A limited hangout typically is a response to lower the pressure felt from inquisitive investigators pursuing clues that threaten to expose everything, and the disclosure is often combined with red herrings or propaganda elements that lead to false trails, distractions, or ideological disinformation; thus allowing covert or criminal elements to continue in their improper activities.
Victor Marchetti wrote: "A 'limited hangout' is spy jargon for a favorite and frequently used gimmick of the clandestine professionals. When their veil of secrecy is shredded and they can no longer rely on a phony cover story to misinform the public, they resort to admitting - sometimes even volunteering - some of the truth while still managing to withhold the key and damaging facts in the case. The public, however, is usually so intrigued by the new information that it never thinks to pursue the matter further.
The phrase was coined in the following exchange:
PRESIDENT: You think, you think we want to, want to go this route now? And the--let it hang out, so to speak?
DEAN: Well, it's, it isn't really that--
HALDEMAN: It's a limited hang out.
DEAN: It's a limited hang out.
EHRLICHMAN: It's a modified limited hang out.
PRESIDENT: Well, it's only the questions of the thing hanging out publicly or privately.
Before this exchange, the discussion captures Nixon outlining to Dean the content of a report that Dean would create, laying out a misleading view of the role of the White House staff in events surrounding the Watergate burglary. In Ehrlichman's words: "And the report says, 'Nobody was involved,'". The document would then be shared with the Senate Watergate Committee investigating the affair. The report would serve the administration's goals by protecting the President, providing documentary support for his false statements should information come to light that contradicted his stated position. Further, the group discusses having information on the report leaked by those on the Committee sympathetic to the President, to put exculpatory information into the public sphere.
The phrase has been cited as a summation of the strategy of mixing partial admissions with misinformation and resistance to further investigation, and is used in political commentary to accuse people or groups of following a Nixon-like strategy.