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PH 58-611. The gist of this background information was that LESTER MATZ , prior to 1966, when AGNEW was the County Executive (Mayor) of Baltimore, MATZ began making payments to J, WALTER JONES of kickback from three to five percent of the total of his contracts he received. MATZ is also a Consulting Engineer. In 1966-67 MATZ had not made payments of kickbacks until it was to the point he owed approximately $20,000. JONES was pushing MATZ for a payment and MATZ, because of the large sum involved, arranged to pay AGNEW the $20,000 cash in person. He arranged to obtain this cash so that it would appear legitimate, by_f complicated loan with an associate bé of MATZ naned| | for $30,000. This $20,000 cash bic payment was alleged to have been directly thaddé tal AGNEWowhile he was Governor of Maryland, in his office space in Baltimore, Ma., in July of 1968. (The prosecutors believe the time frame is July 16 ~ 28, 1968.) In around February 1969, after AGNEW ‘| had been installed as the Vice President of the United States there was some remaining kickback money that had not been paid and MATZ went to the Vice President's office in Washington, D.C., and turned over $11,000 to the Vice President, It was said that he returned to the Baltimore area and made comments to his partner, "I just paid off the Vice President of the United States", There were other meetings after this where MATZ saw AGNEW and he gave small amounts of money, roughly equalling $5,000, There was a contract held by MATZ involving & government job in Suitland, Md., in which MATZ was involved. He put up part of the money and turned over to the Vice President in the Executive Office Building in Washington, D.C., $2,500, MATZ, on 8/12/73, during pre-polygraph interview, furnished more detail than is outlined which will be included in the polygraph report enclosed herewith, By way of information, it is reported that the USA was extremely pleased with the results obtained by the polygraph because he is receiving substantial additional information, apparently very valuable to him, as a direct result of the polygraph. It is also pointed out that when the interviewees were beginning to make new admissions, SA PEARCE for the most part was not present and the U.S. Attorney, First Assistant LIEBMAN, and the defendants attorneys, would have private meetings where the disclosures were made to the prosecuting staff. -~5 -