After his release, he met Vivian Smythe at her motel, the Weary Traveler. He was soon hired as an informal handyman and, within weeks, had moved in with Vivian, later marrying her. They moved to Seattle, where they invested in an ultimately unsuccessful restaurant.
In March 1989, Ernie went to the Double R Diner in Twin Peaks with Vivian and was introduced to her step-daughter, Norma Jennings, who also happened to be Hank's wife. He got on the phone with the Great Northern Hotel, where they then left to get their room, as he had a fax from Tokyo waiting.
At dinner with his wife, Norma, and Hank, Hank Jennings, the women excused themselves and the men discussed their shared past in crime. However, Ernie revealed to Hank that he had changed his ways. When the women returned, Hank made a toast to Ernie and Vivian.
Ernie and Hank excitedly entered the office at One Eyed Jack's days later with a couple of girls, who they then dismissed and they discussed their future business as Jean Renault entered. Renault wished to use his computer expertise for a financial operation. A man then entered with cocaine to traffic and Ernie was taken to the casino by Hank.
Exhausted, he went to the diner the next day with Hank after their hunting trip. He said that he killed a 12-point buck. Norma told him that his wife had gone back to Seattle.
He was interrogated by Bryson and FBI Special Agent Dale Cooper, and confessed his guilt, claiming he did it all against his will. He explained the circumstances of the drug deal and Denise told him that he would be part of a sting operation for them.
The next day, Ernie contemplated making the call to Renault to set the buy, Denise trying to urge him into doing so. Cooper came in and when Denise called Ernie "gun-shy," he made the call, albeit reluctantly.
At the buy at Dead Dog Farm, Ernie's excessive sweat caused the microphone to malfunction and emit smoke, blowing his and Denise's cover. They were held at gunpoint until Cooper offered himself in exchange for them.
In exchange for his cooperation, Ernie was cleared of any wrongdoing. He returned to Seattle, finding that Vivian had moved him out and filed for divorce. Subsequently, Ernie reverted to a life of crime and experienced bankruptcy, poverty, and alcoholism.