A millionaire Baltimore real estate developer and mortgage banker who admitted in 1973 to participating in a bribery-kickback scheme with then vice president Spiro T. Agnew has agreed to repay the state of Maryland for the money he took, with interest.
I. H. (Bud) Hammerman II, who took a 25 percent share of kickbacks paid by state engineering contractors while Agnew was governor, has agreed to pay $52,455 to the state by Feb. 5. The amount includes $30,000 for kickback shares Hammerman confessed to taking and $22,455 for interest varying between 5 and 7 percent, calculated from January 1968.
"It's fair to say that Hammerman is acknowledging his debt to the taxpayers of Maryland," said Deputy State Attorney General George Nilson. "It's a little late, of course, but it's here and it's something."
Three Montgomery citizens originally filed suit against Agnew, Hammerman and former State Roads. Commissioner Jerome B. Wolff in October 1976 in an effort to collect $205,000 the men had allegedly taken in kickbacks. The settlement with Hammerman was reached Thursday in the office of Maryland Attorney General Stephen H. Sachs, who is seeking to join the citizens' action. It was formally entered yesterday in the Anne Arundel County Court, where the case is being heard.
The consent decree specifies that the citizens will continue to press their case against Agnew and Wolff for $175,000 in reimbursements, plus interest, but Hammerman will be dropped from the suit and will not be called to testify "unless absolutely necessary," and then only for technical reasons.
Hammerman's attorneys issued a statement yesterday saying they "considered the settlement to be an eminently fair compromise in light of the numerous constitutional and legal issues involved and the expense of litigation." Hammerman, now 56 and still working at his business in Baltimore, was said to be out of town and unavailable for comment.
Hammerman pleaded guilty to a federal income tax charge in October 1973 in a plea-bargaining arrangement after cooperating with federal authorities in the Agnew investigation. According to court papers filed in the case, Hammerman, who was a chairman of Agnew's 1966 campaign for governor, solicited engineering firms for kickbacks after they were identified by Roads Commission Chairman Wolff as being in line for state contracts.
Over 18 months, Hammerman received kickbacks from seven engineering firms and took a cash payment from a bank in return for the bank's participation in financing a major state bond issue, according to court papers. Agnew received 50 percent of the engineering firm kickbacks, prosecutors charged, while Wolff and Hammerman split the other 50 percent. Hammerman's share of the funds came to $30,000, according to a statement he gave to prosecutors.
Hammerman was sentenced to an 18-month prison term by a panel of federal judged, but the Fourth U.S. Circuit Court of Appeals, on an appeal of the sentence, subsequently allowed Hammerman to withdraw his guilty plea and the charges against him were then dropped.
His repayment of money gained from public corruption is not unique. Federal prosecutors have collected about $250,000 from the group of 51 contractors and government officials so far convicted in the General Services Administration kickback, scandals, officials said yesterday. However, David Scull, an attorney for the citizens group, said that the amount of prominence of Hammerman's repayment would serve as a "deterrent to this kind of white collar crime in government."
"This is a very important victory for us," said Scull, who said his group still hopes to collect from Agnew, and Wolff when their suit comes to trial next April.
A settlement between Hammerman and the citizens' group had been under negotiation for some time, but the turning point apparently came last June, when trial Judge Bruce C. Williams ruled that the statements made by Hammerman, Wolff and Agnew to federal prosecutors could be used as evidence in the case.
Sach then agreed to move to have the state join the suit after it appeared the citizens might be found to be lacking the proper legal standing to recover from the three men on behalf of taxpayers. When Hammerman's attorneys went to Baltimore to try to persuade Sachs to keep the state out of the case, Sachs said yesterday, "I said, 'Why not just pay the money you said you took?'" The settlement was then negotiated over the following weeks by the three parties.
The state's motion to join the case will be heard on Monday. So far, the legal costs of the prolonged litigation have been borne by the Fund for Constitutional Government, a Washington-based public interest law foundation funded by liberal philanthropist Stewart Mott.