Update August 17 at 6:04 p.m.: Maryland Gov. Larry Hogan’s new chief of staff, Roy McGrath, has resigned amid controversy over the six-figure severance package he received after departing his previous position as head of the Maryland Environmental Service.

“It is with regret that I have accepted Roy McGrath’s resignation as chief of staff,” Hogan said in a statement Monday, “Roy has been a deeply valued member of our administration, and our state is better for his dedicated service.”

The governor named chief legislative officer Keiffer J. Mitchell Jr. as acting chief of staff, effective immediately. Mitchell was a state delegate from Baltimore between 2011 and 2015.

“Keiffer is a widely respected leader who has served our administration with distinction since day one,” Hogan said.

After the Baltimore Sun reported on McGrath’s payout — which includes a year’s salary of more than $230,000 — state lawmakers promised to investigate. Maryland Senate President Bill Ferguson and House Speaker Adrienne Jones said news of the payout “truly shocking.” Both McGrath and the Maryland Environmental Service defended the severance package as standard practice.

McGrath’s departure comes less than three months after he assumed the post as Hogan’s top aide on June 1. He said he was “humbled” to have been tapped for the role would step aside to avoid causing a distraction.

“For me, this entire topic is simply the sad politics of personal destruction, and right now, we cannot afford unnecessary distractions from the critical work the governor and his team are doing,” he said in a statement Monday, “For this reason, I have advised the governor that I am exiting state service.”

McGrath said he would to return to the private sector.

Original story:

Maryland Gov. Larry Hogan’s new chief of staff, Roy McGrath, was paid a six-figure severance package when he voluntarily left his former position as director of the Maryland Environmental Service. The Baltimore Sun first reported the news.

McGrath has defended the payment as “a standard business practice,” but state lawmakers in Annapolis are pledging to investigate.

McGrath left his former job to join the governor’s office in June, and was granted a package that included a year’s salary — $233,647 according to budget records obtained by the Sun — tuition reimbursement, a cell phone, and a laptop. According to the Sun, the department’s Board of Directors approved the package at a May 28 meeting, whose minutes confirm the decision.

McGrath replaced Matthew Clark as Hogan’s top aide and according to the paper, he receives a $233,000 salary. Clark left to become a senior vice president in the University of Maryland Medical System.

The Maryland Environmental Service is an independent agency that oversees more than 1,000 environmental projects and services across Maryland and the Mid-Atlantic region, according to its website. The agency doesn’t receive direct operations funding from the state budget, but does receive federal grants and funds from local and county governments. The organization’s director is appointed by the governor and confirmed by the state Senate.

In a Facebook post, McGrath called the Sun’s reporting on his severance package a “rush to judgement” and said no tax dollars were used in his payment, the Sun reports.

“We’ll put the other facts out soon enough, but I say thanks to my friends who didn’t jump on the fact-less bandwagon today,” McGrath wrote on Facebook. “I remain focused on my public service job and will not be drawn into the distraction of other’s toxic partisan politics.”

The Maryland Environmental Service also defended the payout in a statement, calling it “a well-earned compensation package for having led the organization to its best financial and operational year in our history.”

The agency said it has a “private sector-like pay structure” and largely competes for staff with other private companies, as opposed to state agencies.

News of McGrath’s payout has created a stir in Annapolis. Maryland Senate President Bill Ferguson and House Speaker Adrienne Jones called the news of the payout “truly shocking” in a statement Friday. They called for an oversight hearing on why the severance package was allowed, who reviewed it, and “what constraints should be put in place to prevent this from happening at any quasi-State agencies in the future.”

On Saturday, the co-chairs of a joint legislative oversight pledged to investigate McGrath’s payout, Maryland Matters reports.

“The quarter million-dollar, taxpayer funded ‘severance payment’ to Maryland Environmental Services’ former executive director raises serious questions about the judgement of its Board of Directors and its gubernatorially appointed members,” the lawmakers, Sen. Clarence Lam (D-Howard) and Del. Erek Barron (D-Prince George’s) said in a statement.

“MES’ Board of Directors is controlled by the Governor and several board members reported to Mr. Roy McGrath when he was the MES executive director and board chair. This arrangement raises potential conflicts of interest, particularly when the severance package is designated for the Governor’s incoming chief of staff,” wrote Lam and Barron, who lead the Committee on Fair Practices and State Personnel Oversight.

Lawmakers are also pushing back on the notion that the MES operates like a private company.

“It doesn’t pass the sniff test to say this is completely a private, nonprofit entity when almost all of their funding is coming from contracts that occur with state and local governments,” Lam said, according to the Sun.

Governor Hogan’s office did not respond to a request for comment.

This isn’t the only financial dealing that has raised eyebrows in recent weeks. On Thursday, the Sun’s editorial board slammed the state school board’s decision to grant Superintendent Karen Salmon a $40,000 pay raise in the midst of a pandemic and budget deficits.

Sunday, Aug. 16 at 9:02 a.m.: This story was updated to include McGrath’s response to criticism of the severance package and comments from the co-chairs of the Maryland General Assembly’s Committee on Fair Practices and State Personnel Oversight.