A reformed criminal by March 1989, Ernie went to the Double R Diner in Twin Peaks with his new wife, Vivian Smythe Niles and was introduced to his step-daughter, Norma Jennings. He got on the phone with the Great Northern Hotel, where they then left to get their room, as he had a fax from Tokyo waiting.
At dinner with his wife, daughter-in-law, and Norma's husband, Hank Jennings -- with whom Niles had criminal ties -- the women excused themselves and the men discussed their shared past in crime. However, Ernie revealed to Hank that he had changed his ways. When the women returned, Hank made a toast to Ernie and Vivian.
Ernie and Hank excitedly entered the office at One Eyed Jack's days later with a couple of girls, who they then dismissed and they discussed their future business as Jean Renault entered. Renault wished to use his computer expertise for a financial operation. A man then entered with cocaine to traffic and Ernie was taken to the casino by Hank.
Exhausted, he went to the diner the next day with Hank after their hunting trip. He said that he killed a 12-point buck. Norma told him that his wife had gone back to Seattle.
He was interrogated by Bryson and FBI Special Agent Dale Cooper, and confessed his guilt, claiming he did it all against his will. He explained the circumstances of the drug deal and Denise told him that he would be part of a sting operation for them.
The next day, Ernie contemplated making the call to Renault to set the buy, Denise trying to urge him into doing so. Cooper came in and when Denise called Ernie "gun-shy," he made the call, albeit reluctantly.
At the buy at Dead Dog Farm, Ernie's excessive sweat caused the microphone to malfunction and emit smoke, blowing his and Denise's cover. They were held at gunpoint until Cooper offered himself in exchange for them.