Legislative Panel Issues Blistering Report of McGrath’s Management Practices at Maryland Environmental Service

Editor’s note: This article has been updated to include a comment from the House Speaker and a statement from McGrath’s attorney.

A legislative committee investigating the tenure of Roy McGrath as head of the Maryland Environmental Service issued a withering report Thursday, suggesting McGrath flouted state personnel rules, received tens of thousands of dollars in questionable reimbursements, and mischaracterized the details of a lucrative bonus arrangement he negotiated as he was leaving the agency.

The report by the General Assembly’s Joint Committee on Fair Practices and State Personnel Oversight comes as McGrath prepares for pending federal and state corruption trials. McGrath left the MES in 2020 after 3 1/2 years to serve briefly as chief of staff to Gov. Lawrence J. Hogan Jr. (R), resigning that post weeks later after details of his $233,000 severance package emerged in the Baltimore Sun and drew lawmaker scrutiny.

McGrath has been accused of misleading state officials, including Hogan, and MES board members about the terms of his severance deal. McGrath has maintained that Hogan signed off on his payment before he became chief of staff — a contention that the governor denies.

The legislative panel’s 82-page report describes McGrath as an imperious boss at MES who was obsessively image-conscious, was a poor communicator to underlings in the agency, and played favorites, usually keeping in close contact only with staffers he brought on while ignoring most everyone else. The report focuses particularly on his relationship with Matthew Sherring, the agency’s director of finance, who became a frequent travel partner of McGrath’s.

The investigation, which came with 1,600 pages of supporting documents, called on MES, a quasi-government entity that handles major infrastructure projects for other government agencies, to initiate a civil lawsuit against McGrath to recover some of the losses from his profligate spending and reimbursements.

Senate President Bill Ferguson (D-Baltimore City) called the personnel committee’s report “deeply troubling on all levels.”

“Mr. McGrath’s conduct and flouting of long-established rules and policies to enrich himself and loyal friends is beyond the pale of what we expect of our public servants,” he said.

Broadly speaking, the legislative report provides new information about allegations concerning McGrath’s leadership at MES that were first made public in the summer of 2020. The panel opened its investigation in August of that year.

“Our investigation and report,” the committee says, “document the following:

• potential financial fraud by the former MES Director;
• substantial financial abuses in incurring expenses, which were of no benefit to MES and, in some cases, designed only to benefit the MES employees (Mr. McGrath and Mr. Sherring) incurring the expenses; and
• a rogue hiring system at MES where the former director’s friends and associates were hired outside of the normal process into high-paying positions to serve the former director, not the organization.”

McGrath has denied wrongdoing. In a Facebook post last fall, he asserted that “politically-motivated bullies originated this twisted mess.”

The report lays out some of the particular allegations against McGrath in exquisite detail.

In 2017, just weeks after taking over the MES, McGrath earned $241,702, the committee found. In 2018, his salary was $262,549, and a year later, it was $281,166. The next year, it was $342,392 — though when he left to become Hogan’s chief of staff, his salary became $233,000 a year.

During his 3 1/2-year tenure as head of the agency, McGrath billed MES for at least $169,306 in expenses for his activities, the report said. His two immediate predecessors, each of whom served for 11 years, incurred reimbursable expenses of $15,923 and $17,963, respectively.

“McGrath’s expenses were often of no apparent benefit to MES and frequently violated MES policies,” the legislative panel wrote.

He took 96 overnight trips during his time as director — and Sherring accompanied him on about half of them. The report also detailed minor expenses, like a $1 reimbursement for a parking meter in Annapolis, a $3.70 reimbursement for the purchase of an Elmer’s Glue Stick at a CVS Pharmacy, and a $4.38 reimbursement for a hot fudge sundae in Cumberland.

McGrath is facing federal charges of wire fraud and misuse of government funds. In court filings, prosecutors allege that McGrath misrepresented his compensation to Hogan and the Maryland Environmental Service’s board of directors, recorded phone calls between top public officials without consent, claimed work hours during vacations and directed state funding to a Talbot County museum where he sat on the board.

A corresponding state indictment also accuses McGrath of misconduct and of illegally recording conversations between himself and other public officials. The federal trial is tentatively scheduled to begin on Oct. 24. The state trial had been scheduled for June 7, but it’s expected to be pushed to next March when McGrath and his attorneys make a scheduled court appearance on May 31.

McGrath’s attorney, Joseph Murtha, issued a statement in response to the report on Friday, a day after it was released.

“The biased report continues the shameful political persecution of Mr. McGrath, a highly respected, successful and ethical professional who led his former organization to the greatest success in its history,” the statement said. “It is based on interviews with only a handful of employees, who worked with Mr. McGrath, out of nearly 850. It is filled with erroneous and misleading assertions, largely driven by a few of these cherry-picked, disgruntled  employees. It entirely ignores the most important facts about Mr. McGrath’s success, leading the organization to focus, modernize, and develop record numbers of new projects that benefited Maryland’s environment and created tens of millions in new revenue and hundreds of new jobs.”

In response to the allegations about McGrath’s leadership of MES, the legislature in 2021 passed the Maryland Environmental Service Reform Act of 2021, which changed the management structure and oversight of the agency.

“We will continue to hold state officials to the highest ethical standard because Maryland taxpayers deserve better,” House Speaker Adrienne A. Jones (D-Baltimore County) said Thursday.

Republish