This story was updated with new information on August 25 @ 6:00 p.m.

Maryland Gov. Larry Hogan and Democratic state lawmakers are calling for an audit of the Maryland Environmental Service after the agency paid out more than $233,000 to an executive director who was leaving his post for a job in the governor’s office.

Roy McGrath left his role at MES, an independent state agency, to work as Hogan’s chief of staff, but he resigned last week after details of the severance package were made public. The package included his annual salary of $233,647, as well as tuition reimbursement, a cell phone, and a laptop, according to a Baltimore Sun report.

In a statement on Tuesday, Hogan wrote that MES has a longstanding practice of providing large payouts to their top executives. “This is something no normal state-operated agency should or would ever grant,” he said.

MES is a quasi-governmental agency that provides operational and technical services to protect the environment. The agency’s board members are appointed by the governor, and the state’s Office of Legislative Audits conducts regular oversight of MES. Hogan, though, is now asking the state’s Department of Budget and Management to conduct an audit of the agency, as well as for legislators to conduct their own independent audit.

“Our intention is to work with the legislature in a bipartisan way on legislation to reform the governance and operations of MES in order to provide for stronger oversight by both the executive and legislative branches,” Hogan wrote.

Sen. Clarence Lam (D-Howard, Baltimore counties), co-chair of the Joint Committee on Fair Practices and State Personnel Oversight, agrees there should be greater oversight of the agency. He and other members of the committee are meeting Tuesday to question MES board members about McGrath’s payout. McGrath declined to attend the meeting.

Lam said he is also worried about the repercussions of the agency doling out large severance packages during a time when the state is concerned with saving money.

“When [McGrath] left [MES] in May, I think we were all aware that we were in the middle of a pandemic and that there would be significant economic challenges that the state would be facing with our budget,” Lam told DCist/WAMU Tuesday.

In a virtual meeting of the committee on Tuesday, former and current MES board members told lawmakers that McGrath misled them to believe that Hogan approved of the severance package and ultimately, led them to vote in favor of the proposed severance.

“We were caught between a rock and a hard place,” Board Member Billy Addison said. “It seemed as though we had no choice as he was transferring to a very powerful position that could have a future impact on MES.”

Lam and his co-chair Delegate Erek Barron (D-Prince George’s County) said it seemed like the MES’s executive director had a level of control over board members.

“No one reached out to the governor’s office inquire and confirm what Mr. McGrath was relaying to all of you even though he had a vested interest in seeing the severance payment proceed?” Lam questioned board members.

Board members said they failed to ask Hogan’s administration directly if McGrath’s severance was allowed and they took him “at his word.”

The committee’s lawmakers presented emails and text messages exchanged between McGrath and Beth Wojton, MES’s deputy director at the time, that explained the severance proposal and McGrath insisting that Hogan was OK with the payout.

Wojton resigned and took a severance package which amounted to her salary of roughly $209,000. In 2016, former MES Director Jim Harkins retired from the agency with a severance package of approximately $257,000.

However, Hogan wrote Tuesday that he had no knowledge of the severance payment.

“To be clear, I did not approve, recommend, or have any involvement whatsoever in any of these decisions made by the board of directors of MES with respect to the former director Roy McGrath or any other individual,” he wrote.

McGrath did not respond to requests for comment on these allegations.

Board members also contend that they did not have a severance policy in place and McGrath was not under contract. The audit will also look into McGrath’s travel expenses and other finances during his tenure with the agency, as well as other financial processes.

Under the direction of interim Executive Director Charles Glass, MES is conducting their own independent audit of their finances. Glass says he also asked two members of the board to leave because of this incident and split the role of the board treasurer and financial manager into two.

“Moving forward I want to ensure that MES upholds the highest levels of public trust,” Glass told committee members. “I welcome the oversight of this joint committee and any other legislative committees that would like to evaluate the policies of MES.”

Those comments fly in the face of a press release McGrath asked Glass to write following the release of the Baltimore Sun article.

“While the full severance payment to Mr. McGrath was not contractually required, it was offered as a well-earned compensation package for having led the organization to its best financial and operational year in our history,” the release said.

Glass said McGrath had a hand in writing the release. That was confirmed by lawmakers who presented text messages that were exchanged between Glass and McGrath.

McGrath contends that “zero tax dollars were used” for his severance package, and that the size of the payout is “a standard business practice,” according to a private Facebook message obtained by DCist/WAMU.

“In most operations, senior executives are entitled to such benefits upon their departures, even more so when they grow a business by $16 million in the past year, as I did,” McGrath wrote in the message.

Lam said he is skeptical of McGrath’s explanation and wanted to hear more from MES board members at the personnel oversight committee meeting.

“For him to walk away with such a large severance during a pandemic when the state is already facing severe economic hardship is unconscionable,” he said. “Either McGrath misled the entire board of directors or Hogan’s statements are incorrect.”

During the committee meeting, Lam said he’s considering legislation for the 2021 session that would work to address the structure of MES’s nine-member board and issues pertaining to conflicts of interest.

Glass told Lam he would have no problem removing himself from the board, relinquishing control of three board members, creating term limits for board members, and needing approval from state legislators for board positions.

“I support a completely independent board of directors so that parties can always vote their conscience,” Glass said. “It’s the best construct for a board.”

MES isn’t the first quasi-governmental agency in Maryland to have issues with its board of directors. In 2019, University of Maryland Medical System’s chairman and two other board members resigned after it was revealed that multiple members, including ex-Baltimore City Mayor Catherine Pugh, had conflicts of interest that went undisclosed.

This story was updated with new information about the committee hearing Tuesday.