On 10th July, 1972, Earl J. Silbert filed a "motion to Compel Testimony of Grand Jury Witness Michael Douglas Caddy. At issue were 38 key questions that Caddy refused to answer. According to Caddy, these "38 questions was to attempt through my lips as their defense attorney to implicate and incriminate Hunt and Liddy in the break-in." On 13th July, Caddy once again refused to answer these questions and therefore John J. Sirica sent him to prison.
Caddy was soon released and on 19th July, 1972, Caddy appeared before the Grand Jury and answered all the questions he was asked. He was surprised that he was never questioned about his relationship with John Dean, G. Gordon Liddy, E. Howard Hunt and the White House before the Watergate break-in.
Strangely he was never asked to testify before Sam Ervin and the Senate Watergate Committee. However, when Herbert W. Kalmbach was interviewed it was discovered that Caddy had rejected attempts by Anthony Ulasewicz to pay "hush money" to his clients.
In 1984 Caddy became a lawyer for Billie Sol Estes. On 9th August, 1984, Caddy wrote to Stephen S. Trott at the U.S. Department of Justice. In the letter Caddy claimed that Estes, Lyndon B. Johnson, Mac Wallace and Cliff Carter had been involved in the murders of Henry Marshall, George Krutilek, Harold Orr, Ike Rogers, Coleman Wade, Josefa Johnson, John Kinser and John F. Kennedy. Caddy added: "Mr. Estes is willing to testify that LBJ ordered these killings, and that he transmitted his orders through Cliff Carter to Mac Wallace, who executed the murders."