US Attorney Earl Silbert asks the FBI to sweep his office and the grand jury room for bugs due to stories that have been appearing in the Post.

The FBI checks Silbert’s office and grand jury room, but finds no bugs.

Following the Post’s article, Mark Felt sends a memo demanding that agents be cautious about who they speak to about the Watergate investigation.

Bernstein visits the home of Judy Hoback. Bernstein had guessed correctly that she was one of the people who had gone back to the prosecutors. She worked for Hugh Sloan and Maurice Stans. After originally trying to stonewall and guess who his sources were, she begins to reveal what she knows. Bernstein asks if Stans is being set up as a fall guy, and she replies “If you could get John Mitchell, it would be beautiful,” but admits she doesn’t have hard evidence. She tells him Slone left because he didn’t want to be involved. She says Liddy and Sally Harmony both lied to the grand jury. Bernstein fishes for names, but she remains silent saying only that she had evidence but it was all destroyed. She worries that her phones are tapped because of what she knows. She tells him only about six people were involved in the payouts and mentions Magruder as one of them. He asks if she would just give him initials and she gives him L, M, and P.

Nixon tells John Dean he’s handled the Watergate matter very well so far. Dean suggests having Gerald Ford intervene in Wright Patman’s Banking Committee investigation. Nixon is currently 34 points ahead in the polls over McGovern.

Woodward reads Felt/Deep Throat a draft of a story saying high ranking officials from CRP had been involved in the paying for the Watergate break in. Felt says the payouts go beyond Watergate to “other intelligence-gathering activities.”

Woodward and Bernstein return to Hoback’s home. She confirms Liddy was paid from the slush fund. After more prodding, she also names Magruder and Porter.

Woodward convinces a press director of CRP to get Magruder to call in and try and talk them off the story. Magruder admits that he was questioned by the FBI, but it was all tossed out. Eventually the reporters decide not to say that the funds were specifically used for Watergate because they only had Felt/Deep Throat confirm it. They are determined to operate under the guideline that two sources are needed before printing allegations of illegal activity.

In the afternoon, Bernstein visits the home of Hugh Sloan, but only speaks to his wife. She is relieved that some of the details are finally coming to light. She tells Bernstein he can come back later when Hugh is home but can’t promise he’ll speak to him.

Bernstein speaks with an FBI agent assigned to the Watergate case and reads him notes the Robert Odle, Director of Administration at CRP, had removed documents following the burglary. LaRue and Mardian had told CRP employees to avoid talking about any records being destroyed. The agitated agent says this information could only come directly from FBI files and the reporters could be in legal trouble.

Woodward travels to New York hoping to speak to Martha Mitchell. He eventually meets with her, but she provides no valuable information.

Woodward and Bernstein meet again with Sloan in attempts to nail down who controlled the secret fund. Sloan confirms Mitchell and Stans, but says he doesn’t believe Stans knew the payouts were for illegal activities. He says if someone needed money he would simply call Mitchell at the Justice Department for authorization. The reporters know this confirms Mitchell was approving funds for illegal activities while he was Attorney General of the United States. Sloan says initially Mitchell was the only authorized person, but eventually Stans and Magruder were added. The details from Sloan begin to clarify what Judy Hoback told them regarding the number of people involved – some were there to authorize payments (Mitchell, Stans, Magruder plus two unknowns) and some received payments (Porter, Liddy and Magruder). Sloan says the others did not work for CRP, but does confirm one worked at the White House and the other was not in Washington at all. The reporters are convinced the White House connection is Haldeman. Sloan does not confirm, but also does not deter that thought. Bernstein suggests Herbert Kalmbach, Nixon’s personal lawyer, as the other outside of DC, but, again, Sloan will not confirm.

Woodward and Bernstein explains what they knew to Ben Bradlee, Executive Editor at the Washington Post, who pushes them on how certain they are on Mitchell. When they say they are definite, he tells them to write that story and worry about the other two names later.

The Mitchell story runs in the paper and Katherine Graham asks Bernstein if he has any more messages for her.

Bernstein discusses the Shipley conversation with Howard Simons saying he believes this puts Watergate in a new perspective. If it wasn’t an isolated bugging attempt, but part of a larger strategy, it begins to make more sense. Simons sends Bernstein to find Shipley.

After checking with his boss (the Attorney General of Tennessee, a Democrat himself), Alex Shipley gives Bernstein the story. The man who approached him was an old Army buddy named Donald Segretti. He details Segretti’s attempts to get him to participate in the political espionage schemes they had planned. He was assured the he’d get a job in the Nixon administration after the re-election, but Shipley doesn’t have proof Segretti was working directly for Nixon. Segretti had said he was the head coordinator for the operation, and Shipley confirm Segretti travelled extensively and was well funded.

Bernstein reaches Segretti’s mother and gives his and Woodward’s phone numbers, but neglects to mention they work for the Post. Segretti calls, but when he learns who they are, he hangs up.