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State lawmakers subpoena Maryland Gov. Hogan’s former chief of staff as part of payout investigation

Maryland lawmakers voted Wednesday to issue a subpoena to Roy McGrath, the former chief of staff to Gov. Larry Hogan and former director of the Maryland Environmental Service. The lawmakers are investigating a six-figure payout that McGrath received when he left the environmental service to join Hogan's team, but McGrath has so far declined to testify.
Maryland lawmakers voted Wednesday to issue a subpoena to Roy McGrath, the former chief of staff to Gov. Larry Hogan and former director of the Maryland Environmental Service. The lawmakers are investigating a six-figure payout that McGrath received when he left the environmental service to join Hogan's team, but McGrath has so far declined to testify. (Pamela Wood)

For the first time in nearly 15 years, Maryland’s General Assembly is issuing subpoenas, as lawmakers say they must have testimony from Gov. Larry Hogan’s former chief of staff about a six-figure payout he received from his prior job at a state agency.

Following a methodical, 90-minute presentation, a legislative committee voted unanimously to subpoena Roy McGrath, the former director of the Maryland Environmental Service who served as Hogan’s top aide for 11 weeks this summer before his abrupt departure over the payout.

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The lawmakers also voted to subpoena Matthew Sherring, a longtime McGrath associate who was the director of operations at the environmental service. He left that position last month.

Lawmakers are increasingly frustrated that McGrath has communicated with reporters and on social media about his tenure at MES and the terms of his departure while declining invitations to appear before them and answer their questions.

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“The picture is not clear. We’re missing Mr. McGrath,” said Del. Erek Barron, a Prince George’s County Democrat co-leading an investigation into McGrath and the Maryland Environmental Service.

“It does seem to convey a troublesome pattern of disregard for accountability and oversight,” said Sen. Clarence Lam, a Howard County Democrat partnering with Barron to chair the investigation by the Joint Committee on Fair Practices and State Personnel Oversight.

McGrath declined to comment. His attorney, Bruce Marcus, said he wouldn’t comment in detail until his client’s subpoena is issued.

“We will obviously review it,” Marcus said. “Mr. McGrath is willing and available to address appropriate questions and, to the extent possible, present a full account of relevant events.”

Sherring did not respond Wednesday to email and voicemail messages seeking comment.

Lawmakers have been investigating the Maryland Environmental Service since The Baltimore Sun reported last month that McGrath — who was the governor’s chief of staff at the time — received a payout worth more than $238,000 when he left the agency to join the Republican governor’s team.

McGrath resigned four days after The Sun’s report.

The environmental service also reimbursed McGrath after he left the agency for more than $55,000 in expenses. Documents show he traveled extensively, billing MES for hotel stays as close as Annapolis and as far away as Israel. He also had the service pay more than $14,000 for a Harvard University online course this summer and earned tens of thousands of dollars in annual bonuses.

McGrath has told The Sun the travel was a necessary part of the job and the payouts and bonuses were customary at an agency that operates much like a private business.

As an independent agency, MES employees are not part of the regular state personnel system. The service sets salaries and benefits for its staff.

MES gets 95% of its revenue from local governments and state agencies, which hire the environmental service to carry out environmental and public works projects, such as operating landfills and sewage treatment plants.

At multiple fact-finding hearings by the joint committee, lawmakers have expressed their desire to hear from McGrath directly, believing only he can answer some key questions they have. Among them: How much did Hogan know about McGrath’s severance payment?

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The service’s former deputy director and three of its board members told lawmakers McGrath led them to believe Hogan supported the payout, which was described as “severance” even though McGrath left voluntarily.

Hogan has disputed that, saying he knew only generally that McGrath had financial issues to work out before joining the governor’s team.

Roy McGrath, in background, listens as Gov. Larry Hogan speaks during a news conference at the State House in Annapolis on April 15, 2020.
Roy McGrath, in background, listens as Gov. Larry Hogan speaks during a news conference at the State House in Annapolis on April 15, 2020. (Pamela Wood/The Baltimore Sun)

In advance of Wednesday’s hearing, Hogan sent a letter to lawmakers outlining suggestions for “systemic reforms” to the environmental service, such as either making the service a full-fledged state agency or selling it to the private sector.

Hogan also proposed reconstituting the MES board of directors so that the agency’s executives no longer serve on the board. The board is intended to oversee the operations of MES. Members currently are appointed by the governor or the MES director, a structure that leads to lack of oversight, Hogan said.

The governor also said the environmental service’s personnel policies, such as salaries and bonuses, “should be brought into line with those in place at state agencies.”

“Our bipartisan focus must be on addressing the systemic problems at the Maryland Environmental Service that require substantial legislative changes to its governance structure, oversight and management," Hogan said in a statement Wednesday.

Hogan also appointed retired Chief U.S. District Judge Frederic N. Smalkin to a seat on the MES board.

Lawmakers said they appreciated Hogan’s suggestions for reforms, but said they will press on with their investigation into McGrath’s leadership and the governor’s actions.

At Wednesday’s video meeting of the Legislative Policy Committee, senators and delegates making their case for the subpoenas coordinated a presentation that included videos, newspaper articles, emails and documents.

The committee, a bipartisan group chaired by the president of the Senate and the speaker of the House of Delegates, typically only meets once a year to approve the legislature’s budget.

After the presentation, committee members barely discussed the matter before all 24 members present voted for the subpoenas.

The subpoenas will be issued late this week or early next week, as the legislature needs to contract with independent lawyers to draft them. The General Assembly is typically represented by the state attorney general’s office, but that office also has lawyers representing the Maryland Environmental Service.

The subpoenas will order McGrath and Sherring to appear before the state personnel oversight committee within 30 days or on a mutually agreeable date. They also will order them to provide any documents legislators deem relevant.

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The last time the General Assembly used subpoenas was during the term of the last Republican governor, Robert L. Ehrlich Jr. Legislators investigated whether Ehrlich’s team — including Hogan, who was the appointments secretary — went too far in replacing state employees with loyalists. Hogan was among those subpoenaed in that investigation, and he testified that he did not coordinate firings across state agencies.

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The investigation ended without any finding of legal wrongdoing, but lawmakers eventually passed laws offering further protections for state workers.

“In some ways, it feels like déjà vu,” said House Speaker Adrienne A. Jones, a Baltimore County Democrat.

She said the legislation passed after the prior investigation "should have prevented what we are here to discuss today.”

Jones and Senate President Bill Ferguson said it’s clear more reforms are necessary, but they first need information only McGrath knows.

“Reform simply for reform’s sake is meaningless if we don’t know fully what is broken,” said Ferguson, a Baltimore Democrat.

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