Eyewitness

"Eyewitness" is the twenty-seventh episode of Batman Beyond. It originally aired on January 22, 2000. Batman makes an enemy of Commissioner Barbara Gordon when she sees him murder a criminal in cold blood. Now he is a fugitive from the Gotham Police Department, led by someone who not only knows his secret identity, but knows every trick in the superhero book.

Plot
While on patrol, Batman sees a suspicious delivery being made late at night. Bruce warns him not to leap in before he understands what's going on. Terry sees money change hands, but before the cargo container is opened, he attacks, subduing its driver and several of the gangsters buying it. The buyers manage to escape, and Terry opens the container to find... a squad of armed police officers and a furious Commissioner Gordon.

At Wayne Manor, Barbara angrily tells Bruce that Terry has messed up a police sting that was in the works for a year. She's also looked into his background and discovered his juvenile record. Bruce vouches for Terry, but Barbara warns him, one more mistake, and she'll put an end to Batman.

The next night, Barbara is speaking at a benefit dinner for her husband, District Attorney Sam Young's, re-election campaign. The dinner is interrupted by Mad Stan, on his latest crusade against bureaucracy and corruption. Batman arrives and engages Stan in a brutal fight, driving him upstairs into a parking garage. Barbara follows with her gun drawn.

In the garage, she sees Stan bring out a massive bomb, which Batman disarms before knocking Stan to the ground. Stan taunts him, saying that he'll break out again and cause more destruction. Batman says he's right - and to Barbara's horror, picks up the bomb and brings it crashing down on Stan's head, twice. She turns her gun on him and orders him to freeze, but he turns and disappears. Other officers arrive and check Stan's pulse, confirming that he is dead.

Barbara immediately orders Terry arrested, and, when he isn't found at his mother's house, goes to confront Bruce herself. Bruce claims not to know where Terry is. Barbara warns him that Terry will be arrested as soon as he is found. Bruce points out that doing so will expose his secret identity, which will in turn expose Bruce's and her own. She knows that full well - and knows that doing so will likely sink Sam's campaign - but she is prepared to do it.

Terry is hiding out with Max. When Bruce calls him, he is shocked to hear the accusation and swears he didn't do it. Bruce asks him to explain Barbara's eyewitness testimony, and he can't. Bruce reviews the video from the surveillance camera, and finds interference blocking the view of the crucial moments. He decides to believe Terry, something strange is going on.

On his order, Terry leaves as Batman to examine Mad Stan's body. Breaking into the morgue, Batman finds that Stan's body is gone. Then an invisible intruder trips the alarm. Batman is cornered on the roof by the police. Barely managing to escape, Batman is guided by Bruce to the old Majestic movie theater, where there is an underground tunnel. But Barbara is waiting for him.

As the police close in on Batman, Bruce's computer finishes cleaning up the footage of the murder: it confirms Terry's version of events. Bruce looks closer at the video and sees a shadowy figure in the background. Wayne tries to contact Gordon, but Gordon refuses to listen.

He contacts Terry and tells him the intruder is likely there. Batman pretends to surrender to stop the police from shooting, then throws a batarang to reveal Spellbinder hiding behind Barbara, using an illusion to make himself practically invisible. He used his illusion technology to trick Barbara into "witnessing" Mad Stan's murder. "You were so ready to believe the worst," he taunts her, "it was easy." He is taken into custody.

Barbara apologizes to Terry, who accepts and takes off.

By way of further apology, Barbara presents Terry with a civic service award, earning him kudos from his mother as well. When he calls Bruce with the news, Bruce mentions that the police have found Stan, alive and well: inside one of Spellbinder's illicit virtual reality parlors, he sees himself blowing up City Hall, and is laughing his head off