The legislative panel probing controversial financial practices at the Maryland Environmental Service will hold its first public hearing in six months on Thursday afternoon.
Lawmakers are hopeful that Michael C. Harris, the quasi-governmental agency’s former finance chief, will be able to shed light on several matters — including the large severance payment that Roy McGrath received when he left MES to become Gov. Lawrence J. Hogan Jr.’s chief of staff last summer.
McGrath’s tenure as Hogan’s top aide ended abruptly in August, after just 11 weeks, following media reports that he received a year’s salary — $233,647 — when he voluntarily stepped down as the self-styled “CEO” of the agency to work for the governor.
When the report first surfaced in the Baltimore Sun, McGrath attempted to defend the payment, saying it was customary practice for MES and a reward, of sorts, for stellar performance. He also said Hogan (R) “anticipated” the payout, a claim the governor denied.
McGrath stepped down within days of the Sun story to avoid becoming a “distraction.”
The legislature’s Joint Committee on Fair Practices and State Personnel Oversight then began a formal probe of MES.
Members of the MES board of directors told lawmakers they felt queasy about the payment, but they went forward with it to avoid crossing an influential member of the governor’s team.
Lawmakers, particularly Democrats on the committee, expressed concern not only with the severance McGrath received, but also with the $55,000 in expense reimbursements he successfully sought as he headed for the exit.
Many of the expenses he incurred — for international travel, meals, posh hotels, executive trainings and boardwalk ice cream — struck the committee as excessive, particularly since nearly all of the service’s revenue comes from state agencies and local governments.
McGrath appeared to lawmakers to have broadly ignored MES policy for seeking reimbursement promptly, opting instead to submit hundreds of receipts at the tail end of his three-year stint.
The committee hopes that Harris, who served as treasurer on the MES board of directors, will be able to shed light on how McGrath was able to walk away with nearly $300,000 at a time when the pandemic was causing mass layoffs and a dramatic drop in government revenue.
“There are some questions about [Harris’s] involvement particularly with the expense report sign-offs for Mr. McGrath’s sizable expenses, and we thought it would be good to probe a little further with him,” said Del. Marc A. Korman (D-Montgomery), a member of the panel.
Ward B. Coe, the committee’s outside counsel, is also expected to press Harris regarding claims that McGrath and his handpicked director of operations, Matthew Sherring, sought to tweak the minutes of MES board meetings to obscure the board’s discussion of the six-figure severance.
Although the committee has not held a public hearing on the matter since December, Coe has been busy interviewing current and former MES staffers, including Harris.
The committee’s Senate co-Chairman, Clarence K. Lam (D-Howard), said Coe “has come across additional details and information that may not have been originally available during the first series of hearings.” He refused to elaborate.
Coe is expected to present a report, with recommendations, later this summer.
Hogan selected Frederic N. Smalkin, former chief judge of the U.S. District Court for Maryland, in January to serve as secretary of the MES board, and the legislature approved a measure earlier this year to reform the service’s day-to-day operations and restructure the board.
Hogan also created a new panel, the State Transparency and Accountability Reform (STAR) Commission, to look at all of Maryland’s quasi-governmental organizations. The commission is chaired by former state Sen. Andrew A. Serafini (R-Washington).
Korman serves on the STAR Commission and is supportive of its work, but he said there is also value in the legislature finishing the probe it began last summer.
“In the case of MES, I still think there is interest in some very particular wrongdoing that appears to have been done,” he said. “So it’s not so much a question of how to further reform MES, it’s how to make sure that we accurately understand what looks like pretty clear misbehavior that occurred and how it was done.”
The committee issued a subpoena to compel Harris to testify. Efforts to reach him and his attorney on Wednesday were unsuccessful.