Gov. Lawrence J. Hogan Jr. (R) said on Thursday he was not aware of a hefty severance payment that his former chief of staff received when he left a taxpayer-funded job to lead the governor’s team this spring.
“It didn’t have anything to do with us,” Hogan told reporters in his first public comments on the matter. “I didn’t know anything about it.”
Hogan’s assertion that he “didn’t know anything” about the year’s severance that Roy McGrath received from the Maryland Environmental Service contradicts what McGrath, the former executive director of the organization, told board members at the quasi-governmental agency.
That lucrative payout — $233,647, plus tens of thousands of dollars in travel and tuition reimbursement — has drawn criticism from the legislature, which held a hearing on the matter this week.
McGrath left MES in May to become chief of staff to Hogan on June 1. He resigned 10 weeks later.
A lawmaker involved in the General Assembly’s scrutiny of the severance called Hogan’s attempts to distance himself from Maryland Environmental Service governance “inaccurate.”
The MES is a state-created body that does environmental works projects, mostly for county and local governments. Nearly all of its revenue — 95% — comes from tax revenue.
Del. Marc Korman (D-Montgomery), a member of the Joint Committee on Fair Practices and State Personnel Oversight, noted that MES voted on McGrath’s severance request just three weeks after a May 7 warning from Hogan that the state faced a dire fiscal crisis.
“At the same meeting where this severance was approved, earlier in the meeting there was discussion of the fiscal circumstances we were facing,” Korman said. “Did the board not recognize that we were in a fiscal crisis — to say nothing of an economic recession and a global health pandemic on May 28?”
Board members acknowledged they were aware of the damage the COVID-19 pandemic was doing to the economy, but they approved the severance McGrath requested because he assured them that he “anticipated” Hogan’s sign-off.
McGrath offered similar assurances to his then-deputy, according to text messages legislators have obtained.
McGrath’s salary as chief of staff was $233,648, almost identical to his base MES salary. Top officials at MES receive bonuses for performance, board members told lawmakers.
On Tuesday Hogan issued a statement saying he “did not approve, recommend, or have any involvement whatsoever in any of these decisions made by the board of directors of MES with respect to the former director Roy McGrath or any other individual.”
His comments at Thursday’s press conference were a more direct rebuttal of McGrath’s assurances to the board.
Hogan said that when he asked McGrath about the severance — after getting wind of it from his legal counsel — McGrath assured him that 12-month payouts were common practice at MES. “That was what I was entitled to. It’s what they’ve always done,” McGrath told Hogan, according to the governor.
Because MES is overseen by a separate board, it operates differently than a state agency.
“They’re not part of the normal executive branch,” Hogan said. “I had no idea about any of it.”
Korman characterized Hogan’s comments as “inaccurate” because governors select the majority of the MES board and its executive director, subject to state Senate confirmation.
In office since 2015, Hogan either appointed or reappointed a majority of the MES board and he chose McGrath to be its leader.
“The governor controls the management and governance of this state entity,” Korman said on Thursday evening.
A Baltimore Sun story about the severance payment ran on Aug. 13. Very soon after, the governor’s staff got wind of other issues, including 18 months’ worth of travel receipts, totaling approximately $55,000, which McGrath submitted as he was preparing to become chief of staff, including trips to Italy, Israel and the Disney Leadership Institute in Orlando.
Among the expenses for which McGrath sought reimbursement were two ice cream sundaes purchased at Dumser’s in Ocean City in June 2019 ($10.22, plus $1.11 tip and $0.67 tax) and parking expenses of $1 and $1.38.
The Monday after these matters surfaced, Hogan called McGrath in and his aide promptly stepped down as chief of staff, the governor said.
“As soon as we heard some of these details, we addressed it with him. And soon as further concerning things came out, he resigned immediately,” Hogan told reporters during a State House news conference. “First day we addressed it with him, within 20 minutes, [he] decided to resign.”
McGrath did not respond to a reporter’s request for reaction.
The legislative committee is scheduled to hold another hearing on the matter next Wednesday.