Harry rides the bus. He looks out the window of the bus as the lights begin to flicker and the bus stops. The scene shifts to show the couple whom Harry was surveilling, engaged in conversation. The woman touches the man’s glasses, eventually kissing him, as people walk by in the foreground. The scene fades back to Harry on the bus, recalling the scene between the couple, as the bus moves again. The scene fades.
The exterior of a large, modern office building. Inside, Harry approaches the main desk and speaks to the man there, telling him he has a package. When the man at the desk says that he will deliver it, Harry insists that he has an appointment to deliver it personally. The man at the desk checks his schedule and calls to announce that Mr. Caul has arrived. Harry then sits to wait for the director’s assistant to come down and fetch him. The shot cuts abruptly to Harry walking alongside the director’s assistant. We can hear the clicking of typewriter keys, as the duo walks down the sunny hallway past other office workers.
In another office, the assistant sits behind his desk while Harry waits again in a seating area. Eventually the assistant stands and leaves the room, but not before offering Harry one of the Christmas cookies that he made. Harry tells him he doesn’t want one and waits some more. He sits in the silent room for a moment, before standing and smelling one of the cookies, then looking through a telescope in the office. The assistant reenters, interrupting Harry’s peering through the telescope, and gives him an envelope with $15,000, their agreed upon fee. Harry tells him that he had an arrangement to give the tapes to the director personally, and the assistant nods, but tells him that the director is not there that afternoon, and is, in fact, out of the country. When the assistant tells Harry that he was given instructions to give Harry the money and accept the tapes, Harry inspects the envelope of payment. He picks up the envelope, puts it back on the desk and grabs the tapes, telling the assistant that he can wait. However, the assistant grabs the tapes and the two men struggle for them. Harry eventually takes possession of the tapes, but the assistant warns him, “Don’t get involved in this Mr. Caul, those tapes are dangerous." Harry looks confused, and the assistant continues, “You heard them, you know what I mean. Someone may get hurt.” Harry takes the tapes and leaves, as the assistant watches him.
Harry walks down the hall of the office, carrying the tapes, followed by the assistant who warns him yet again to “be careful.” He walks towards the camera and around the corner to the elevators. He sees two men waiting for the elevators, one of whom is the man from the couple heard on the tapes. The man turns around and sees Harry, but does not recognize him from the square, so turns back to his conversation. The man and his companion get on an elevator. At the end of the hall, Harry sees the director’s assistant watching him, and gets into the elevator. Just as the elevator door closes, we see the assistant peering around the corner. A close-up of Harry’s face show his concern at what just happened. The elevator stops on another floor and other businesspeople get on. When the elevator stops again, the woman from the tapes gets on, as the eerie score begins to play. Harry holds the tapes close to him, and other people get off the elevator; it is just him and the woman now. Harry moves to the other side of the elevator.
A close-up of the tapes. Harry is listening to them in the warehouse office again, particularly the part in which the woman teases the man for not revealing what her Christmas gift is. He rewinds the tape to a part in which the woman sings, “When the red red robin….” Harry skips to another part, and we see the couple talking again. The man says, “Who started this conversation anyhow?” The woman tells him, “You did.” Harry seems dissatisfied and skips to yet another part of the tape, a moment in which the woman tells the man, “Pretend like I just told you a joke,” and the couple laughs falsely. Harry skips again. “Does it bother you, walking around in the circles?” the man in the tape asks the woman. Harry listens to the part of their conversation where they looked at the homeless man, and we see a closeup of the sleeping homeless man’s face on the bench. “He’s not hurting anyone,” says the man. “Neither are we,” says the woman, lost in thought. Harry listens to the tape, stopping it abruptly. Stan, who is also there, asks if he wants to take a break and get a beer. Harry doesn’t want to, and keeps listening.
As Harry listens to this portion of the tapes, we see the couple talking in the square, followed by the mime. “Do you think we can do this?” the woman asks. “I’m tired of drinking anyhow,” the man says, before adding, “I’m tired of mostly everything.” Stan keeps interrupting the tapes to berate the vague conversation between the couple. Harry scolds him, telling him that he needs to get it done, eventually getting angry. “I’m getting fed up…about your asking me questions all day long,” he tells Stan. When Stan is surprised at how angry Harry is, he says “Jesus!” and Harry scolds him yet again for using Jesus’ name in vain. Stan is confused as to why Harry is so upset. Harry simply tells Stan, “Your work’s getting sloppy,” and goes back to the tapes. The couple—whose names, we will eventually learn, are Mark and Ann—are shown again, and he tells her, “Later in the week, Sunday, maybe.” Ann replies, “Sunday definitely.” Stan continues to press Harry about why he’s so upset, and Harry insists that he can’t talk about the personal problems of his clients.
Harry returns to the tapes, in which Mark says to Ann, “Jack Tar Hotel, 3:00, Room 773.” Meanwhile, Stan tells Harry that he should involve him more in their work. Harry gets angry, “It has nothing to do with me, and even less to do with you.” The two men argue and Stan tells him that he’s simply curious, and that it’s human nature. Hearing this, Harry becomes flustered, and tells Stan that the one thing he knows from doing this work is that he knows nothing about human nature or curiosity, and that he is simply doing his job. As he continues to listen to the tapes, Stan mounts a motorcycle in the open space of the warehouse behind him, and we hear a recording of Ann saying, “I think he’s been recording my telephone.” Harry rewinds yet again and we hear Ann tell Mark that she loves him, and Mark tell Ann that he thinks they’ve been spending too much time together in the square. “Let’s stay just a little longer,” she says, as they approach the drummer in the square. We see Mark say something to Ann, but his voice is inaudible and distorted, and Ann looks concerned. In his office, Harry struggles to make out what they are saying. We see Mark utter the distorted remark yet again, and Harry keeps rewinding to try to make it out. The remark is impossible to understand and Harry considers how to clarify it. He plugs a device carefully into the machine to filter the recording to make it more audible, and listens again. Mark’s comment is still distorted, so Harry filters it even more. He can make out the remark now. Mark is saying, “He’d kill us if he got the chance.” Harry stops, and looks at the photo of the couple hanging on his wall. The camera flashes to show the various tape-playing instruments. He rewinds and listens again to the part where Mark warns Ann that their lives are in danger. The ominous piano score comes back in as Harry turns off the listening device, a grave expression on his face.
The scene shifts to the interior of a Catholic church, lit by candles. Harry sits in a pew praying, as a boy walks up the aisle to take his seat in a pew. Harry goes into a confession booth and tells the priest that it has been three months since his last confession. He then confesses to the priest that he has taken the lord’s name in vain, and then falters, unable to confess his next sin. Finally, he says that he has taken newspapers from the racks without paying for them. He hesitates again before stating his next sin, “deliberately taking some pleasure in impure thoughts,” and then finally tells the priest that he has “been involved in some work that I think will be used to hurt these two young people.” He goes on to confess to the priest that his work has hurt people in the past. Stammering, he says that he is not responsible for the deaths, but they clearly weigh heavily on him. We see the priest through the screen, nodding his head as he listens.
The scene shifts abruptly to a television set, which depicts security tape from a store, and we are transported to the convention about which the men were talking earlier. Harry approaches a table at the convention, introduces himself and asks to hear about their system. The man at the table brings him over to look at a surveillance device for the telephone systems. We then see a man enthusiastically advertising a surveillance device. Meanwhile, a man shows Harry a burglar alarm which indicates “exactly which door has been violated.” Another man advertises a clock with a built-in camera. Harry wanders over to another table, where a man tells him about a device which begins recording as soon as a phone is lifted from a receiver. Harry is distracted, but the man continues to explain the device. As Harry turns back and asks him to repeat himself, the man says, “It’s not your old-fashioned voice actuator.” Harry asks him if it’s anything like the Moran actuator, but the man tells him that the Moran actuator is a copy of his. The salesman asks if Harry works in law enforcement or as a private operator, and Harry tells him he is private. When the salesman asks for his name and address for their mailers, he suddenly recognizes Harry Caul’s name and asks to give him a device free of charge, so that the company can print that Harry used it in their flyer. Harry assures him that he builds all his own equipment and walks away as the man asks to take a picture of him in front of the booth to boost sales.
Harry approaches a security television, and examines himself on the screen. He shifts the perspective of the surveillance camera, which reveals Martin, the director’s assistant who warned him earlier, walking around the convention. Later in a dark lecture hall, Harry takes a seat as a speaker presents on a piece of technology. Paul, the cop who helped with the surveillance in the square, greets Harry, and Harry tells him that he is wearing a nice suit. Paul invites Harry to go get a drink and talk, and they walk out of the lecture room. Out in the convention room, Paul introduces Harry to Bernie Moran, who recently moved to San Francisco from Detroit. Paul gushes, “He’s the fellow that let Chrysler know that Cadillac was discontinuing its fins.” “I heard,” says Harry, unimpressed. Bernie then tells Harry that he’s been trying to get ahold of him for a long time. Paul asks if Bernie can take five minutes off to get a drink, and Bernie says he can do so after his demonstration, beckoning over a woman named Meredith to join him. Bernie begins to demonstrate his surveillance item—a phone which will record conversations in the dialed number’s house without calling that number—as Meredith demonstrates the device. The phone allows for the user to call a house without the phone ringing and listen in on whatever is going on there. Bernie then demonstrates how the phone works by calling his own home, pausing before the last digit of the number and blowing a small harmonica into the receiver. The conversation that takes place in the surveilled home is a staged one between Bernie’s wife and a man who asks where her husband is, and begins to seduce her. The convention goers laugh at the staged infidelity scene, and Harry seems unimpressed. As the demonstration ends, Bernie asks how they liked it and puts a free pen in Harry’s breast pocket. Harry looks at the pen suspiciously for a moment, and the three men go to get a drink. Before leaving, Bernie calls over one of his employees to man the booth while he’s gone. Harry is surprised to see that the employee is Stan, who smirks at Harry. The men go to get a drink, Paul and Bernie speaking lewdly about various women at the convention; Harry says he’s going to stay and talk to Stan.
In this section of the film, we see further evidence of the fact that Harry’s work in surveillance and his loneliness are interconnected. After leaving Amy, who has just broken up with him, Harry sits sadly on the bus and thinks about the couple he is surveilling, remembering the intimacy with which they touched and kissed each other. His split with Amy makes him consider the intimacy of the people whom he has been charged with watching, and we see that he is incapable of achieving this same intimacy. Harry works in surveillance precisely because he does not have a life of his own, and he does not have a life of his own because he works in surveillance. Harry’s loneliness and solitude are in a cyclical relation. He longs for that which he cannot give himself: the warmth of intimacy. When Amy initiates intimacy, asking him more about himself, Harry pulls away; no one can know too much about him or his work. Thus we see that Harry’s concern is other people’s lives, not his own.
The way that the film is shot helps to create a sense of alienation, and in this part of the film, suspense. Open spaces are frequent settings in the film, and the austere, modern office building where Harry's employer works becomes the place where suspense begins to build. Harry’s surveillance job, which has been vaguely creepy but seemingly humdrum, becomes tense and suspenseful once Harry meets the director’s assistant. While the assistant wants to accept the tapes himself and pay Harry, Harry insists that he has explicit instructions to deliver the tapes to the director himself, which causes a small struggle over the tapes. The assistant warns Harry that the tapes are dangerous, but Harry dutifully stays in possession of them. As he walks out of the assistant’s office, he walks down an echo-y corporate hallway towards the camera, and the assistant emerges behind him, giving him one final warning. Then, after he sees the man from the tapes near the elevators, we once again see the director’s assistant at the end of the hall, watching Harry’s recognition of the man before he gets on an elevator. As Harry gets on the elevator, the viewer just barely sees the assistant through the corner of the closing elevator door. These long shots provide a sense of suspense. While the viewer is not sure what the nature of the danger is, the distance between the men, the polite demeanor that they feel compelled to maintain in a corporate setting, and the tensions between them about who knows what escalate rather quickly, in large part because of the way the film is shot.
In this section of the film, more and more is revealed about Harry’s unusual personality. When he visits the director’s office, we learn that he makes quite a bit of money producing these tapes—$15,000 to be exact. However, that amount is not enough to convince him to simply drop the tapes off without giving them directly to the director. He resists taking his fee in favor of holding on to the tapes and following instructions. His sense of duty is central to his temperament. Sensing something is awry with the tapes, he becomes obsessed with them, and listens to them meticulously. Harry is committed to his job above anything else. His sense of duty, perhaps, comes from his faith. In this section we also learn that Harry is a religious man. When Stan uses the word “Jesus” as an expletive, Harry grows impatient and tells him to not “use that word in vain.” Later, we see him in a Catholic church, praying. Harry’s apparent faith makes him all the more mysterious. How can a man who works in such a seedy industry, one that depends on deception, also be a man of faith? The two qualities don’t seem very compatible. Yet it is Harry’s sense of duty, both professional and spiritual, which drives him to make the most ethical decision at every turn. Harry proves himself to be a rather unusual antihero, as he embarks on his obsessive quest to untangle the mystery of the tapes.
In this portion of the film, Harry remains entirely allergic to personal relations, and stays invested in the facts and duties of his job above all else. When the director’s assistant tries to convince him that he is authorized to take the tapes from him, he does so in a casual, personable way, but Harry insists on keeping them, unpersuaded by mere personableness. Social niceties do not have an effect on Harry’s sense of right or wrong. His expertise is not simply his work in surveillance, but also his attachment to instructions in lieu of personal affinities. Later, when Stan wants to talk more personally and subjectively about the conversations on the tape, Harry gets angry with him, and tells him that it is not in line with the duties of their job to be curious about the lives of the people they are surveilling. While Harry would appear to have an unnaturally curious attachment to his subjects, it is less from a place of nosiness than from a desire to do his job well and keep people safe. Ironically enough, the man who is delving deep into the lives of people he doesn’t know has no interest in personal relations or gossip. For Harry, the job of a surveillance expert is about safety, not titillation.
An expository piece of information clarifies some of Harry’s idiosyncrasies. When he visits the confession booth at the Catholic church, Harry confesses to the priest that in the past, people have been killed because of his surveillance work, and that he is worried that the same thing will happen with this case. Harry’s anxiety and meticulous obsession with doing his job well is both an extension of his unusual temperament, and the result of a feeling of guilt from the past. While Harry is not responsible for the murders that took place before, he feels as though he is, because his surveillance work is what led to the people being killed in the first place. Even though Harry works in the seedy world of surveillance, he has a strong conscience, bolstered by his faith.