California: Agnew Agonistes

Anyone who doubts that sheer gall knows no bounds should consider the case of former Vice President Spiro Agnew. In 1973 Agnew was forced to resign as Richard Nixon’s Veep amid charges that while Governor of Maryland he accepted $147,500 in illegal kickbacks from highway contractors. Nine years later, after settling down in tony Rancho Mirage, Calif., Agnew paid the state of Maryland $248,735 in restitution for the alleged bribes, plus interest and fines. But Agnew, who became an international business consultant after leaving the Government, deducted the entire amount, plus legal fees and interest, from his California tax return, claiming the repayment as an expenditure.

In a 1986 audit, the California franchise tax board denied the deductions and ordered Agnew to pay an additional $24,197 in state taxes and interest. In an appeal last week, Agnew argued that the $24,197 should be returned to him as a tax refund on his restitution. Conway Collis, a member of the state board of equalization, pronounced Agnew’s claim “unbelievable” and said he found it “very hard to be sympathetic” to the former Vice President. If the tax board granted him the refund, said Collis, “we are in effect asking other California taxpayers to subsidize Mr. Agnew’s wrongdoing.” Agnew’s appeal was rejected by a 5-0 vote.