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Spiro Agnew and Construction Kickbacks

The practice of bribing elected officials by engineers who worked in the construction industry was common in the county of Baltimore, Maryland in the 1960s and early 1970s. Engineers could bribe elected officials in their bid to be awarded state work contracts (Fleddermann, 2012).  When these scandals were discovered, the U.S Attorney for Maryland issued subpoenas, requiring engineers to submit the records of their firms to the U.S Attorney. This made engineers and engineering firms’ owners to seek the help of available attorneys, with experience in criminal law. Subsequent events led to the resignation of the then-Vice President of the United States, Spiro Agnew (Fleddermann, 2012). This paper analyses the events that led to the resignation of the then-Vice President of the United States, Spiro Agnew, and the ethical aspects pertaining to these contract awarding activities.
Engineering and architectural services for government projects were not put on bid in Maryland (Fleddermann, 2012). Instead, contracts were awarded to individual firms, based on various criteria such as the ability of the firm to do the work and its performance on past contracts, among other factors. Contrary to the engineering contract awarding situation, the contractor for government projects was chosen in a process of competitive bidding. Some engineers and owners of engineering firms such as Matz came to realize that they could only secure state contracts by offering bribes and kickbacks, and that their talents did not matter (Fleddermann, 2012).
Matz approached Spiro Agnew and started to entice him, in his efforts to increase chances of his firm being awarded contracts. This is because Spiro Agnew was an upcoming politician who was also ambitious. Later, Matz donated $500 towards Agnew’s campaign, where Agnew was elected a county executive of Baltimore, thereafter, and could now influence the issuance of contracts (Fleddermann, 2012). Matz’s campaign contribution was aimed at creating and increasing the chances of receiving some of the contracts for county engineering work. After Agnew’s election, Matz was rewarded with contracts, and Agnew was paid a kickback of 5% for every contract. Matz’s firm became prosperous, and Matz became wealthy, as a result. When Agnew was elected the governor of Maryland, Matz’s firm started receiving contracts for state work.  The arrangement continued, even after the election of Agnew as a Vice President of the U.S.
During this period, Matz used to give kickbacks to Agnew in cash to avoid any trace of bribery in company books. Engineering firms raised funds, which they paid in cash as kickbacks by giving key employees cash bonuses (Fleddermann, 2012). These employees could then return the cash to the firm, which could now be used to provide a kickback. The process of giving cash bonus was an act of income tax evasion. Alternatively, large loans could be given to colleagues by engineering firms (Fleddermann, 2012). The colleagues could then cash the money, return it to the firm, and then “repay” over a long period of time to doctor the books. When Matz explained these events to the court, Agnew was forced to resign (Fleddermann, 2012). Later, after Agnew and Nixon were re-elected, Nixon had to resign because of the intensity of the Watergate scandal.
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