Seven years later, Taggart is a private detective on the verge of bankruptcy when he's hired by Hostetler to find out who his wife Cathleen Hostetler (Catherine Zeta-Jones) is having an affair with. Helped by his assistant, Katy Bradshaw (Alona Tal), Taggart learns that Cathleen is seeing Paul Andrews (Kyle Chandler), the campaign manager of Hostetler's rival in the upcoming elections, Jack Valliant (Barry Pepper).

Taggart attends a fundraiser for Hostetler's campaign, where Cathleen reveals that she knows Taggart is following her, and advises him not to become involved with Hostetler. However, Hostetler gets the envelope with the pictures that Taggart has taken of Cathleen meeting with Andrews, and Andrews is found dead shortly afterwards.

Fairbanks interrogates Taggart, who admits he had been hired by Hostetler. They talk with Valliant, who reveals that Andrews was meeting Todd Lancaster (James Ransone), son of Hostetler's associate, contractor Sam Lancaster (Griffin Dunne). Taggart then meets with Cathleen, who reveals that Andrews actually provided her with information about Hostetler's plans for the Bolton Village Housing Project. Hostetler wanted to find out Cathleen's source, and manipulated Taggart to lead him to discover who it was.

Taggart investigates Sam Lancaster's construction business, and learns that Hostetler has sold the Bolton Village in order to have it demolished and replaced by office buildings, leaving hundreds of impoverished people homeless for his own profit. However, he is attacked by Hostetler's men, who destroy the evidence he has acquired. Taggart then locates Todd Lancaster and interrogates him. Todd reveals that he disagreed with Hostetler's plans and intended to give Andrews the demolition contract as evidence against Hostetler the night he was murdered. He gives it to Taggart instead, and Taggart confronts Hostetler, who reveals that he has the evidence that Taggart murdered Tavarez, and will leak it to the press if Taggart pursues him further.

Taggart accepts to be arrested to prevent the reelection of Hostetler and thereby the demolition of Bolton Village for the benefit of the poor, including Natalie's family. Fairbanks arrests Hostetler and Taggart has to say his goodbyes to Katy and reminds her that they'll return to business once he's released from prison.