Watergate under the bridge: how the New York Times missed the scoop of the century

For 37 years Robert Smith and Robert Phelps watched from the sidelines as Bob Woodward and Carl Bernstein were showered with Pulitzers, book and movie contracts and fame for their investigative reporting of the Watergate scandal. All the while they knew that the story – and the riches – could have been theirs.

Now, in an admission that must rank among the most excruciating in ­newspaper history, the former New York Times journalists have revealed that they knew about the cover-up before their Washington Post rivals. But they dropped the ball.

As early as August 1972, two months after the break-in at the ­Watergate hotel, they were informed of key details of the scandal. They were close to cracking a story that forced the resignation of Richard Nixon, defined a generation and went down in journalistic legend.

The tip-off was made to Smith, a Times reporter, at a private lunch with Patrick Gray, acting director of the FBI. Gray told Smith that the former ­attorney general, John Mitchell, then running Nixon's re-election campaign, was involved in a cover-up of the break-in and attempted bugging at the offices of the Democratic National Committee.

Smith asked Gray how far up it went – all the way to the president? "He sat there and looked at me and he didn't answer. His answer was in the look," Smith said. Smith rushed back to the Times's Washington office, and accosted Phelps, an editor at the bureau. Phelps took notes and recorded the ­conversation. But nothing happened.

There is no explanation for the fumble as Phelps, now 89, cannot remember what happened. But two factors stand out: the day Smith received the news of the cover-up was his last on the paper; and Phelps was shortly to take a break from the office for a month in Alaska.

The paper's inaction allowed ­Woodward and Bernstein, to steal the show. The Post's source, Deep Throat, was identified in 2005 as Mark Felt – Gray's number two at the FBI.

The story of how the New York Times missed the chance to own one of the major stories of investigative journalism has been told by the paper itself. It based its report on a memoir published, largely unnoticed, last month by Phelps, and on interviews with him and Smith.

Though he will now never attain the celebrity status of Woodward, Phelps surely deserves an award for journalistic honesty.