Leamas asks the court to let Liz go home, but the President insists that she be kept in custody until the hearing ends, saying that Fiedler may want to question her. Fiedler and Liz’s eyes meet and he seems to see that she is a fellow Jew and to sympathize with her. Fiedler says that Leamas is right, she can go, and then escorts her to the door. Leamas will not meet Liz’s eyes as she leaves the room, and she sobs uncontrollably as she is led out.
Liz and Fiedler are Jews living in two societies that pretend to accept them, but are anti-Semitic to their core. They have a moment of shared sympathy, and Fiedler decides not to interrogate Liz any further. He may feel that she has been treated badly enough already, and he sees that his fight to prove Mundt’s guilt is likely going to lead to his own downfall, whether or not he gets her to testify.
Leamas testifies that Karden was right: he was sent by the Circus to frame Mundt. They came up with all the details to incriminate Mundt. Leamas tries to make an excuse for Fiedler, saying he is not the only man who wanted Mundt dead. Leamas goes on to say that Smiley had always said something could go wrong, but that it was crazy for him to jeopardize the mission by paying his bills. He continues, saying that everyone did hate Mundt and want him dead, but that Fiedler had nothing to with the plot, although they knew that he would not want to protect Mundt because Fiedler is a Jew and Mundt is an anti-Semite. He goes on to describe the way Mundt tormented Fiedler, mocking him for his Judaism when he had him in custody.
Leamas believes that by confessing to the details of his mission, he may be able to save Fiedler from being blamed for London’s plot against Mundt and killed. He believes that he is now shedding his role, as he tells the truth about what the Circus instructed him to do. It does not occur to him that this confession was another part of the plan that he was never filled in on. He also draws attention to Mundt’s prejudice against Fiedler, although this will probably make the Tribunal even less sympathetic to Fiedler, as so many of them are anti-Semitic themselves.
Fiedler asks Leamas whether he believes that he really messed up the operation by falling for Liz. He says that it’s odd that Smiley sent money to Ford the grocer and bought the lease for Liz, if it was a plot to frame Mundt. Leamas shrugs and says that the Circus never expected that he would be brought to East Germany, and that he was a fool not to think Mundt might call in Liz to testify. Fiedler says that Mundt knew a great deal, even that Liz received the lease. After a moment’s hesitation, Mundt said he found out about the lease after Liz increased her party contribution.
Fiedler sees the truth that Leamas still cannot. The Circus sent Leamas on a mission to create suspicion that Mundt was a British spy, but then, unbeknownst to Leamas, sabotaged that mission. They did this because Mundt is, in fact, a British agent, and they wanted to draw suspicion away from him. Leamas fails to understand that the Circus messed up the mission deliberately, or why they might have wanted to do so.
The President says that the Tribunal is ready to make its report, and that Fiedler will be fired. The President continues, saying that another court will determine Leamas’s punishment. Then she looks at Mundt, who is staring at Fiedler. At that moment, Leamas suddenly understands “the whole ghastly trick.”
At the very moment when it’s too late, Leamas finally understands what Fiedler had been suggesting for some time. He sees that he was not sent to frame Mundt, but to frame Fiedler.