Nixon campaign's political espionage operation

The Nixon campaign's political espionage operation was more than an isolated break-in: it was a covert system of campaign money, intelligence-gathering against political opponents, and delegated authority that made responsibility difficult to trace. As Bob Woodward and Carl Bernstein followed its financial trail, evidence connected a secret fund at the Committee for the Re-election of the President to the Watergate operation and other political projects. The investigation also exposed a second mechanism: after the Watergate break-in, records disappeared and committee employees were urged to stay silent. Later reporting, based on Jeb Stuart Magruder's account to prosecutors, named John Mitchell and John Dean as approvers and planners of the bugging operation.

The Fund and the Money Trail

The reporters' early financial evidence included a fifth check among the Mexican checks examined by Martin Dardis. Unlike the other four, it was a $25,000 cashier's check drawn on the First Bank and Trust Co. of Boca Raton, Florida, payable to Kenneth H. Dahlberg. Bernstein copied it as a facsimile. The check was deposited on April 20 with the four Mexican checks, bringing the deposit to $114,000. Four days later, Bernard Barker withdrew $25,000; the remaining $89,000 was withdrawn separately. At the time, Dardis and Bernstein did not know who Dahlberg was. The check's importance emerged through the later investigation: a General Accounting Office investigator said that the fund included money from Barker's bank account obtained by cashing Dahlberg's check.

Woodward checked with the General Accounting Office investigator daily as the audit progressed. Over successive conversations, the investigator described hundreds of thousands of dollars in unaccounted cash, a cash slush fund, and a hidden tangle beneath computerized financial reporting. Combining those remarks with a separate source's account, Woodward came to identify the fund with the convention-security money Bernstein had heard about in early July. One former administration official independently confirmed that it was the same fund, said G. Gordon Liddy had supervised it, and described a planned public explanation that would portray the money as protection against disruption at the Republican convention. The official also said Mitchell wanted that account released because too many people knew about the fund.

On August 16, Clark MacGregor publicly shifted responsibility toward Liddy, saying that Liddy, while serving as the Committee for the Re-election of the President's finance counsel, had spent campaign money on his own initiative to prepare for a possible attack on the President at the convention. The reporters' subsequent account was broader and more damaging. After Deep Throat said the draft was too cautious, Woodward and Bernstein reported that several of Mitchell's principal assistants controlled the Watergate espionage fund, which was held in a special account at the Committee for the Re-election of the President. The story said the fund contained more than $300,000 earmarked for sensitive political projects, that Liddy was among its recipients, that records relating to the account had been destroyed, and that Hugh Sloan had resigned because of his suspicions about Watergate. It also described the operation as extending beyond the break-in: the fund had supported other intelligence-gathering activities.

Authorization and Delegation

Sloan's account supplied a more specific picture of how the money was authorized. He said the procedure had seemed routine within a campaign budget exceeding $50 million. When first asked to provide money, he telephoned Mitchell at the United States Department of Justice; Mitchell told him to disburse it. Sloan said this happened repeatedly beginning in 1971. Mitchell was not merely one of five people with control over the fund: Sloan said that Mitchell initially was the sole person who authorized expenditures, and that authority was later passed to others, including Magruder. Sloan's description helped explain why some people connected with the fund received cash while others authorized payments by telephone.

The distinction between evidence of authority over the fund and proof of advance knowledge about the specific bugging remained important. Sloan doubted that the three men he was discussing had independently spent the money on unauthorized projects, but acknowledged that this possibility could not be excluded. The reporters' early stories therefore did not state as established fact that the withdrawals financed the Watergate bugging. Deep Throat said they did; the Bookkeeper, who suspected as much, could not independently confirm it. Barry Sussman and Harry Rosenfeld chose the narrower formulation that the money financed widespread intelligence-gathering activities against the Democrats. Their emerging rule was that a criminal allegation would not be stated specifically unless two sources confirmed it.

A later and more direct attribution came from Magruder. According to three sources in the White House and the Committee for the Re-election of the President, he told federal prosecutors that Mitchell and Dean had approved and helped plan the Watergate bugging operation. Magruder also said that Mitchell and Dean later arranged to buy the silence of the seven convicted Watergate conspirators. The story rested on what Magruder had told prosecutors, rather than a public statement from him; the distinction between a source's allegation and what the reporters could independently establish remained central to the coverage.

Silence, Destruction, and the Cover-Up

The effort to reconstruct the operation ran into a climate of fear inside the Committee for the Re-election of the President. When Bernstein and Woodward began visiting committee employees at home in mid-August, one employee trembled and pleaded with Bernstein to leave before others saw him. Another said she wanted to help, then burst into tears. The Bookkeeper, who had worked for Sloan and later for Maurice Stans, told Bernstein that she had been called before the grand jury early, when people had already lied and investigators did not yet know what questions to ask. She said that Sally Harmony and others had lied, while the details of what they were protecting remained unclear.

Sloan described the pressure more directly. He said that no one had formally ordered employees not to talk, but the message was always to “Hold ranks,” or “Keep the ship together.” His own departure followed suspicions that the operation was worse than the public account suggested. When Bernstein visited him, Sloan said, “They’re worse,” and explained that he had left because he suspected the worst. He wanted to speak, but his lawyers had warned him that public statements could be used against him in civil litigation. His account showed how loyalty, legal exposure, and organizational pressure could keep a person with relevant knowledge from going on the record.

Bernstein's reporting on the committee's response described a rapid destruction of records after the break-in. Wiretap memoranda, the single-sheet account of the secret fund—including withdrawals by Hugh Porter, Magruder, and Liddy—and as many as seven contributor ledger books were among the materials said to have been destroyed. Robert Odle inventoried and removed files over the weekend after the break-in; after the destruction, he was assigned to provide the Federal Bureau of Investigation with requested documents. The draft also reported that Robert Mardian and Fred LaRue began searching for incriminating evidence on June 19, before the bureau examined the committee's files.

The alleged pressure extended beyond removing documents. The story said Mardian, LaRue, and committee lawyers advised some people to avoid particular subjects when questioned by investigators and prosecutors. Federal Bureau of Investigation interviews took place with either committee lawyers or Mardian present, and some employees reportedly received promotions in the weeks after the arrests. Staff could not speak to the press without specific clearance, even to state their job titles; one employee said she was followed to lunch with a reporter and questioned afterward about their conversation. These details connected the financial operation to an organized effort to limit what investigators, journalists, and employees could learn.

From Campaign Operations to White House Accountability

The investigation also examined how responsibility might be insulated as decisions moved through the campaign and the White House. The reporters understood deniability as a method of keeping senior officials apart from controversial actions by having others implement them. In that structure, a direct link between a senior figure and an operative could be absent even when the operation served a broader political purpose. The reporting therefore treated missing direct contact as a problem to investigate, not as proof that no connection existed.

Later evidence sharpened the distinction between formal distance and operational links. Donald Segretti eventually said that Dwight Chapin had hired him, Gordon Strachan had discussed the job with him, and Herbert Kalmbach had paid him; Segretti said Chapin approached him first. That account placed recruitment, discussion, and payment in separate hands, consistent with an operation conducted through intermediaries. In a separate episode concerning Howard Hunt's files, Deep Throat told Woodward that on June 28 L. Patrick Gray had been told by John Ehrlichman and Dean that the files were political dynamite and should never be seen. Gray kept them for about a week, then put them in a burn bag; Deep Throat said Gray understood what the two men wanted even though, by Gray's account, he had not been directly ordered to destroy them.

Together, the money trail, Sloan's description of authorization, Magruder's later account, and the record of post-break-in destruction turned a series of apparently separate activities into a connected political operation and cover-up. The evidence did not erase distinctions among suspicion, corroborated reporting, and later testimony. Instead, it made those distinctions part of the story: who supplied funds, who could authorize them, who carried out the work, and who acted to keep its records and participants from exposing the chain.