John [Dean] called me on the phone to say that his lawyers say the U.S. Attorneys Silbert and Glanzer, and just sat and listened to take their temperature as representatives of Dean, regarding what will happen going to the grand jury. He finds that first, he will be called, probably next week, the same as Mitchell. Same basis -- no cameras, and not announced until afterward. Second, Dean is not a target of the grand jury, also Haldeman is not. They don't believe they'll have to call Haldeman except as perhaps a way to corroborate other statements [...}
That's from Haldeman's diary, on Wednesday, April 4.
In fact, however, what's happening is that Dean's lawyer Charles Shaffer, having heard the entire story from Dean, has called Seymore Glanzer, one of the lawyers working for Silbert, the leader of the Watergate prosecution, after midnight the night before: "Brother Glanzer, you need to talk to me. You don't know how badly you need to talk to me...put some coffee on" (quoted from Emery, from Dean's book). They arranged a proffer: Dean would tell them what he would testify to, but only provisionally, pending a full plea bargain (in other words, the prosecutors couldn't use it until they cut a deal with Dean, but first they got to hear what they were cutting a deal for). One key condition: everything stays secret from Henry Peterson, the head of the criminal division, and therefore also from the Attorney General and, ultimately, from the White House. The lead FBI agent joins them, on the same condition that he not tell anyone above him.
Ultimately, Peterson would have to be cut in because his authority would be necessary for a plea bargain, but not until they're ready.
Dean also sends word to Haldeman of two more things: that Liddy has talked to the prosecutors and has "freed the White House from their minds," and that the real danger now is Jeb Magruder, which Haldeman then passes along to Ehrlichman and the president. It's a feint, however, or at least the Liddy part: the prosecutors have lied to Dean in order to pressure him. Liddy, as always, did not talk. And Magruder has retained a criminal lawyer, but as it turns out is hesitating to really spill everything, even to his own laywers.
In California, the president realizes at least some of how serious the threat is. Back to Haldeman's diary:
[The president] then told John [Ehrlichman] that he is to understand the overriding need for Haldeman on the staff. The P said, "Haldeman is more important to me than [Chief of Staff Sherman] Adams was to Ike. For example, the K[issinger] situation, which only he can handle. I can handle the rest, probably, but I can't do that. So protecting Haldeman, in terms of whether his testimony is raising a greater doubt about him, is a major consideration. He is the P's closest confidant, his Chief of Staff, and we can't let him be tarred as a dirty SOB, and this is a case in point."
The problem on the surface is that maverick Republican Lowell Weicker had made a series of accusations against Haldeman on the Sunday shows. But of course the more serious threat is that Haldeman is knee-deep in obstruction of justice...and that John Dean, secretly, is explaining the whole thing to the prosecutors, who are stunned at the extent of the cover-up.
If, that is, what Dean is telling them is true. Remember: all the prosecutors really know in this first week of April is that James McCord has accused others including Magruder, Mitchell, and Dean of being involved in authorizing the break-in and paying off the defendants, and that in response Dean has come in with a story that he was only acting on orders from above. Dean has a story that everyone lied, and McCord's testimony confirms that some people lied, but there's nothing, so far, to confirm what Dean is saying about the extent of White House involvement. Not to mention, when he gets to it, his claim that Richard Nixon himself has been fully informed of the conspiracy for the last weeks and had no hesitation about continuing it (remember that Dean himself doesn't realize the extent of Nixon's involvement in the cover-up, so the prosecutors aren't getting that).
So when they start hearing the fantastic story Dean is telling them, they must have been overcome by how thoroughly they have been fooled -- but also, even beyond wondering whether they could make the case, simply questioning how much of it was true.