Mitchell came up with the idea for a type of revenue bond called a “moral obligation bond" while serving as bond counsel to New York’s Governor Nelson Rockefeller in the 1960s. In an effort to get around the voter approval process for increasing state and municipal bond limits, Mitchell attached language to the offerings that indicated the state’s intent to meet bond payments even though it was not obligated to do so. . Mitchell’s intent was to create a “form of political elitism that bypasses the voter’s right to a referendum or an initiative.”
During his successful 1968 campaign, Nixon turned over the details of the day-to-day operations to the superbly organized Mitchell. After he became president in January 1969, Nixon appointed Mitchell attorney general while making an unprecedented direct appeal to FBI Director J. Edgar Hoover that the usual background investigation not be conducted. Mitchell remained in office from 1969 until he resigned in 1972 to manage President Nixon's successful reelection campaign. As attorney general, Mitchell believed that the government's need for "law and order" justified restrictions on civil liberties. He advocated the use of wiretaps in national security cases without obtaining a court order (United States v. U.S. District Court) and the right of police to employ the preventive detention of criminal suspects. He brought conspiracy charges against critics of the Vietnam War, and demonstrated a reluctance to involve the Justice Department in civil rights issues. "The Department of Justice is a law enforcement agency," he told reporters. "It is not the place to carry on a program aimed at curing the ills of society."
Mitchell's name was mentioned in a deposition concerning Robert L. Vesco, an international financier who was a fugitive from a federal indictment. Mitchell and Nixon Finance Committee Chairman Maurice H. Stans were indicted in May 1973 on federal charges of obstructing an investigation of Vesco after he made a $200,000 contribution to the Nixon campaign. In April 1974 both men were acquitted in a New York federal district court.
On February 21, 1975, Mitchell was found guilty of conspiracy, obstruction of justice, and perjury and sentenced to two and a half to eight years in prison for his role in the Watergate break-in and cover-up, which he dubbed the White House horrors. The sentence was later reduced to one to four years by United States district court Judge John J. Sirica. Mitchell served only 19 months of his sentence, at Maxwell Air Force Base in Montgomery, Alabama, a minimum security prison, before being released on parole for medical reasons. Tape recordings made by President Nixon and the testimony of others involved confirmed that Mitchell had participated in meetings to plan the break-in of the Democratic Party's national headquarters in the Watergate Hotel. In addition, he had met, on at least three occasions, with the president in an effort to cover up White House involvement after the burglars were discovered and arrested. In 1972, he warned reporter Carl Bernstein about a forthcoming Watergate-related article: "Katie Graham's gonna get her tit caught in a big fat wringer if that's published. This implied threat against the Washington Post publisher is considered the most famous threat in the history of American journalism.
In a column on Mitchell's death William Safire wrote, "His friend Richard Moore, in a eulogy, noted that near Mitchell's grave in Arlington National Cemetery was the headstone of Colonel Gregory "Pappy" Boyington, a Medal of Honor winner, who used to call Mitchell yearly to thank him for saving his life."
Because of her colourful personality and personal history, Martha's protestations that the President and the entire US government were involved in a cover-up were generally considered at the time to be delusional, and medical opinion was satisfied that she was mentally ill. History however has proved that much of what she said was true. Her name has therefore been subsequently given to the phenomenon - now known as the Martha Mitchell effect - which refers to the misdiagnosis of delusions brought about by mental illness.
She died in 1976.