One of the mystery figures in the 1973 federal investigation that forced the resignation of Vice President Spiro T. Agnew testified today that he had warned Agnew years before he left office of a kickback scheme that "would eventually bring down . . . everyone involved and Mr. Agnew personally."
Engineer Wilson Ballard, who long ago told his story to federal prosecutors but whose name had never before been revealed, testified that in 1967, I.H. Hammerman II, a wealthy Baltimore developer and close friend of then Maryland governor Agnew, demanded cash kickbacks in return for securing state contracts for Ballard. Ballard said that in February 1968 he visited the governor's office and complained to Agnew of this "highly illegal activity."
And what was Agnew's reaction, Ballard was asked.
"He was as cool as the center seed of a cucumber," the engineer said. "He was most cordial.He seemed appreciative. He convinced us that he was concerned [about the kickback scheme] also." Ballard said that visit was the only time he talked with Agnew about the subject.
Ballard's testimony came on the second day of proceedings in a civil lawsuit that in a sense has become the public trial that Spiro T. Agnew never got. Agnew avoided that ordeal by pleading no contest to a single criminal charge of income tax evasion and resigning his office on Oct. 10, 1973. That proceeding took only 30 minutes and, instead of a trial, the public got only a dry, 40-page Justice Department document outlining Agnew's alleged role in a system of kickbacks given in exchange for lucrative Maryland contracts.
Now for the first time, some of the people behind those allegations are telling their stories in the trial of a suit initiated by three Maryland taxpayers who are attempting to collect for the state more than $170,000 that Agnew and an associate allegedly took in kickbacks.
Already, in connection with the case, it has been revealed that Agnew paid state and federal authorities $172,000 in taxes, penalties and interest on unreported income from 1967 through 1972.
Today Ballard testified that state engineering contracts for his company began to dry up in 1967, Agnew's first year as governor. On Aug. 8 of that year, Ballard testified, he got a call from Hammerman and was asked to come to Hammerman's office the next day.
There, Hammerman showed him a list of state contracts and told Ballard he could have one or more, according to Ballard.
"Then he said there was a condition: that he be reimbursed 5 percent of the fees [Ballard got] in cash," Ballard said under questioning by attorney William Dobrovir, who is representing the three Maryland taxpayers.
Ballard testified that he refused.
In 1973, when federal prosecutors began the Baltimore County kickback investigation that eventually led to Agnew, Hammerman reluctantly cooperated and his sworn statement ultimately became crucial in the case against Agnew. According to the Justice Department document, Hammerman said that under an agreement with Agnew, he collected cash kickbacks, kept 50 percent of the money in a safe deposit box and periodically delivered the funds to Agnew.
Ballard, whom prosecutors considered a "white knight witness" and whose identity they protected, testified today that he told his attorney, Jervis Finney, about Hammerman's demand soon after their conversation.
Finney, who later became the U.S. attorney for Maryland, was then a prominent private lawyer, a Repubican officeholder in Baltimore County and a friend of Agnew.
Finney also took the today told of visiting Agnew in Ocean City in August 1967 to repeat Ballard's story.
"I told him [agnew] I was very concerned about it. It appeared to me Mr. Hammerman was involved in obtaining money illegally. I was very concerned of its impact on Mr. Agnew," Finney testified.
Agnew's response, Finney testified, "was cool. On the other hand, he listened. He did not tune me out. His final reaction was he would look into it."
Finney testified that at one point Agnew said that "Mr. Hammerman might have been too forceful with respect to political contributions, but he felt certain that Mr. Hammerman was not doing anything that wasn't right."
Finney testified that in a later conversation with Agnew, though he does not remember the exact words, Agnew told him he had looked into it and there was no problem.
In his historic 1973 court appearance, Agnew denied that he was guilty of anything but the single charge of income tax evasion. He said that he has never conducted his public duties in a way that would harm the public interest and asserted that his acceptance of "contributions" while governor "was part of a long-established pattern of political fundraising in the state."
Agnew, who now lives in Palm Springs, Calif., is not expected to testify at this trial in which he remains the lone defendant.Hammerman was dismissed from the case after he paid the state $52,000, including $30,000 for kickbacks he confessed to taking and $22,000 in interest.
The three taxpayers and the state attorney general, who joined them in the suit, maintained that any money Agnew received because of his public office belongs to the state and must be returned.