Magruder joined the White House in 1969 as a deputy communications director and aid to Chief of Staff H. R. Haldeman. As the 1972 election drew near, Magruder became the deputy campaign director for the Committee to Re-elect the President and worked closely with John Dean..

Together with Egil Krogh, Magruder hired Liddy and Hunt to supervise the May 1972, Watergate break-in. Magruder made logs of the recorded telephone conversations of the DNC office workers and delivered them to another Haldeman aid. However, one of the telephone taps failed, and another break-in was made on June 17, 1972.

After the arrests, Magruder became the front man for the administration before the grand jury. Eventually, he was charged with perjury and conspiracy to obstruct justice. In pleading guilty, Magruder told the judge, “I know what I have done, and your honor knows what I have done…. Somewhere between my ambition and my ideals, I lost my ethical compass.” Magruder spent seven months in prison and was released in January 1976.