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The actual investigation on this episode took a backseat to the new, evil character that was introduced during it.
First, to quickly sum up the case: Pete and Myka were tasked by Artie with tracking down a samurai sword meant as a git to the President. Apparently, it can be used for bad things because it actually makes one invisible.
As they get deeper into it, both agents ask Artie for more information, but he's even more closely-guarded and mysterious than usual. The reason? He suspects that a former partner of his is actually behind the stealing of the sword.
The case actually takes Pete and Myka back to D.C., where they are given a folder by their former boss Dickinson. It's a dossiere on Artie, one that sheds light on his past: he was suspected of espionage by the government. When confronted about it, Artie doesn't deny anything - he just says he had reasons for his actions - and then wonders: How did this information get leaked?
This simply solidifies Artie's suspicions that the culprit is a man he used to know named James MacPherson. Eventually, Artie comes face to face with James gets the sword away from him (by getting stabbed and having it lodged in his body), but cannot apprehend his rival.
At the end of the episode, Leena explains to Pete and Myka that Artie has been through a lot in his life, he's lost many people close to him, but he truly does care about them. Myka (who has her own father issues, remember) seems the most affected, and upset, by the way she's been treated by her boss.
Artie sees this on camera and is taken aback. But he's more afraid by his conversation with Mrs. Frederic: they wonder what MacPherson is planning next.