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May 19, 2023

Affidavit sheds new light on when and what ex

Former Republican Maryland Gov. Larry Hogan knew about his former chief-of-staff

Former Republican Maryland Gov. Larry Hogan knew about his former chief-of-staff Roy McGrath's six-figure severance payment from the government-owned nonprofit Maryland Environmental Service almost two weeks before it became public in 2020, according to newly obtained court documents.

While The Baltimore Sun previously reported that McGrath told Hogan about the payment several days before the newspaper first reported it, a newly revealed affidavit from Hogan shows exactly when the former governor says he was made aware of the payment, as well as the concerns about it, and when he went to McGrath for an explanation about it all.

The severance package eventually served as the basis for parallel state and federal criminal corruption cases against McGrath, who died in April while running from authorities after absconding from trial. While a federal investigation related to McGrath continues, documents obtained by The Sun related to his closed state case under a Public Information Act request offer new context about the allegations — and mirror issues that might have come up in court.

"The affidavit confirms that what governor Hogan has said publicly since 2020 matches what he also said privately," Hogan's personal attorney Chris Mencher said in a statement. "Once concerns were expressed on Aug. 2, governor Hogan immediately ordered an internal investigation that continued through to Mr. McGrath's departure."

The affidavit did not mention an internal investigation, though it said Hogan was surprised by the amount.

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)

As scrutiny about McGrath's conduct at the environmental service grew, Hogan and his top aides denied that the governor knew the full details about how McGrath's $233,000 severance came about when The Sun first revealed the payment to the public in August 2020. The court records, however, show a different timeline — one where Hogan was made aware of the concerns around the payment weeks before and how seemingly little official action was taken until The Sun's story was published.

On or about Aug. 2, 2020, Joseph Snee, a board member of the environmental service, called Hogan's chief counsel, Michael Pedone, "to express concerns about" McGrath's severance, according to Hogan's affidavit.

Hogan's affidavit, sworn under the penalty of perjury, states that Pedone then called Hogan and let him know about the severance payment, and that the board was under the impression that Hogan was aware of it when the body approved the payment that May. That conversation with Pedone was the first time Hogan became aware of McGrath's severance, according to the affidavit.

Snee told The Sun in an interview Wednesday that he explicitly told Pedone during that Aug. 2 phone call that McGrath had conveyed to the environmental service's board that Hogan had approved and expected the severance payment. Snee, an attorney, chaired the board's human resources committee, which approved McGrath's severance. He said he told Pedone he believed McGrath had "misrepresented" Hogan's approval.

"The only reason that the HR committee acted on [the severance] was Mr. McGrath's representation that the governor approved it," Snee said Wednesday.

Snee did not explain why it was not until two months after the board approved the payment that he had the feeling that McGrath had not been fully transparent.

A 2020 report by a joint legislative committee investigating the matter said that Pedone asked Snee during an early August call why no one from the environmental service checked with the governor's office to make sure Hogan approved the payment.

Pedone, who is an attorney at Venable LLP, did not respond to a request for comment for this article.

According to the governor's affidavit, Hogan met Aug. 3, 2020, with McGrath, who told him that the Maryland Environmental Service board approved the severance and that there was precedent for it.

It's not clear from the affidavit that any further internal action was taken until McGrath's resignation Aug. 17, four days after The Sun revealed the payment.

Hogan said in late August 2020 that he and McGrath met earlier that month and that McGrath told him his version of how the severance payout originated.

Federal and state prosecutors in October 2021 charged McGrath with fraudulently creating the severance package as he prepared to leave the environmental service for the governor's office.

Prosecutors said he misled the service's board to believe Hogan approved of the payout. McGrath also allegedly embezzled state money for personal purposes, such as making a donation to an Eastern Shore art gallery, and illegally recorded calls between the governor and his top aides, according to court documents.

Court records show Hogan was slated to testify as part of the federal government's case against McGrath.

Joseph Murtha, McGrath's lawyer, said he doubted Hogan's account of the events as the governor described them in the affidavit, specifically when he knew what.

"The thing that amazed me about this case was that the board of directors voted and approved the severance and we’re to believe that Hogan didn't know anything until Aug. 2 until Pedone let him know about this," Murtha told The Sun. "It is inconceivable that that time could’ve passed and he would’ve had no knowledge."

In November 2021, McGrath provided screenshots of messages between him and Hogan, including one where the Republican governor wrote: "I know you did nothing wrong. I know it is unfair. I will stand with you."

Roy McGrath, chief executive officer of the Maryland Environmental Service, speaks during a news conference at the State House in Annapolis on April 15, 2020. (Pamela Wood/AP)

McGrath said the messages were sent between Aug. 13, when the first Sun story about the severance published, and Aug. 17, when McGrath resigned. Hogan's office verified the messages but said in November 2021 that they were sent before Hogan knew the full details of the severance.

"At that point, the governor was reserving judgment until all the facts came to light, and that fact-finding is what led to the resignation," a former spokesperson said then.

However, Snee's comments, coupled with the legislative investigation, show Hogan's office was aware Aug. 2 why the board of the environmental service approved the payment.

Murtha said he planned to question the governor about that as part of the trial defense.

"I think there were a lot of questions about the governor's position that he knew nothing about it, came to Roy's defense in a Wickr message, and then turned his back when the pressure from the media and then the legislature became overbearing," Murtha said. "If the governor is an individual who measures his words carefully, it was interesting that he sent such a supportive message to Roy McGrath when he purportedly didn't have all the information."

Hogan attached to his affidavit a text message exchange with the person who preceded McGrath as chief of staff, Matthew Clark.

"How in the hell do you get a severance for a lateral transfer within state service?" Hogan texted Clark three days after McGrath resigned.

Clark could not be reached for comment Wednesday.

Murtha has questions about the governor's Aug. 20, 2020, text.

"What happened in the intervening 17 days? He's told on the second [of August] about the severance and he acts surprised," Murtha said.

Context offered in the newly obtained court documents offer insight into what would have come up at McGrath's trial, which was set to begin in March.

But McGrath never showed up to court. His absence prompted the presiding judge to issue a warrant for his arrest and federal agents to embark upon an extensive search to bring him into custody.

After about three weeks on the run, he died in what the FBI described as an "agent-involved shooting" in a parking lot outside Knoxville, Tennessee.

Roy McGrath was fatally shot during his arrest in Tennessee as the FBI closed in, ending a three-week fugitive search for former Maryland Gov. Larry Hogan's ex-chief of staff. (Saul Young/News Sentinel)

Federal authorities have said little about the circumstances of the shooting or what led them to McGrath in Tennessee.

"I think there's a lot of inconsistencies here that, unfortunately, are not going to be cleared up now because no one has to take the stand to answer questions," said Sen. Clarence Lam, a Democrat representing parts of Howard and Anne Arundel counties, on Wednesday.

Lam co-chaired the General Assembly's Joint Committee on Fair Practices and Personnel Oversight, which investigated the Maryland Environment Service's practices following McGrath's resignation.

"This is ultimately a question of he-said-he-said, and the other party that could have been called forward was the governor," Lam said of the legislative hearings investigating the agency.

However, Lam explained that it would have been "very difficult politically" to call the governor to testify.

"It has been made clear that had it not been for the story breaking, it was not clear if the Hogan administration would’ve taken any action," Lam said Wednesday.