Teddy, Margaret's son, prepares for his first confession, and the priest suggests Margaret should set the right example by confessing her own sins. However, she does not divulge anything about her relationship with Nucky, instead focusing on her burgeoning feelings for Owen Sleater.
Meanwhile, Nucky's attempt to skirt the law might be a lost cause. Senator Edge blackmails the Attorney General into putting a more capable prosecutor on the case by threatening to expose some dirty dealings with the veteran's bureau. However, Nucky continues to rebuild his bootlegging business, setting up a liquor drop in Philadelphia.
Jimmy reveals to Horvitz that he saw Herman Kaufman talking with Nucky and Waxy Gordon, Horvitz's enemy. Horvitz gets Herman to disclose the time and location of Nucky's liquor transfer before Jimmy slits his throat. Horvitz and Jimmy ambush the shipment, but the gunfire stops when Jimmy recognizes Luciano and Lansky as the hired muscle. The two groups agree to team up and take over the businesses of their aging predecessors.
Van Alden feels pressured to come clean about his corrupt ways, especially when he believes that Agent Clarkson is going to expose him. However, he changes his mind and returns home to find that Lucy has given birth to their daughter...and his wife has arrived to check up on him. Rose angrily leaves Van Alden despite his pleas that the child was supposed to be for the two of them.