I'll give you Emery's version of the story below the fold, but the key is the result: the plan was not accepted...or rejected. While there is disagreement about exactly who said what, the gist of it is that Liddy was told only that it was too much, and to pare it down to a half-million dollar budget. It certainly did not appear to occur to anyone to get this guy as far away from the president's campaign as possible. And why not? It's how the White House had been operating. The campaign would be no different.
Here's an abridged verison of what, as Fred Emery tells it, G. Gordon Liddy proposed: the GEMSTONE plan. Quoting Emery, 89-91.
He started with DIAMOND. This was his plan to counter antiwar demonstrations at the Republican convention, at that time still scheduled for San Diego. Liddy contended the site was indefensible, so DIAMOND would kidnap the demonstration leaders before trouble occurred, drug them, spirit them over the nearby border to Mexico, and hold them until after the convention was over. These sudden disappearances Liddy labeled Nacht und Nebel—the night and fog of Nazi storm-trooper tactics. The charts listed Liddy operatives as a Special Action Group, an SS euphemism for death squad.
By Liddy’s account, John Mitchell interrupted to doubt whether such a team could operate the way Liddy proposed…Liddy went on to explain that his men included professional killers..To Mitchell’s question of where he would find such men, Liddy said they were from organized crime, and they did not come cheap. Mitchell commented, “Let’s not contribute any more than we have to to the coffers of organized crime.”
Liddy...plowed on. RUBY was to infiltrate spies into Democrat campaigns, including the nominee’s. COAL was a program to furnish money clandestinely to the campaign of black New York Congresswoman Shirley Chisholm [the first woman ever to announce for president]; Liddy says Mitchell ruled that out, saying that Nelson Rockefeller [then governor of New York] was “already taking care of that.” Then came EMERALD. This was for a “chase plane” to pursue the Democratic nominee’s airliner and buses and bug their radio communications. QUARTZ was to intercept microwave telephone traffic.
Liddy explained he already had an option to lease a houseboat in Miami Beach to which prostitutes in SAPPHIRE would lure top Democrats, and CRYSTAL, a communications center, would eavesdrop their pillow talk...
And so to the buggings. OPAL I-IV were four black bag jobs designed to place microphone surveillance as well as TOPAZ document photography teams in Muskie and McGovern headquarters in Washington, a Miami Beach hotel for the convention, and one reserve target of opportunity Mitchell might wish to designate...
There were two disruption operations: GARNET for outrageous demonstrations “supporting” Democratic candidates and TURQUOISE, which called for a Cuban commando team to sabotage the Democrats’ convention hall air-conditioning system during the worst of the midsummer heat.
Liddy closed with the spending flow chart, showing high initial outlays on equipment purchases, then the total budget: $1 million.
Liddy was told to destroy the charts he had used in the presentation, and did so -- and, after getting his enthusiasm back, prepared a new, slimmed-down plan. He wasn't fired, or even, by anyone's account, instructed clearly to stay within the law. They might not be ready to support some of the more outlandish ideas that Liddy and Hunt could come up with, but they would soon all commit to multiple felonies, without, it seems, much hesitation at all.