Out of the Past: The Agnew Case

Throughout the months of the Watergate hearings, Spiro T. Agnew had been artfully staying on the sidelines. He played a lot of golf at Burning Tree and a lot of tennis at the Linden Hill Club. He bought himself a new twelve-room house in Bethesda, Md., for $190,000, and the Secret Service installed the usual safety devices (an electronic-eyed brick-and-redwood fence for $39,000). His last major speech was in June, and his main official work consisted of playing host to state visitors. In short, even by vice-presidential standards, Agnew was keeping a low profile. His object: to keep himself apart from the White House scandals until he could emerge as the unscathed, untarnished presidential candidate of 1976. Or even, perhaps, as the constitutionally designated successor to a departed President Nixon.

Last week, he had to announce to a stunned public: "I am under investigation for possible violation of the criminal statutes." Specifically, the inquiry centers on allegations by Maryland contractors and others that Agnew collected payoffs during his terms as Baltimore County executive (1962-66), as Maryland Governor (1967-68), and even as Vice President. He faces possible charges of extortion, bribery, tax evasion and conspiracy.

Although he first vowed to maintain silence until the investigation was completed, Agnew quickly changed his mind after aides convinced him that such a silence would be politically disastrous. In marked contrast to Nixon, Agnew called a press conference to deny any wrongdoing. Looking confident and totally in command during 30 minutes of televised questioning, the Vice President branded a set of newspaper reports that he had once accepted $1,000 a week in illegal funds as "damned lies." He said that he had "absolutely not" accepted money for personal use from Maryland contractors and that "I have nothing to hide" in the way of finances. As for the possibility of being forced to resign over the matter, Agnew replied that he had given it no thought. He had "no expectation of being indicted" and thus had not even begun any "contingent thinking" about what would happen if he were.

There was little doubt that Agnew's bravura performance won him sympathy and support. Nevertheless, "contingent thinking" was the order of the day in Washington. Were Agnew's chances for a presidential bid shattered? Probably--unless he is cleared and cleared soon. But if he is found blameless, might he not turn into a ready-made "reform" candidate for the Republicans in 1976? On the other hand, if Agnew is indicted, will Nixon not be compelled to demand his resignation? If so, would Nixon then replace him with a docile party-liner or with a major political figure? And if the latter, would Nixon suddenly find himself with a No. 2 man who possessed more stature than No. 1, thereby increasing the pressure for his own resignation?

It was perhaps symptomatic of the nation's gathering political paranoia that many felt a faint suspicion that Agnew was somehow being played with in the strategy of a bigger--and hidden --power game. Some improbable "they"--the Democrats, enemies in the White House or whoever--were after him.

One thing was certain: the President and the Vice President of the U.S. were dealing with one another in a spirit of high wariness. In response to repeated questioning from newsmen, White House officials declined to issue an unequivocal statement of presidential support for Agnew--the sort that Agnew has recently been asked to make, and has made, on behalf of Nixon. The most that Deputy White House Press Secretary Gerald Warren could produce was a lame assurance that there was "no reason for the President to change his attitude about the Vice President." Agnew claimed that he had received private reassurances from Nixon in a 1 3/4-hour session with the President --their first one-to-one meeting in more than three months. But he stressed that "the office of Vice President is an important enough one that the man has to stand on his own feet."

Both men are in tricky legal territory. Agnew has been "invited" to turn over his financial records from 1967 to the present (in addition, authorities subpoenaed his records as Governor of Maryland). Agnew said that he was willing to submit personal material--as well as "my own body, for interrogation" --"at the appropriate time, in the appropriate way, to the appropriate parties." However, he said, his attorneys had not yet decided on precisely what would be appropriate.

Agnew was accorded a delay (at least until late this week) on the deadline originally specified for his submission of evidence, and it is possible that the White House is trying to keep him from making any legal move that would undercut Nixon's extensive claims of Executive privilege.

Agnew said that he first became aware of his involvement in the probe last February, when he heard rumors on "the cocktail circuit" that his name had been mentioned by Marylanders being questioned by George Beall, the tough young (35) Republican serving as U.S. Attorney in the Vice President's home state.

After hearing further feedback suggesting that he was trying to put an end to the investigation, Agnew said, he hired Washington Lawyer Judah Best, ordering him to make contact with Beall and assure him that the Vice President had no intention of interfering in the case. On Aug. 1, Beall formally notified the Vice President, with the approval of Attorney General Elliot Richardson, that he was under investigation by the grand jury.

The investigation was started by Beall in January. The brother of Maryland Senator J. Glenn Beall Jr. and a member of a distinguished political family, the prosecutor had pursued an activist course since his appointment by President Nixon in 1970. He vigorously harried owners of clip joints along "the Block," Baltimore's notorious bar district, and helped prepare the case against Arthur Bremer, now serving a 63-year sentence for the attempted assassination of George Wallace.

Maryland's always prodigious political yarn spinners, who gather over piquant crab imperial at Baltimore's Chesapeake Inn or Karson's, have come up with any number of secret motives behind Beall's latest probe. For one thing, Agnew kept Beall on a string for some time before finally acquiescing in his appointment, apparently in retaliation for Beall's refusal to give Agnew carte blanche with his 1968 G.O.P. Convention vote.

Still, there seems no special reason to doubt the most obvious motive behind the investigation: Beall became convinced that big Maryland building projects, which had been controlled by Democrats for several years, were riddled with corruption. Thus, in early January, he issued a set of sweeping subpoenas demanding several tons of county records, and later announced to a grand jury the opening of a probe into "contract-purchase irregularities." As the investigation widened, it was apparent that major state political figures were involved. Among them:

> William E. Fornoff, 56, the blustery, barrel-chested former administrative officer of Baltimore County, a post he held under both Agnew and his Democratic successor as county executive, Dale Anderson. In June, Fornoff pleaded guilty to a charge of "impeding the enforcement" of federal tax laws, admitting that he frequently delivered quantities of cash to "a public official." In a strategy similar to that of Judge Sirica after the Watergate trial, Federal Judge Alexander Harvey II has delayed sentencing Fornoff, presumably so that he will cooperate fully with Beall in the investigation.

> Dale Anderson, 56, whose relationships with contractors are under intense inquiry by Beall. He has denied that he was the unnamed "public official" cited by Fornoff.

> Jerome Wolff, 55, president of Greiner Environmental Systems, Inc., an affiliate of J.E. Greiner Co. Inc., one of Maryland's biggest construction consulting firms. Wolff was named chairman of the Maryland roads commission by Agnew in 1966 and later (1969-70) went to Washington as an assistant to the Vice President on scientific matters.

> Harry W. Rodgers III, a prominent Maryland land developer and longtime political fund raiser. Described by associates as "everybody's pal," Rodgers supported the Democratic candidate for President in 1964 and 1968, then joined Democrats for Nixon last year. TIME has learned that the Justice Department considered prosecuting him for a possibly illegal campaign contribution in 1972. Rodgers promptly made these difficulties known to the White House, where W. Richard Howard, an assistant to then Presidential Counsel Charles W. Colson, fired off a memo to John Dean asking him to go to bat for Rodgers at the Justice Department. Rodgers was never prosecuted. He is currently recuperating from a heart attack at Southwind, his estate on Maryland's Eastern Shore, but expects to be subpoenaed in the Agnew investigation soon.

> I.H. ("Bud") Hammerman II, head of a large Baltimore mortgage banking and real estate organization and a longtime supporter of both Agnew and Nixon.

> Lester Matz, 49, partner in Matz, Childs and Associates, another Maryland construction consulting firm, and a contributor to Agnew's campaigns.

TIME has learned that at least two of Beall's witnesses, Wolff and Matz, have accused Agnew of extorting campaign contributions from state and federal contractors in Maryland. Sources close to the investigation said that some of the rake-off methods were quite sophisticated, including one plan in which contractors favored with government business awarded fake bonuses to employees in the know, always being careful to deduct the proper withholding taxes, and then scooped them back for secret donations to politicians. The contractors in question worked on, among other things, state roads and two huge bridge-building projects in the Baltimore-Annapolis area: the parallel span of the Chesapeake Bay Bridge, which opened last June and provides a second, four-mile-long bridge for traffic across the bay, and an interstate-highway bridge over Baltimore harbor. The two projects were financed by a $220 million bond issue approved by the state legislature in 1967, but both ran into multimillion-dollar cost overruns--an extra $40 million for the bay bridge alone. Consulting firm for both projects: J.E. Greiner Co., which is currently forbidden by the state department of transportation to work on public Maryland projects, largely because of complaints about the cost overruns on the bay span.

Another area being investigated involves rental contracts made by the General Services Administration on behalf of various federal agencies for office space. Such agreements are frequently reached without competitive bidding, and the political clout of landlords is a clearly understood part of the negotiating process. One such contractor with impeccably bipartisan connections is, of course, Rodgers, whose firms began doing business with the Federal Government under Lyndon Johnson and prospered even more under Nixon. Since 1967, Rodgers' companies have received a total of $19.6 million from the GSA, and last year they collected $5.7 million; some of his leases run until 1991. Rodgers has told TIME, however, that none of his dealings has been influenced by his fund-raising efforts for the Nixon Administration.

Since both Wolff and Matz, Agnew's primary accusers, are themselves believed to be deeply involved in the payoff scandal, they are presumably being forced by the Government into the position of being "willing to give up Agnew to save themselves," as one observer bluntly put it. Wolff was said to be especially anxious to make a deal and avoid being forced to testify under limited, or so-called "use" immunity.

Agnew argued that the credibility of such witnesses is open to serious question. "These accusations," he said, "are coming from those who have found themselves in very deep trouble and are seeking to extricate themselves from this trouble and are flirting with the idea that they can obtain immunity or reduced charges, perhaps, by doing so." Moreover, according to an observer familiar with the investigation, the Government's case "is based principally, up to now, on the witnesses' testimony." If the case should ever go to trial in that form--one man's word against that of two others--a Vice President of the U.S. would almost certainly appear to a jury more believable than his accusers.

Still, when questioned closely about his past relations with state and federal contractors, Agnew did not repeat the sweeping denials that he employed during most of his news conference. "Anyone that's been around the political scene in the United States who would expect that campaign contributions don't come from contractors doing business with the state and Federal Government is quite naive," he said. At another point, he implied that contractors had contributed to his own campaign chest and that he allowed them "access" to "consult" with him. Certainly none of that adds up to extortion or any other crime, but voters would have to be naive indeed to believe that politicians and contractors do not need each other for more than consultations. Agnew boasted, however, that he had nothing to hide and had made regular financial statements to the public. His last one, in 1972, showed assets of $198,250 -- up a smart 79% over four years earlier.

Being a Vice President has its perquisites -- Air Force jets and limousines for vacations with rich friends. Last week, having stated his defense and won widespread praises for doing so, Agnew reverted to his sporty ways. He jetted out of sweltering Washington for a weekend of golf and swimming at Frank Sinatra's palatial estate in Palm Springs, Calif.

The life-style of the nation's No. 2 elected official could drastically change if he is drawn into a bruising court battle. Agnew demonstrated last week that he is anything but whipped by that prospect. Nevertheless, along with almost everyone else in the Nixon Administration, Agnew is very much on the defensive -- not proved guilty but possibly less than innocent.

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