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'I JUST PAID OFF THE VICE PRESIDENT'
July 1, 1999 By Jim Krane
NEW
YORK (APBnews.com)—Published for the first time today, an FBI file
on Spiro Agnew, the U.S. vice president who resigned from office
during a bribery scandal in 1973, provides new insights on the events
that abruptly halted Agnew's career 26 years ago.
"I just paid off the Vice President of the United States,"
one contractor is quoted in the files as saying to a friend shortly
after he gave Agnew $10,000 in a basement office of the White House.
According to the FBI report, the vice president also occasionally
returned a favor. After Agnew pocketed a $1,500 cash payment intended
as a campaign contribution, the giver told the FBI he was rewarded
by being invited to fly to Florida on the vice president's jet and
watch an Apollo moon launch.
During a political career that soared from the office of county
executive of Baltimore County, Md., to the state governorship and
on to the vice presidency, Agnew received tens of thousands of dollars
in kickbacks from firms awarded state contracts in Maryland, the
FBI file alleges.
Agnew, who died Sept. 17, 1996, at age 77, consistently denied the
allegations. He eventually pleaded no contest to tax evasion and
received probation, avoiding a jail term. Agnew never returned to
politics, living out his final decades in relative obscurity in
Ocean City, Md., and Palm Springs, Calif.
He was not the first vice president to face criminal charges or
resign from office—Vice Presidents Aaron Burr and John C. Calhoun
beat him to that—but Agnew was the first vice president to depart
in disgrace with a criminal record.
Four 'friends' brought him down.
The case against Agnew stemmed from a corruption investigation initiated
by U.S. Attorney George Beall, whose office in Baltimore struck
deals with four Agnew associates implicated in the kickback scam:
Jerome Wolff, an Agnew staffer and head of the Maryland Highway
Administration; I.H. Hemmerman, a Baltimore developer; and engineering
firm leaders Lester Matz and Alan Greene.
Beall, now a private attorney in the Baltimore firm Hogan &
Hartson, said Matz was the person that led him to Agnew. Beall said
Matz told him in a polygraphed interview that he'd given kickback
payments to Agnew in his offices in Baltimore and Washington.
Many comments in the FBI files have the names redacted, or blacked
out. But Matz is the likely source of the following exchange.
The unnamed source told investigators he personally handed Agnew
at least three payments, all in $100 bills. The first, a $20,000
payment in July 1968, was delivered to then-Gov. Agnew in his office
in Baltimore.
The second, after Agnew became vice president, took place in Agnew's
temporary office in the White House basement.
In a script of the polygraph examination contained in the FBI report,
the subject—probably Matz—admits paying off Agnew.
"During June 1968, did you personally give AGNEW $20,000 cash
in his office in Baltimore, Md.?" the report states.
"Answer—Yes."
"In February 1969, did you give AGNEW at least $9,500 cash
kickback in his office in the White House?"
"Answer—Yes."
Interestingly, said Beall, despite the FBI release of the files
on Agnew, the bureau was never involved in the U.S. attorney's investigation
and only learned of it as the scandal enveloping Agnew became public.
Maryland corruption
The report delves into the shady mechanics
of government contracting in Maryland in the 1960s, when the state's
farmland was being divided up for road and construction projects.
At the time, politicians commonly took a percentage of any state
contract awarded.
"That was standard operating procedure in Maryland politics
at the time," said Robert D. Loevy, a speech writer who worked
on Agnew's successful 1966 campaign for governor. "That's just
the way it was done then."
The FBI's file describes a system that flouted the state's competitive
bidding laws, allowing contractors to receive work as long as they
handed out cash to the proper officials.
"The standard pattern of alleged kickbacks involving various
local and state officials in Maryland and including Spiro Agnew
was to obtain 3 to 5 percent kickbacks for each contract that was
given to 'consulting engineers'," the bureau file states. "Consultants
do not have to make a bid according to state regulations and contracts
were awarded to those individuals who were willing to kick back
the designated amount."
Agnew's cut of graft increases
At first, the FBI documents show Agnew received a third of the
5 percent kickbacks on road construction and consulting contracts,
with the other two-thirds going to two other unnamed parties. But
as Agnew's power grew, he was able to take half of the kickback
fee, or 2.5 percent of the amount of the contract.
At one point in the file, another recipient
of the illicit fees told Beall's investigators that Agnew must have
received at least $75,000 because he himself had taken $35,000 to
$40,000.
"There were eight to 10 engineering firms contributing or kicking
back in this manner," the source told investigators. "[T]he
reason consulting firms were set up to kick back in the above- described
manner was because they did not have to submit a bid."
Attorney general's dismay
Another interesting nugget in the file
is a personal letter to Agnew from then-Attorney General Elliott
Richardson. In the Aug. 23, 1973, letter Richardson expresses dismay
at Department of Justice leaks on the investigation into Agnew's
receipt of kickbacks
and pledges to find and halt the source.
"There seems to be no fully effective means to stop the cynical,
speculative chain reaction of rumor and hypothesis that has been
all too evident in recent weeks," Richardson wrote. The attorney
general then advised Agnew that the Department of Justice and FBI
would investigate the incidents, which did not amount to a criminal
offense.
The file includes results of polygraph exams of Justice Department
staffers apparently conducted after Richardson's directive.
'Do what you have to do'
Beall said his office's investigations
into construction kickbacks in Maryland led him to Matz in April
1973.
"You probably don't want to know about this, but I've been
paying off the vice president of the United States," Matz told
Beall, perhaps figuring Beall—who was appointed by a Republican—wouldn't
care to prosecute a Republican vice president.
"But you have to do what you have to do," said Beall.
By May, Beall said his office had solid
evidence against Agnew. Beall said he kept mum about the investigation
until the appointment of Attorney General Richardson in June. After
Richardson was informed, Beall and his three assistant U.S. attorneys
quietly built the case against Agnew until The Wall Street Journal
broke the story in August 1973. Just two months later, on Oct. 10,
1973, Agnew quit.
News of Agnew's resignation came as a shock to many Americans because
the revelations were overshadowed by the simultaneous coverage of
the Watergate scandal enveloping President Richard Nixon, said Dean
Mills, a reporter at The Sun in Baltimore at the time, now dean
of the University of Missouri School of Journalism.
"His resignation came pretty quickly once his world started
to crumble," said Mills.
The disgraced vice president pleaded no contest to a single charge
that he had failed to report $29,500 of income received in 1967.
He was fined $10,000 and placed on three years' probation.
Related Websites
http://www.salon.com
http://www.yahoo.com/culture&society
http://www.ojjdp.ncjrs.org
http://usinfo.state.gov/usa/race
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