Source: Garrett M. Graff. Watergate - A New History (2022)
On 24 June 1972, Gray summoned the 26 FBI agents to his office that were investigating Watergate. Instead of a congratulatory and inspirational speech, Gray berated them, believing at least one of them leaked information to Time magazine. Gray had been called by Sandy Smith, a top crime reporter, inquiring if the Acting FBI Director was shutting down the investigation. Gray’s fury grew as he listened to Smith on the phone, who possessed well-sourced details about the investigation. Gray surmised, while still on the phone, that the leak was from within the FBI. When none of the 26 agents admitted to the leak, Gray proceeded to collectively insult the Watergate investigators. Gray’s meeting backfired in spectacular fashion, in that his tirade may well have worked on a submarine in the Navy (where he served), but now he was viewed as a place-holding political figurehead that dared to question their integrity.
Almost certainly Felt was the leaker; he was not one of the 26 agents berated by Gray. Felt’s intention of leaking information to Smith was to send a shot across the bow to Gray, warning him that if he allowed the White House to dictate and control the investigation, his future in the FBI was over. Special Agent Lano sent Gray a memo outlining the obstacles that were hindering his investigation, such as agents needing to act faster to interview Baldwin and Mitchell. Gray didn’t read the memo for three days, since he was out of town. When he did read it, he was apoplectic, summoning Felt and Lano to his office, along with other investigators. During the meeting, Lano convinced Gray to urge Dean to accelerate the timetable for interviewing individuals in the Nixon administration. All the while, Felt was working to undermine Gray behind the scenes, and Gray was altogether unaware of Felt’s machinations.
Almost certainly Felt was the leaker; he was not one of the 26 agents berated by Gray. Felt’s intention of leaking information to Smith was to send a shot across the bow to Gray, warning him that if he allowed the White House to dictate and control the investigation, his future in the FBI was over. Special Agent Lano sent Gray a memo outlining the obstacles that were hindering his investigation, such as agents needing to act faster to interview Baldwin and Mitchell. Gray didn’t read the memo for three days, since he was out of town. When he did read it, he was apoplectic, summoning Felt and Lano to his office, along with other investigators. During the meeting, Lano convinced Gray to urge Dean to accelerate the timetable for interviewing individuals in the Nixon administration. All the while, Felt was working to undermine Gray behind the scenes, and Gray was altogether unaware of Felt’s machinations.
On 26 June 1972, FBI agents linked Liddy to one of the Watergate burglars, which drew them closer to linking CREEP to the break-in. CREEP, like Dean with White House staffers, insisted on having their lawyers present to monitor staffers that were interviewed by the FBI. The presence of CREEP lawyers (and Dean on his end) insured that no staffer spoke truthfully and candidly to the agents. The FBI had pieces of the puzzle, but were not yet able to get them to fit together. On 28 June 1972, Lano and another agent tried to question Liddy at CREEP, but Liddy refused to talk to them. Liddy met with Stans during lunch, where Stans asked what Liddy’s next steps were, and Liddy responded by saying he would keep his mouth shut and go to prison.
Meanwhile, Nixon had come to the (incorrect) conclusion that Mitchell had approved the break-in as well as other assorted dirty tricks, which meant that Mitchell had become a political liability and needed to be removed as the head of CREEP. On 30 June 1972, after just four months as Nixon’s campaign manager for 1972, Nixon and Haldeman as gently as possible pushed Mitchell to resign. It was suggested to Mitchell that his official reason was that he needed to spend more time with his wife [by then, Martha was a trainwreck, and had even in effect been held hostage by those entrusted by Mitchell to keep his wife away from the phone and people]. Nixon, forever wanting to avoid face-to-face confrontation, couldn’t take the opportunity to have a real revelatory conversation with Mitchell about what he knew and did concerning the Watergate break-in. Mitchell carried out the President’s wish, announcing his resignation as the head of CREEP, stating that the wanted to be near his wife. As Nixon and Haldeman predicted, the media took Mitchell’s reason at face value.
Meanwhile, Nixon had come to the (incorrect) conclusion that Mitchell had approved the break-in as well as other assorted dirty tricks, which meant that Mitchell had become a political liability and needed to be removed as the head of CREEP. On 30 June 1972, after just four months as Nixon’s campaign manager for 1972, Nixon and Haldeman as gently as possible pushed Mitchell to resign. It was suggested to Mitchell that his official reason was that he needed to spend more time with his wife [by then, Martha was a trainwreck, and had even in effect been held hostage by those entrusted by Mitchell to keep his wife away from the phone and people]. Nixon, forever wanting to avoid face-to-face confrontation, couldn’t take the opportunity to have a real revelatory conversation with Mitchell about what he knew and did concerning the Watergate break-in. Mitchell carried out the President’s wish, announcing his resignation as the head of CREEP, stating that the wanted to be near his wife. As Nixon and Haldeman predicted, the media took Mitchell’s reason at face value.
On 30 June 1972, Felt orchestrated his next FBI leak, giving a scoop about the contents of Hunt’s files that had been in Colson’s safe at the White House to the Washington Daily News, which was in effect a tabloid. That leaked information was only known to Dean, Fielding, and the FBI. Dean called Gray and Felt to complain, and Gray assured Dean that the leak hadn’t come from the FBI, and that Felt would be more involved in the investigation. The Daily News would have been Felt’s preferred newspaper for which to leak information, but the tabloid folded during the Summer of 1972. Felt needed to find another newspaper to publish his leaks, and it didn’t take too long for him to think of Bob Woodward at the Washington Post.
Meanwhile, Hunt very much resented the way the media portrayed him as a fugitive, in that he wasn’t hiding from investigators, he was avoiding reporters. Worse yet, the high-powered legal help promised to him, Liddy, and the five burglars hadn’t yet materialized. Hunt lined up his own lawyer and returned to DC on 3 July 1972, deciding that if the White House had abandoned him, then he would be their worst enemy. Through his lawyer, Hunt made it clear to the Justice Department that he was available for an interview, and that a subpoena would not be necessary. Hunt’s wife (Dorothy) was beyond-infuriated at the treatment of her husband, as well as the fact that he couldn’t get in contact with Liddy.
Meanwhile, Hunt very much resented the way the media portrayed him as a fugitive, in that he wasn’t hiding from investigators, he was avoiding reporters. Worse yet, the high-powered legal help promised to him, Liddy, and the five burglars hadn’t yet materialized. Hunt lined up his own lawyer and returned to DC on 3 July 1972, deciding that if the White House had abandoned him, then he would be their worst enemy. Through his lawyer, Hunt made it clear to the Justice Department that he was available for an interview, and that a subpoena would not be necessary. Hunt’s wife (Dorothy) was beyond-infuriated at the treatment of her husband, as well as the fact that he couldn’t get in contact with Liddy.
Unknown to the Hunts, Dean had been frantically trying to line up “hush money” for Hunt, Liddy, and the five burglars. After Deputy CIA Director Vernon Walters turned him down to be the source of the funds, Dean turned to Kalmbach and the campaign war chest at CREEP. Soon enough, Dorothy Hunt heard from a “Mr. Rivers” (Tony Ulasewicz), who had been enlisted by Kalmbach. What was needed from Dorothy was that she needed to contact the burglars’ families in order to get an estimate of their monthly expenses. Ulasewicz literally walked out of a hotel room with $75,100 given to him by Stans, with $25k as a retainer for the lawyer representing the five burglars (via Ulasewicz, Liddy received $26k). It didn’t take Dorothy Hunt long to figure out that the money was only scheduled to be parceled out up to the Election of 1972, which totaled $154k.
During July 1972, the Watergate break-in started to be pushed to the back pages, since the upcoming
Democratic National Convention became the main political focus for the media. Woodward went on a family vacation on Lake Michigan, while Bernstein returned to his normal beat covering VA politics. By this point, Bernstein was beyond-unhappy with his position at the Post, and he pursued a job with Rolling Stone magazine, and it was almost certain that he would land that position. However, the co-founder of Rolling Stone was too slow in making a job offer, of which Bernstein would have taken on the jump. While Bernstein was in limbo, Special Agent Lano and the FBI continued their Watergate investigation, frustrated that Gray had blocked them from pursuing a lead concerning a money trail that led to Mexico.
During July 1972, the Watergate break-in started to be pushed to the back pages, since the upcoming
Democratic National Convention became the main political focus for the media. Woodward went on a family vacation on Lake Michigan, while Bernstein returned to his normal beat covering VA politics. By this point, Bernstein was beyond-unhappy with his position at the Post, and he pursued a job with Rolling Stone magazine, and it was almost certain that he would land that position. However, the co-founder of Rolling Stone was too slow in making a job offer, of which Bernstein would have taken on the jump. While Bernstein was in limbo, Special Agent Lano and the FBI continued their Watergate investigation, frustrated that Gray had blocked them from pursuing a lead concerning a money trail that led to Mexico.
The wall of silence at CREEP started to crack, in that on 1 July 1972 a CREEP employee, Peggy Gleason, called FBI agent Paul Magallanes, who had interviewed her the day before with a CREEP lawyer present. Gleason called form a pay phone, and for two hours in the FBI vehicle driving around DC, Gleason answered questions, eventually winding up at a room at a Holiday Inn. Gleason talked to FBI agents for a total of nine hours about what was going on at CREEP, before and after the Watergate break-in, as well as mentioning Judy Hoback, a CREEP accountant. When the FBI interviewed Hoback, she told the agents about the oddities of CREEP’s finances and its bulging cash reserves, as well as what she knew about the roles of McCord and Liddy at CREEP.
While the interviews with Gleason and Hoback were valuable, on 5 July 1972 Baldwin dropped a bombshell, in that he had struck a deal with the US Attorney’s Office for his testimony in exchange for immunity. Baldwin, the Watergate break-in look-out guy and telephone eavesdropper, told what he knew and what he had seen. Among the information provided by Baldwin was that every evening McCord came by his room at the Howard Johnson
Motor Inn across the street from the Watergate in order to pick up each day’s phone logs and summaries.
While the FBI had their first significant witness, they remained stumped in terms of motive, and agents started to wonder if the five burglars broke into the DNC to remove bugs, instead of planting them, since no bugs were found at the DNC. By 12 July 1972, the FBI believed they had enough information to arrest Hunt and Liddy for being the masterminds of the Watergate break-in, but the US Attorney’s Office asked the FBI to wait for the Justice Department to go through a grand jury in order to indict both men. The FBI thought the grand jury’s focus was far too narrow, in that it only looked at the burglary and the wiretaps, but not considering information concerning the money.
While the interviews with Gleason and Hoback were valuable, on 5 July 1972 Baldwin dropped a bombshell, in that he had struck a deal with the US Attorney’s Office for his testimony in exchange for immunity. Baldwin, the Watergate break-in look-out guy and telephone eavesdropper, told what he knew and what he had seen. Among the information provided by Baldwin was that every evening McCord came by his room at the Howard Johnson
Motor Inn across the street from the Watergate in order to pick up each day’s phone logs and summaries.
While the FBI had their first significant witness, they remained stumped in terms of motive, and agents started to wonder if the five burglars broke into the DNC to remove bugs, instead of planting them, since no bugs were found at the DNC. By 12 July 1972, the FBI believed they had enough information to arrest Hunt and Liddy for being the masterminds of the Watergate break-in, but the US Attorney’s Office asked the FBI to wait for the Justice Department to go through a grand jury in order to indict both men. The FBI thought the grand jury’s focus was far too narrow, in that it only looked at the burglary and the wiretaps, but not considering information concerning the money.
During mid-July 1972, CREEP treasurer Hugh Sloan resigned, realizing that he had been working for a very shady organization. Magruder and Liddy recruited Bart Porter to replace Sloan, with the strategy being to have Porter testify to the grand jury that the money Liddy received was to finance reputable operations, such as protecting the nation against dangerous radicals. CREEP planned to admit and apologize for its shoddy campaign finance bookkeeping, throwing Sloan under the bus, but would stick to their story that the money given to Liddy was used for legal activities; however, Magruder remained uneasy. When he was interviewed by the FBI, Magruder had no trouble blaming McCord, claiming that the CREEP security consultant was a soldier of fortune acting on his own, while also telling the agents that the $250k in CREEP money budgeted for intelligence gathering was justified.
Gray and Kleindienst accepted Magruder’s cover story at face value, in large part since very few cracks in that story were revealed despite a flurry of subpoenas. The Justice Department seemed to be overly deferential when questioning staffers from the White House and CREEP, allowing them to testify privately instead of in front of the grand jury. Gray even brought in Felt and asked him if the investigation couldn’t stop with Hunt, Liddy, and the five burglars, but Felt told Gray that those seven men were pawns for the higher-ups at the White House and CREEP. Felt thought Gray’s reticence to proceed was not only “silent obstruction”, but a total failure of leadership for the FBI. To Felt, only one path appeared to be open in order to keep the FBI’s investigation going: leaking more information about the investigation to the press.
Gray and Kleindienst accepted Magruder’s cover story at face value, in large part since very few cracks in that story were revealed despite a flurry of subpoenas. The Justice Department seemed to be overly deferential when questioning staffers from the White House and CREEP, allowing them to testify privately instead of in front of the grand jury. Gray even brought in Felt and asked him if the investigation couldn’t stop with Hunt, Liddy, and the five burglars, but Felt told Gray that those seven men were pawns for the higher-ups at the White House and CREEP. Felt thought Gray’s reticence to proceed was not only “silent obstruction”, but a total failure of leadership for the FBI. To Felt, only one path appeared to be open in order to keep the FBI’s investigation going: leaking more information about the investigation to the press.