“I know you did nothing wrong. I know it is unfair. I will stand with you,” Hogan wrote to his former aide in the undated message after it was publicly revealed in mid-August that McGrath received a $233,647.23 severance package from Maryland Environmental Services, which became the basis of a federal and state indictment.
Michael Ricci, a spokesman for Hogan, acknowledged that Hogan sent the message to McGrath but said it was before the governor learned more details about how the severance package was obtained.
While McGrath has maintained that Hogan knew of and approved the severance, the governor, who is cooperating with law enforcement and has not been accused of any crime, has repeatedly denied knowledge of the hefty payout before he brought McGrath on as his chief of staff on June 1, 2020.
McGrath was indicted last month on nearly three dozen federal and state charges, including wire fraud and embezzlement, largely stemming from the nearly quarter-million severance prosecutors say he encouraged the MES board of directors to approve by “falsely telling them that the Governor was aware of and approved the payment.”
McGrath, whose next appearance on his state charges is Dec. 17, has repeatedly denied wrongdoing. In state court, his charges include felony theft, misconduct by a public official and violating Maryland’s wiretap laws by recording private calls with Hogan and other state officials without their permission.
Ricci said Hogan’s message to McGrath was “consistent with what the governor has previously said, which was confirmed by yearlong federal and state investigations.” He said the governor was “reserving judgment until all the facts came to light, and that fact-finding is what led to the resignation.”
At an Aug. 27, 2020, news conference on an unrelated topic, Hogan said his counsel told him three weeks earlier about “some concerning news about some questions about things at MES. I was concerned when I heard some of it.”
Hogan said he called McGrath, who told him that it was “normal practice, every director who has left there gets a year’s severance . . . guy who was there for a year got it, the previous guy got it, the previous one, this is common. They do this all the time. I was like, ‘Wow, I had no idea.’ ”
McGrath provided The Post a screenshot of the message Hogan sent him and a copy of a memo dated May 18, 2020 — two weeks before McGrath was to start as Hogan’s top aide — that broadly spells out what McGrath says was a confidential agreement between himself and Hogan.
The memo, which McGrath said he drafted himself and presented to Hogan for approval, is on plain paper, with a “To: Hogan” above “Re: Employment agreement — Roy McGrath, Start Date: TBD.”
It notes McGrath’s salary of $233,647.23 and “other compensation” as a severance package from MES. It does not give an amount for the severance and notes the terms, including length of service (through January 2023), telework as needed and that it was “cancelable upon mutual agreement.”
There are two boxes on the memo — one labeled “Approved” and one labeled “Disapproved. Needs further discussion.” The “Approved” box contains a blue check mark.
Ricci said the memo was “a complete fabrication.” He said Hogan had never seen the memo until state prosecutors showed it to him.
“This is a complete fabrication,” Ricci said. “And [it] bears no resemblance to the memos or documents submitted to the governor. There is no ‘from’ line. Political appointees do not have ‘mutually cancelable’ agreements.”
He said all documents related to personnel hiring are processed by the Governor’s Office of Financial Administration, not by the governor himself.
McGrath says that the memo was strictly between him and the governor, and that Hogan had “nonchalantly approved it with his customary blue check mark.”
In his first media interview since he was charged, McGrath, who now lives in Florida, said his loyalty to Hogan and the governor’s message caused him to initially remain silent as questions mounted about the severance package and his tenure at MES.
In the message to McGrath, Hogan appeared worried that the Democratic Party was “going to try to tear us down on this thing” and wanted his senior adviser, Ron Gunzburger; his chief legal counsel, Michael T. Pedone; Ricci; and his chief legislative officer, Keiffer J. Mitchell Jr., to develop a strategy to address what he said was “not a legal concern but a media coms political pr one particularly in a pandemic as we are taking away 3% raises furloughing and laying off people. Govs chief of staff. Businesses closing and 500K unemployed.”
He described a call by the presiding officers to launch oversight hearings a “legislative witchunt.”
“Mike [Ricci] thinks will be a continuing press story,” Hogan wrote. “Keiffer [Mitchell] thinks legislators going to try to make it a bridge gate,” referring to a scandal that affected the presidential ambitions of fellow Republican and Hogan friend, former New Jersey governor Chris Christie.
McGrath said he resigned as chief of staff, a job he held for less than three months, because of the governor’s “written promise to ‘stand with’ me.”
“However, after my resignation, to my shock and dismay, over the course of three news conferences that followed my departure, his story shifted each time he was asked about it.” McGrath wrote in a draft of a book he’s penning about his experience, “Operation Enduring Friendship: A Maryland Politician’s Legacy of Lies and Deception.” “Ultimately, he finally failed to keep his promise to me and, instead, he misled everyone. He hung me out to dry.”
Hogan ended the private message with “we need our team to have all the facts so they can all help us circle the wagons and fight back.”
McGrath said he has been advised by friends not to go public but, he wrote, “speaking up is the only option I feel that I have, despite the risks that come from angering those who have been calculatedly destroying my life. The truth needs to be known.”
A long history
Shortly after Hogan won the 2014 gubernatorial race, the newly elected governor tapped McGrath, a business executive and political donor mostly known in Republican circles in Southern Maryland, as his deputy chief of staff. He called McGrath a “trusted adviser,” who had a hand in helping to build his new administration.
Hogan would turn to McGrath on several more occasions. In 2016, he appointed him to take the helm at MES, saying “there was no one better suited” to lead the agency, which helps local governments finance waste facilities and other infrastructure projects. And, last year, in the throes of the pandemic, the governor asked McGrath, whom he called a “leader with a proven track record . . . and a passionate commitment to public service,” to take one of the most powerful positions in state government as his chief of staff.
When he got his first job in Hogan’s administration, McGrath was one of the few appointees who knew Hogan as a young congressional candidate in the early 1990s.
McGrath served on the Hogan for Congress committee, helping the then-real estate businessman in his unsuccessful bid to unseat Rep. Steny H. Hoyer (D-Md). At the time, McGrath was head of the Charles County Republican Central Committee. The two would meet again in 2014 when McGrath, who was working as vice president of business development and conventions at the National Association of Chain Drug Stores, volunteered and donated to Hogan’s gubernatorial campaign. That year, he gave $4,000 to the Republican State Central Committee for the governor’s race. From June 2017 to January 2019, while working at MES, he contributed $5,250 to Hogan campaign accounts.
Caught off guard
To McGrath’s former colleagues in the statehouse, McGrath was a consummate administrator. He was meticulous, strait-laced, the type of person who always played it by the book.
But prosecutors paint a different picture of the 52-year-old native Marylander. They say he was a fraudster, an embezzler and a thief.
In interviews with 20 current and former state government and statehouse officials who worked with McGrath as he came up in Maryland politics, almost all said they were caught off guard by the news of his severance package and excesses in spending. They described him as being a straightforward, formal and, at times, stiff colleague who focused on work and did not seem to have outsize political ambitions.
Sen. Adelaide C. Eckardt (R-Dorchester) said she met McGrath as he got involved in the Republican Party in the 1990s. Like Hogan, she said, he was known as “a business person who participated in party activities” and had a reputation for being task-driven. The allegations described in the recent indictment against him “seemed out of character from how I knew him,” Eckardt added.
Len Foxwell, the former chief of staff to Comptroller Peter Franchot (D) who has known McGrath for decades, said he “came across a supremely ethical . . . a detail-oriented public servant, who was in it for all the right reasons. He was someone who recognized that he was in Annapolis and in the administration to ensure that taxpayer dollars were being spent efficiently and appropriately.”
McGrath didn’t have many allies, his colleagues said, but didn’t draw many enemies either.
“He was a bit of a loner, and his personality was kind of awkward,” said a former statehouse official who spoke on the condition of anonymity because of the ongoing investigation. “Corruption wasn’t something that anybody expected ahead of him. And it wasn’t just me; nobody pegged him as that guy.”
Before news of his severance package was made public, there was chatter in the statehouse and state government about his extravagant expenses at the state agency, current and former officials said.
During oversight hearings that the legislature held last year, lawyers produced documents showing that McGrath used MES dollars to fund conferences, luxury hotels and posh dinners. He allegedly used MES funds to “enrich himself personally,” according to prosecutors, including by submitting false time and attendance reports when he was on vacation and using agency funds to pay a personal pledge to a museum where he served on the board of directors.
In addition to the over $230,000 payout, McGrath allegedly asked a subordinate to authorize a payment of $14,475 for a program at Harvard Kennedy School. McGrath attended the program after he left MES.
“He seemed to think he was running a private sector company when he was really running an organ of the state of Maryland and its people,” said Del. Marc A. Korman (D-Montgomery), who served on the oversight committee.
McGrath, who pleaded the Fifth Amendment when asked to testify about the use of the funds, maintains that he did nothing different from other executives at MES regarding expenses and said he brought in more work to the agency, which led to additional bonuses for employees across the department.
McGrath began his career in public service at 18, when he became a member of the Republican Party and later formed a Young Republicans club in Southern Maryland.
“There is no higher calling than public service . . . and I have always approached it not as a matter of party loyalty, but as a Marylander first,” McGrath said in a statement when he resigned.
Among other things, lawmakers focused on what Hogan knew about McGrath’s tenure at the environmental agency and his exit payout.
In emails at the time, he would defend his spending, describing it as a strategic investment that paid off for the agency.
But he publicly remained silent about what he says was Hogan’s sign-off on his severance. He sent a text message to Hogan — which became part of the documents made public during the hearings — imploring him to come to his defense.
“Can you please say something about us discussing severance? That it was okay for me to handle with MES,” McGrath texted the governor the morning after the committee’s first hearing.
“Only what we agreed. Without your support, it looks like I misled MES,” the text continues. “I did not. I’ve been one of your loyalist supporters from the beginning. Never asked for anything, but need your help now, please.”
The governor never responded.
“I found myself between a rock and a hard place; I was fearful of upsetting the most powerful person in the state of Maryland,” McGrath said in an interview. “I was fearful of what the implications would be trying to speak up against a very popular governor and staff who were on board with the unfair treatment of me after I chose to leave.”
McGrath, who was Hogan’s fourth chief of staff in five years, did not have outsize influence over Hogan. He didn’t serve as a political strategist or confidant. None of the three chiefs of staff before him did either.
“There were a few people who the governor leaned on a lot in his decision-making, and I didn’t get the sense that Roy was one of those people,” said one former state government official who worked closely with McGrath while he was Hogan’s deputy chief of staff. The former official spoke on the condition of anonymity, citing the pending investigation.
While McGrath is not accused of any wrongdoing during his time working alongside Hogan, Sen. Paul G. Pinsky (D-Prince George’s) said Hogan should bear the responsibility for putting him in his positions.
“If it doesn’t hurt Hogan, it should,” Pinsky said.
During a recent news conference, Hogan refused to respond to Pinsky and other Democrats who have questioned his appointments of McGrath.
Foxwell said based on the details released by prosecutors, however, the alleged infractions are contained to McGrath, not Hogan or his administration.
“There will be those who will suggest that Hogan was either complicit or simply inattentive to what was going on,” he said. “To the best of our knowledge, he took quick steps to cut ties with Roy and head off any possible damage.”