Not long after Serena McIlwain left the California Environmental Protection Agency to become secretary of the Maryland Department of the Environment, the agency announced that she was joining the public policy board for Veloz, a California nonprofit that advocates for electric vehicles.

And in February 2025, the department sent $25,000 to the nonprofit, in order to join its EV campaign as a supporting member.

That payment drew the attention of Maryland auditors recently. And when they came knocking, MDE couldn’t provide any written documentation showing that it had analyzed the benefits to the state before issuing the money for the membership.

“The lack of this documentation combined with the management employee serving on the public policy board for the organization is the basis of our finding and raises concerns about the propriety of the payment,” auditors wrote.

It was one of several issues raised in an audit of MDE that was released Thursday. The audit also identified shortcomings with the agency’s lead inspection program, delays associated with inspections of polluting facilities and X-ray machines and a possible ethical violation by a management employee.

The department is pushing back against several of the auditors’ findings, including those about Veloz. MDE argues that there are no standards in place for Maryland agencies considering certain memberships, of which the state environmental agency has 27, according to a spokesman.

Maryland could have identified fraudulent lead inspections sooner, auditors say

McIlwain’s participation on the board received sign-off from the State Ethics Commission in 2023, and the agency conducted a “rigorous internal review” of the $25,000 payment before deciding to issue it, the agency says. In response to the audit findings, the department stated that it has developed a new membership evaluation form for administrators to use when deciding whether to join, rejoin or exit an organization.

Further, the decision to join Veloz has been beneficial to Maryland, which has ambitious greenhouse gas reduction mandates, the agency said in response to questions from Maryland Matters prior to the audit’s release.

“Our membership in Veloz has been a productive opportunity to expand our marketing capabilities in order to educate Marylanders about the benefits of electric vehicles to improve air quality and save money on upkeep,” read the statement from the department. “This has given us access to technical support, focus groups and upwards of $1 million in advertising assets.”

Auditors expressed concern that MDE misrepresented the nature of the payment during their evaluation. When auditors requested information about the payment, staffers at the environmental agency stated that the payment “was for MDE to be included in a national marketing campaign to promote the use of electric vehicles.”

“This explanation was not consistent with the invoice, which indicated the payment was to become a supporting member of the organization,” auditors wrote.

It isn’t clear what access to the advertising materials the department gained because of its $25,000 contribution. Veloz has produced a series of advertisements that have appeared nationally on television, social media and other avenues, extolling the benefits of EVs. One ad spot, an animation comparing an EV and a internal combustion engine, is voiced by actor Nick Offerman of “Parks and Recreation” fame. Veloz did not immediately respond to a request for comment about the audit Thursday.
Maryland Sen. Clarence Lam (D-Howard and Anne Arundel), who sits on the Joint Audit and Evaluation Committee, said that it seems as though auditors “identified a gray area where departments can perhaps skirt ordinary procurement guidelines by entering into membership agreements with outside organizations.”

“There should be a clear benefit to the state — I think that’s a little bit gray in this instance,” he added.

Auditors also noted that the payment was only ever approved by a subordinate to McIlwain.

Internal emails, obtained by Maryland Matters prior to the audit’s release, showed that agency employees pressed their colleagues to process the payment quickly.

“The Secretary needs this to be completed,” one staff member wrote.

One staffer suggested that MDE may need to follow a sole-source procurement procedure to issue the money. But a deputy to the secretary pushed back, arguing that it was a membership fee and not a payment for services, and therefore did not need to undergo competitive bidding.

That same staffer specifically requested that Veloz characterize the payment as a membership.

“We would likely need to frame our $25,000 support as a membership due … We would need an invoice for the membership due and then would work to adjust the letter language accordingly to reflect that relationship,” the deputy wrote.

The payment came from Maryland’s Strategic Energy Investment Fund, according to Jay Apperson, an MDE spokesperson. That fund, which has burgeoned in recent years — and been tapped by lawmakers several times to fill state budget gaps — is funded by the utilities, and therefore the ratepayers, to support renewable energy.

Maryland is not the only state that has joined Veloz as a member. Other  government entities, including New Jersey’s Department of Environmental Protection and the California Energy Commission, are also members, according to the organization’s website, as are private companies including BMW, Uber, Ford and Waymo.