Agnew took hundreds of thousands of dollars in contractors' kickbacks Envelopes filled with cash given to him in his office detailed in 40-page report

When Spiro T. Agnew arrived in the dark-paneled fifth-floor courtroom in the old Federal Courthouse on Calvert Street on Oct. 10, 1973, no one anticipated what was coming: resignation as vice president and a plea of no contest to tax evasion.

As part of the plea agreement that spared Agnew a prison term, U.S. Attorney General Elliot L. Richardson read a 40-page exposition detailing how Agnew had extorted hundreds of thousands of dollars from government contractors -- cash in white envelopes -- while he served as Baltimore County executive, governor of Maryland and vice president.


"He built a career on the taking of bribes," an unforgiving former prosecutor, Barnet D. Skolnik, said yesterday in the wake of Agnew's death Tuesday at 77. "If you get caught with your hand in the cookie jar, that's what you'll be remembered for."

Agnew's criminality was straightforward: I'll see that you get a lucrative engineering contract; you give me 5 percent in cash, and we'll both be happy.


When Agnew became county executive in 1962, Baltimore County was a rapidly expanding, wealthy suburb with a tradition of a freewheeling political culture that embraced deal-making as an art.

In his new position, Agnew for the first time met high rollers with money to spend, something he had never had.

According to the government case against Agnew, unnamed "close associates" told him how business was done in Baltimore County, and they passed the word to engineering consultants eager for work just how they might obtain it.

The engineers understood; the "close associates" began collecting the cash-filled envelopes and contracts were placed with them.

When Agnew was elected governor in 1966, he wasn't going to change a winning system. The only difference was that state contracts were bigger.

With the help of a few close associates, particularly wealthy developer I.H. Hammerman II and Jerome B. Wolff, chief of the state highway department, the cash for contracts continued, according to federal investigators. Payoffs for past favors continued even after he was elected vice president in 1968.

In one part of the federal exposition, Lester Matz, the engineer who had been paying off Agnew since county days and who first implicated Agnew in the corruption investigation, described a visit to the new vice president's office.

Matz had calculated how much he still owed Agnew for state contracts to his firm.


'Handed him an envelope'

"He met with Mr. Agnew, showed him the calculations and briefly reviewed them for him. He then handed him an envelope with $10,000. Mr. Agnew placed this envelope in his desk drawer," the exposition said.

Although that was a straight payoff, various schemes were considered to conceal money still being paid after Agnew left the State House, including as "legal fees" to be paid after Agnew left office or as "loans."

Matz also detailed a $2,500 payoff in spring 1971 on behalf of a small company in which his firm had an interest.

"Matz placed an envelope containing the $2,500 cash on the vice president's desk. When he left the meeting, the envelope had not been removed from the desk, but moments later Matz re-entered the office and noticed that the envelope was gone."

In early 1972, during the Nixon-Agnew re-election campaign, Matz received a call from a "close associate" seeking a $10,000 contribution. Matz declined. The "close associate" continued to press, so Matz complained to Agnew, who told him to say that "he gave at the office."


In other incidents cited in the 40-page plea agreement, Wolff and Hammerman described their solicitations from engineers, which they wanted to split three ways with Agnew. But the governor demanded 50 percent, with Wolff and Hammerman to get 25 percent each.

While Agnew was governor, according to the federal document, seven engineering companies were solicited and agreed to make kickbacks. An eighth firm refused, and as a result had its share of state business reduced.

Another participant in the kickback scheme was engineer Allen Green, whose company enjoyed a good share of state work.

When it was suggested to Green that Agnew could use help with the new financial burden of the governorship, Green agreed to pay. He told federal investigators that he delivered envelopes containing from $2,000 to $3,000 cash six to nine times a year.

'Hoped to be ... helpful'

After Agnew became vice president, he complained of even more financial burdens and told Green that he "hoped to be able to be helpful" in awarding federal engineering contracts.


Green continued to pay Agnew $2,000 in cash three or four times a year until December 1972, either in Agnew's vice presidential office or at his residence in the Sheraton Park Hotel in Washington.

The payments didn't stop until after the federal investigation began in January 1973.

The net that snared Agnew was spread, almost casually, in fall 1972 after a casual lunch meeting between George Beall, then a U.S. attorney, and Robert Browne, intelligence chief for the Internal Revenue Service in Baltimore.

"There was a generic allegation that to do business with the county you had to play the game," Beall said yesterday. He and Browne discussed the "open talk" about payoffs for county business, and "I said, 'It may deserve federal attention,' " Beall recalled.

Then Browne dropped a bomb. He already had an informer -- whose identity Beall still doesn't know -- who said he had made payoffs to William H. Fornoff, the county administrative officer, for Dale Anderson, Agnew's successor as executive.

Fornoff had also been administrator under Agnew, but there was no suggestion that Fornoff had been his bagman, Beall said.


As it turned out, Agnew had his own bagmen. One was Matz, caught in the net as investigators developed cases against Anderson and former Anne Arundel County Executive Joseph W. Alton Jr.

Beall said the federal government had a good case against Matz for his involvement with Anderson and Alton -- both of whom were convicted. But then the engineer sprang his own surprise: He had information about kickbacks to Vice President Spiro Agnew.

Prosecutors were stunned.

Once Matz began talking, the investigation led quickly to Wolff, Green and Hammerman.

From there, it led to Agnew.

Pub Date: 9/19/96