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Schrader, Peters sue Md. treasurer over nonpayment of salary

Dennis Schrader and Wendi Peters

Dennis R. Schrader and Wendi Peters

Two of Gov. Larry Hogan’s Cabinet members are suing the state treasurer over her refusal to pay them.

Planning Secretary Wendi Peters and Health Secretary Dennis R. Schrader filed suit in Anne Arundel County Circuit Court seeking a declaratory judgement on their right to be paid.

Peters and Schrader, who were appointed by Hogan last year, had their nominations withdrawn during the legislative session. The legislature added language to the budget prohibiting the payment of any appointee who was subject to Senate approval but whose nominations were withdrawn before the full Senate could hold a vote.

State Treasurer Nancy K. Kopp announced last month that she would honor the budget language and not pay the secretaries.

Peters and Schrader have not been paid for any work days since July 1.

Hogan, speaking to reporters Thursday in Annapolis, said he “absolutely supports the lawsuit.”

“The attorney general gave both the legislature and our office the opinion that they’re legally serving in their positions so it would be illegal for us not to pay them,” Hogan said. “We believe the Senate president has been interfering with them getting paid. I believe they’re going to win this lawsuit and we’re going to get them paid. We can’t have people volunteering and doing the important work that they’re doing.”

When asked to elaborate on how Senate President Thomas V. Mike Miller Jr. was interfering, Hogan said: “Well, he’s the one that’s been behind the entire thing and got the treasurer to try to interfere with the paychecks, which she legally doesn’t have the right to do”

Deputy Treasurer Susanne Brogan said Kopp does not comment on pending litigation. With regards to Hogan’s comments involving Miller, Brogan said: “The treasurer tells me she has never spoken with President Miller about this issue.”

Miller, in an email, said Hogan doesn’t understand divided government.

“Like previous Executives in our history, both Democratic and Republican, Governor Hogan neither appreciates or understands the concept of divided government adopted by our forefathers and embedded in our Constitution with its carefully balanced system of checks and balances,” Miller said in a statement. “I eagerly look forward to a resolution of this issue in court. However, I cannot comment further as the attorney for the plaintiffs has represented both my family and myself, and continues to be on retainer with my law firm, a conflict that needs to be resolved before this case moves forward.”

Peters and Schrader were interim appointments to the departments of Planning and Health, respectively. Hogan later submitted their names to the Senate for confirmation but for different reasons later withdrew them.

Peters’ nomination was the first to run into trouble. The Senate Executive Nominations Committee voted to recommend that the full Senate reject her appointment. Hogan withdrew her name an hour later but gave no indication he would seek to replace her.

In response, the Senate added language to the budget a week later that restricted the governor from retaining appointments, even in an acting capacity, if the nominee was withdrawn before the Senate could hold a vote.

It was language that at the time was clearly focused on Peters.

Schrader, who was appointed last year, found himself in the same predicament as Peters after Hogan withdrew his nomination before a Senate vote could be considered, even though Senate leaders from both parties said the health secretary would be confirmed.

Douglass Mayer, a spokesman for Hogan, said the governor disagreed with comments on the likelihood of Schrader’s confirmation.

The lawsuit filed by Timothy F. Maloney,  a former delegate and partner at Greenbelt-based Joseph Greenwald & Laake, calls for the court to declare that Peters and Schrader were legally appointed, that the budget language violates the separation of powers doctrine and is unconstitutional, and that Kopp exceeded her authority in refusing to pay the pair.

Maloney argues that the language in the fiscal 2018 budget violates the state constitution as it creates a special law.

“The legislation has intentionally created a closed class of two, the plaintiffs, because it explicitly only applies to nominees prior to July 1, 2017 and 2016 recess appointees, who meet certain express characteristics,” Maloney wrote in the lawsuit. “The individuals who were nominated or appointed during this discreet past time is an immutable, historical fact. No other individuals can ever enter this class.”

Maloney argues that the legislature intended to discriminate against Peters and Schrader by depriving them of compensation available to other executive branch appointments.

Former assistant attorneys general who worked for the legislature or previous governors said recently that the legislature has wide powers to act to restrict how state money is spent. Restricting language is not uncommon or illegal under the state constitution.

Additionally, Maloney argues that Kopp has no constitutional authority to dishonor the comptroller’s payroll warrants which call for the pair to be paid.

Mayer said the state is not paying Maloney on behalf of the secretaries and that the lawsuit is not on behalf of the executive branch.

“As the attorney general has made clear, these secretaries are legally serving in their positions and the state has a legal obligation to pay them,” said Mayer. “The actions that are currently being taken to prevent these hard-working public servants from being paid are illegal, unconstitutional, and outrageous and the administration fully supports this lawsuit being filed.”

The attorney general, in two different advisories, said Hogan could legally reappoint secretaries whose names he withdrew before a vote. But in a separate advisory, the office said that the language in the budget barring the payment of Schrader and Peters was also legal under the Maryland Constitution.

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