FBI File Details Corruption of Spiro Agnew
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
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Agnew being sworn in as vice president in 1972
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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.
Jim Krane is APBnews.com special projects editor (jim.krane@apbnews.com). APBnews.com staff members Tami Sheheri and Janon Fisher also contributed to this report.
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