A Klingon exchange officer on board the Enterprise, J'Dan, is suspected of being involved in a security breach and in the possible sabotage of the warp core reactor. With no clear resolution as to the cause of the explosion, Starfleet Command dispatches retired Admiral Norah Satie to head up the investigation. She is accompanied by two assistants, one of whom is a Betazoid. Worf discovers that a Hypospray used to treat J'Dan's Balthasar Syndrome is being used to convert digital information into amino acid sequences. J'Dan is interrogated, where it is revealed that he is indeed a Romulan collaborator, yet he remains adamant that he was not involved in the dilithium chamber explosion. Satie and Picard agree that J'Dan could not have acted alone, and that a larger conspiracy is present. They establish an agreement of mutual cooperation.
Following the questioning of medical technician Simon Tarses, who is noted as being one-quarter Vulcan, Satie's Betazoid assistant senses the young technician is hiding something. Afterward, Picard refuses to place restrictions on Tarses' movements based on Betazoid intuition alone. An analysis of the dilithium chamber finds that the explosion was caused by metal fatigue, due to a hatch casing with an undetectable defect being installed at McKinley Station. What happened, Geordi tells Picard, was not caused by sabotage or conspiracy, but was simply an unavoidable industrial error.
A subsequent (and now open) hearing reveals that Tarses, contrary to his Starfleet application, is actually one-quarter Romulanâan omission that threatens to bring Tarses' career to an end, and further fuels Satie's efforts to expose the non-existent 'conspiracy'. Afterward, Picard takes a confused Worf aside and attempts to determine his opinion on the matter; Worf is adamant that Starfleet does have enemies, and they should be revealed and punished. Picard is stunned by his sudden realization that Satie is engaging in a 'witch-hunt' among his crew, and likens the investigation to a drumhead trial -- summary justice dispensed on the battlefield, around an upended drum, where appeals were always denied. He speaks with a nervous and understandably upset Tarses in private to gauge his level of involvement in any conspiracy, and is satisfied that covering up his Romulan ancestry was his only misdeed. Picard meets with Satie to protest her unethical methods and call for an end to the hearings. She advises the captain that she reports directly to Starfleet Command on the proceedings and does not require his approval, and that the hearings will continue. On the bridge, Picard receives a summons to report for questioning.
Admiral Thomas Henry, who worked with Satie in the past, arrives to observe the hearings. Picard makes an opening statement about the xenophobic and paranoid nature of the investigation. Satie picks apart Picard's career aboard the Enterprise, citing numerous infractions of the Prime Directive, his capture and assimilation by the Borg, and finally directly questions his loyalty to Starfleet. Worf nearly loses his temper with the investigators over accusations regarding his heritage. While making his final arguments Picard quotes Satie's father, a prominent Starfleet judicator, about the path of limiting freedom. Satie furiously berates Picard for invoking her father's name in his own defense, stating that she has "brought down bigger men than you, Picard!"; Admiral Henry leaves the room in the middle of the tirade, having recognized Satie's paranoia for what it was. The Admiral's departure signals the end of Starfleet's support for Satie's personal vendetta; the prosecution calls a recess, and leaves a disgraced Satie sitting alone in the courtroom.
Worf later finds Picard in the observation lounge to inform the captain of Admiral Henry ending the hearings, and of Satie's departure from the Enterprise. Picard remarks that the human race thinks it's come so far, with the Inquisition and the Salem Witch Trials all an unpleasant memory, but all it took was a single person with an agenda to destroy two careers and almost cause panic in the Federation. Worf laments that he was initially quite eager to assist Satie in her witch-hunt, because of how she presented her case. Picard speaks of the ever-present, but subtle, danger of those who would spread fear and suspicion in the name of righteousness and (paraphrasing Thomas Jefferson) of the need for vigilance against mindless paranoia and fear-mongering.