THOUGH a Montgomery County grand jury found nothing illegal about a series of closed meetings between county commissioners James Matthews and Joe Hoeffel dubbed "breakfastgate," Matthews was arrested and charged with perjury and false swearing yesterday for allegedly lying to the jury.

Matthews, the commission chairman, repeatedly lied under oath about his business relationship with Certified Abstract, a title company awarded county contracts, according to the grand-jury report.

Matthews also made false statements to the jury about having violated the gag rule imposed and for conversing with a subpoenaed owner of Certified Abstract about the case, the report said.

The grand jury recommended the charges, the report said, because its members were "troubled by the number of false statements that we heard from Matthews," the brother of MSNBC host Chris Matthews.

The investigation, Montgomery County District Attorney Risa Vetri Ferman said, was triggered by a series of newspaper articles surrounding complaints about suspicious actions by the Board of Commissioners.

The jury found that it did not have enough evidence that Hoeffel and Matthews had violated the state's Sunshine Act during a series of nonpublic meetings that they held. According to the report, there was no evidence proving that deliberations had occurred between the commissioners during the meetings, though Bruce Castor, the third commissioner, testified that he felt "uninformed" and was not invited to participate in them.

Matthews, who didn't hire an attorney in the case, is quoted in the grand-jury report blaming Castor for the investigation, saying that it was politically motivated and, "They are out to get me."

"I didn't make him lie," Castor told the Daily News yesterday. "Criminal defendants, especially people who are completely devoid of integrity and honor like Matthews, will say anything."

Castor went on to rebuke Matthews' claims that the investigation was politically motivated.

"It is impossible for it to be politically motivated when charges were for lies," Castor said.

Jeff Lindy, the attorney who represented Hoeffel in the case, said that Matthews had made a "cardinal error" by giving statements without an attorney.

"He must have thought he was giving statements of his innocence," Lindy said. "That's why you need a lawyer, because you never know when your statements are going to be twisted around against you."