|“||The toxin his father injected him with overloaded Jonathan's fear response. His mind created a sort of boogeyman figure, now it haunts him. I find it very useful for controlling him... Jonathan, you're going with these men!||„|
|~ Reed sells Jonathan to the gangsters|
Reed is the warden of Arkham Asylum, having taken over the position of the equally - if not more - corrupt Professor Strange. Reed is dispassionate about his work and uses opportunities to make some money on the side. As his corruption seems to be well known among the employees at Arkham, one former orderly - who meanwhile has joined a criminal gang - eventually contacts Reed. Crime in Gotham City has recently been licensed by Penguin and the criminal gang is not willing to pay up to Cobblepot. To find a way to protect themselves against Cobblepot, they contact Reed who knows a solution.
Reed introduces them to one of his inmates, Jonathan Crane. He reveals to the gang that Crane was subjected to a high dose of fear toxin by his father Gerald, which overloaded his fear reception and caused him to feel great fear whenever confronted by something that resembles a scarecrow. Reed mentions that he exploits this fear to keep Crane under control. The gang leader then pays Reed, who then gives Jonathan up to them.
Directly after the gang's first robbery with fear gas, GCPD detective Jim Gordon connects the attack to Gerald Crane. He and his partner Harvey Bullock head to Arkham where they meet up with Reed. They want to see Crane but Reed prevents it. When Bullock asks whether any of the employees or orderlies have not come in for work that day, Reed denies it without even looking. Bullock sarcastically calls it remarkable that Reed knows about the comings and goings of all his employees and claims that he wouldn't even be able to recount that for his own police force. Reed drily replies that it seems that the two of them have a different work ethic. From Reed's reactions, both Gordon and Bullock deduce that he has a hand in the fear gas attack. In order to make him talk, Gordon threatens that they will unleash Penguin's top-hitman, Victor Zsasz, on Reed as Reed openly defied Penguin's licensing business. Fearing violent retribution from Penguin, Reed gives up the name of the former orderly, but adds that they forced him and that he didn't have a choice.
After Gordon and Bullock have left, Reed starts burning some of his incriminating notes to destroy evidence against him. While doing so, he is suddenly confronted by Jonathan Crane, fully dressed in his Scarecrow-attire. Crane asks whether Reed is trying to cover his dirty footprints but claims that it is too late - Reed's deeds have already stained him. Reed asks how Scarecrow managed to get into the building and Crane replies that he picked up a thing or two during his three year long imprisonment. Surprised, Reed realizes that he is being confronted by Jonathan Crane. Crane confirms it but claims that he is no longer the frightened boy he was anymore. Angry and bitter, Crane mentions that Reed did nothing to help his psyche, his ways of "treating" patients were ice baths and shock therapy. Reed tells Jonathan that he could just leave and promises that he wouldn't tell anyone. Crane claims that he has no intention of leaving. He claims that he managed to cure himself - he was afraid of the scarecrow and now they are one. When Reed jumps towards his desk to get his gun from one of the drawers, Crane douses him in fear gas.
Reed immediately starts hallucinating his greatest fear - monster clowns. While one of these clowns seemingly attacks Reed, Jonathan muses on how Reed's fear is most likely a childhood fear. He then tells Reed to face his fears, causing Reed to get the gun from the drawer and shoot at the hallucination. When Reed storms out of the room, several orderlies that are worried about their boss approach him. However, Reed - who is still under the influence of the fear gas - believes them all to be clowns come to get him and shoots them all dead, heading deeper into the asylum in his fear.
When Jim Gordon investigates the riot at Arkham, he is suddenly ambushed by Reed. Having taken Crane's adivse to heart, Reed has painted his face with clown make-up and has seemingly turned completely insane. Laughing, he attacks Gordon until Gordon aims his shotgun at Reed, causing Reed to run off into the asylum.