Members of a Maryland agency’s board told lawmakers Tuesday that they didn't verify their former director's assertion that Gov. Larry Hogan approved of a six-figure payout to him when he left the position to become the governor’s chief of staff. Hogan has denied any involvement with the payout.
One board member of the Maryland Environmental Service testified that the board felt like they were between “a rock and a hard place” when Roy McGrath requested the money, because he was headed to “a very powerful position.”
“When Mr. McGrath asked for this, quite frankly, we were caught between a rock and a hard place,” Billy Addison, one of the board members, told the legislature's Joint Committee on Fair Practices and State Personnel. "It seemed as though we had no choice, as he was transferring to a very powerful position that could have a future impact on MES.”
McGrath became Hogan’s chief of staff June 1 after more than three years as head of MES. He received about $233,000, a year’s salary, and a tuition reimbursement of $5,250 when he voluntarily left to work for the governor in a position that paid about the same amount. McGrath resigned Aug. 17, two days after he defended the payout.
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“I want to make it very clear to all present today that I personally am not suggesting that the governor knew about this financial package,” Addison said, adding that McGrath “put this board in a horrible position with no good outcome.”
Joseph Snee, a board member, told lawmakers that McGrath “assured me that the governor was aware of the proposed severance payment and did not object.”
“With respect to the severance, again, we relied on a representation from the former director, and it was only upon his representation did we act," Snee said, adding that he also now doesn't think the governor's office was aware.
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McGrath did not attend the hearing, though he was asked to participate. In an op-ed in The Baltimore Sun, which first reported the payout, McGrath defended receiving the money. He noted that other executives at the board have received severance packages “over many years.”
“Leaving MES to work for the state meant I would lose around $120,000 in anticipated, future, bonus earnings,” McGrath wrote. “The severance helped to offset this expected loss and provided an additional, well-earned performance award.”
Lawmakers also questioned travel expenses. Sen. Clarence Lam, a Democrat who co-chairs the legislative oversight committee, noted trips McGrath took to Italy and Israel, as well as to Miami, Boston, New York, Las Vegas, Orlando and other places.
“There's certainly some concerning expenses that were brought up from Mr. McGrath's past travel and other purchases that raise questions that I think we want to ask as well,” Lam said.
Lawmakers, who plan to weigh legislation in the aftermath, also criticized the timing of the payout — as the state faces a fiscal crisis because of the coronavirus pandemic.
Earlier in the day, Hogan called for an audit and reforms.
Del. Erek Barron, a Prince George's County Democrat who co-chairs the oversight committee, said the case illustrates “something is clearly broken.”
“I appreciate the governor's call for reform of MES, but maybe we should consider reform of the political appointments system and process,” Barron said.
Hogan, a Republican, criticized the agency for the recently disclosed “practice of paying large bonuses, expense reimbursements, and severance packages to its top executives.”
“This is something no normal state-operated agency should or would ever grant,” Hogan said.
The governor also said he did not “approve, recommend, or have any involvement whatsoever in any of these decisions made by the board of directors of MES.”
“Our intention is to work with the legislature in a bipartisan way on legislation to reform the governance and operations of MES in order to provide for stronger oversight by both the executive and legislative branches,” Hogan said.
The independent state agency does environmental and public works projects, mostly for local governments and the state.