Magruder was also implicated in the Watergate scandal was incarcerated for 7 months in 1974 for his role in the failed burglary and subsequent coverup. He left government after the 1973 inauguration. Magruder is the only direct participant in the scandal to confirm that President Nixon had specific foreknowledge of the Watergate break-in, and that Nixon actually directed Mitchell to proceed with the break-in, which was organized by G. Gordon Liddy and E. Howard Hunt.
A former marketing executive, Magruder was 34 years old when he joined the White House staff. He was educated at Williams College, where he received his Bachelor of Arts and the University of Chicago, where he picked up a Master of Business Administration degree. Magruder also served in the U.S. Army and was stationed in Korea. After the Watergate scandal, he left politics and business, earned a Masters Degree in Divinty from the Princeton Theological Seminary, and was ordained as a Presbyterian minister. He served as associate minister at the First Presbyterian Church in Burlingame, California and First Community Church of Columbus, Ohio, and senior pastor at the First Presbyterian Church of Lexington, Kentucky.