing where Brown got the campaign money and soon was dismissing the matter as “a glitch,” offering this explanation: “I didn’t handle the funds. That’s not my job.”
Prosecutors: Pugh picked the law firm that Brown hired, assuring him that he would be okay because the attorney there would “take care of him.”
Now we know – from the “Stipulation of Facts” Pugh signed Thursday as part of her guilty plea – that she gave $18,000 in Healthy Holly funds to Brown to make the “straw donations” in his family members’ names.
After her campaign was caught by state prosecutors, Pugh promised to return the $18,000 to the family members but, instead, used the money to “pick the law firm that Brown hired, assuring him that he would be okay because the attorney there would take care of him.”
That law firm was Murphy, Falcon & Murphy headed by William H. “Billy” Murphy Jr., a prominent Pugh supporter during the 2016 mayoral campaign.
Led by then partner Jason Downs (now an attorney in Washington, D.C.), the Murphy firm collected “multiple payments totaling approximately $18,000” – in effect, Healthy Holly money reportedly returned to donors – to handle the Brown case.
The Stipulation of Facts notes that Brown stayed silent, refusing to tell state prosecutors where he got the $18,000:
“Brown did not cooperate with investigative authorities in the state prosecution and state authorities were unable to identify Healthy Holly as the source of the funds for the straw donations,” the Stipulation of Facts states.
A plea bargain was arranged, and Brown pleaded guilty to two election law violations. What could have been a year in jail and $25,000 in fines turned out to be a slap on the wrist – one year of supervised probation imposed by Circuit Court Judge Charles J. Peters.
Brown returned to City Hall to do what he had done before and during Pugh’s mayoral campaign – launder money.
So Brown went back to City Hall to do for Pugh what he had done before and during her mayoral campaign – launder money.
Drawing up fake documents and phony invoices, Brown helped Pugh divert more than $300,000 that the University of Maryland Medical System (UMMS) and other donors had contributed for the production and distribution of Healthy Holly books to Baltimore school children.
And to evade income taxes, Brown created at Pugh’s direction a paper trail to establish a “fictitious business relationship” between his company, GBJ Consulting, and Pugh’s publishing business, according to prosecutors.
During the same period when Brown was running afoul of campaign laws, Pugh was reporting $64,325 in bogus payments to Brown’s company, which substantially reduced her income taxes.
No One Spoke Up
Brown used his time as a Baltimore City employee to shuttle thousands of Healthy Holly books to various locations that suited the mayor’s efforts to “double-sell” books that were originally stored in a city facility on Pulaski Highway.
“Sometimes, Brown enlisted the help of other city employees to remove and transport the books,” the Stipulation of Facts notes. “On other occasions, Pugh paid associates of Brown to remove and transport the books.”
No city employee, no public official, no charitable donor and no campaign worker apparently called out what the U.S. Attorney’s Office now calls a “criminal enterprise.”
Books that were the property of Baltimore City Schools – and paid for by UMMS – found their way to Pugh’s office in City Hall, to her home in Ashburton, to the War Memorial Building, to Brown’s Eutaw Place apartment, to Brown’s City Hall office, to a public storage locker and to Pugh’s government-issued vehicles.
Yet over these months and years, no city or school employee, no charitable donor and no campaign worker apparently stepped forward to expose what the U.S. Attorney’s Office now describes as a “criminal enterprise.”
No City Council member or other public official spoke up to question why the mayor had kept a person convicted of a blatant campaign law violation on her staff, installed in an office on the same floor as hers.
And no one in the Maryland Democratic Party hierarchy prevented the spectacle of Brown – allowed to remain a member of the 40th District Central Committee – casting a vote for the person (Nick Mosby) who would get the House seat that Brown would have snagged save for his indictment.
Phantom Books? No Problem
As Pugh pressed ahead, drumming up more orders for her books often through Associated Black Charities and its executive director, Diane L. Bell-McKoy, “Brown oversaw the logistics of storing, accessing, transporting and delivering the books,” the government’s fact document said.
How did Brown – whose annual city salary rose from $46,920 to $62,220 (32.6%) between 2016 and 2018 – spare the time?
The fact document offers this answer: “Much of Brown’s work on behalf of Healthy Holly occurred during work hours while serving as Pugh’s legislative aide and mayoral staff member.”
He was not alone.
In one incident in October 2017, Pugh got a commitment by the community health director of Kaiser Permanente to pay $14,000 for 2,000 copies of Book Four, Healthy Holly: Vegetables are not just Green.
The conversation between the mayor and the Kaiser director happened just one month after the Board of Estimates, controlled by Pugh, awarded Kaiser Foundation Health Plan a $48 million contract to provide medical coverage to city employees.
Eager to seal the deal, “members of Pugh’s mayoral staff sent an email to [Kaiser] discussing how the company could get copies of the book,” the prosecutors say.
Most of Brown’s scheming took place during his working hours at City Hall.
Brown quickly followed up with an invoice for $14,000, which Kaiser paid with a check that Pugh personally deposited on November 30. But prosecutors say the 2,000 copies of Book Four were never delivered to Kaiser.
Despite this lapse, Kaiser continued to pay for more phantom books offered by the mayor. (For the record, Kaiser says its contracts with the city had no bearing on its commitment to providing literature that promotes healthy lifestyles.)
In the words of the federal prosecutors:
“On or about October 22, 2018, Brown emailed a new invoice to Kaiser seeking $25,000 for an unpublished Healthy Holly book to be titled Healthy Holly: Walking with My Family is Fun (Book Five). On or about November 20, 2018, not realizing that Book Four had not been delivered, Kaiser sent Pugh a $25,000 ACH payment to Healthy Holly’s bank account to pay for 4,000 copies of Book Five. Pugh and Brown never delivered copies of Book Five to Kaiser.”
As it turned out, this was one of the last major Healthy Holly deals conducted by Brown before federal agents swept down on his private apartment and City Hall office last April, leading to his dismissal by acting Mayor Bernard C. “Jack” Young.
On Wednesday, it was revealed that Brown has pleaded guilty to conspiring with Catherine Pugh to fraudulently sell and distribute Healthy Holly books.
The 38-year-old now faces a maximum of 20 years in federal prison for wire fraud and additional time for tax evasion and conspiracy to defraud the United States.