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Season 1, Episode 22:

No Good Deed

Reese is shadowing Finch one morning, trying to find out more about him. Finch is buying breakfast when he recieves a text message; he goes to the nearest payphone, picks up the handset, listens for a few moments, and hangs up before calling Reese to tell him they have a new number. When they meet, Reese asks Finch about how the Machine communicates, so he could carry on their work if something ever happened to him, but Finch simply tells him there is a contingency in place and says no more about it.

The newest number is Henry Peck, seemingly a financial analyst for a New York business firm but really an intelligence analyst for the NSA who works in their Manhattan listening post. As Reese and Finch observe, Peck is framed for drug abuse and fired from his job, and eventually a highly-trained assassin turns up at Peck's apartment and tries to kill him. Reese intervenes and saves Peck, but he gets away. With Finch eavesdropping, Peck manages to call the NSA Deputy Director: he explains that someone's trying to kill him for asking questions about a name that appeared in one of his reports, a name he'd never heard and didn't write, that single-handedly led to the government stopping a major terrorist act. He gets stonewalled, but Finch realises why the government is trying to kill Peck: he's unwittingly stumbled onto the Machine. Finch explains to Reese that the government department controlling the Machine is ruthless about keeping knowledge of it secret, implying that such ruthlessness resulted in his injuries. Peck contacts Alicia Corwin to try and find out more, but she only gives him one tiny clue to go on: "Sibilance".

Peck breaks into the NSA listening post to gather information, while Reese and Finch observe, not wanting to intervene and reveal any more about the Machine than Peck already knows. Peck discovers that "Sibilance" was an NSA digital audit, obliquely reavealing that massive amounts of intelligence data is being sent and recieved on a secret wavelength, and conclusively realises that the Machine exists. The assassin ambushes Peck at the listening post but Reese intervenes again. In order to expose what he knows, Peck gets himself arrested and tells everything to the first officer that talks to him -- which is Fusco, who simply dismisses Peck as a raving nutcase. Reese breaks Peck out of prison but isn't quick enough to stop him calling someone in the Office of Special Council; Finch reveals that someone high up in the Office is part of the Machine's inner circle, meaning their location has been compromised. From the phone call, the assassin is able to find Reese and Peck and take out their car. He and Reese fight, and Reese barely wins, but Peck gets away again. Finch intercepts a message from Peck arranging a meeting with a reporter for the next day, and shows up instead. He confirms Peck's suspicions about the Machine but encourages him to start a new life rather than continue asking questions, and gives him the money and means to do so. When asked how he knows all this, Finch admits it's because he built the Machine.

Most of Peck's evidence was destroyed in the wreckage of his and Reese's escape vehicle, but Carter finds a single scrap of paper that reads "Sibilance". Reese follows clues from around the library to find the coffee cart where Finch goes regularly, and then what he believes is Finch's house, but it's not: the sole occupant is Grace, an artist and Finch's ex-fiance who believes he died several years earlier. When Reese leaves, he sees Finch watching the house. Finch admits that he was engaged to Grace, and faked his death to protect her from the Machine.

In flashbacks to 2009, the Machine has been completed and Finch is making the final adjustments before it's turned over to the government; the hardware will be shipped via freight train to a secure location, and no one will have access to the servers or the operating system. Nathan is still upset about the "irrelevant" persons of interest being ignored, and also comments that Finch should start putting some time and effort inot his own life. Finch implies that there already is someone in his life, but Nathan doesn't believe it, sure that he'd know if Finch had met someone. Later, Nathan meets Alicia Corwin for drinks and to discuss the details of the handover, such as how the Machine's intelligence will be disseminated to the government and how many people know of its existance. Nathan offhandedly comments that only eight people know about the Machine, but Alicia corrects him: only seven people should know. He tries to pass it off as a mistake but she's unconvinced. Afterwards, Nathan returns to IFT to ask Finch about adding a contingency to the Machine, in case the government ever abused it, but Finch refuses on the ground that a backdoor would create a gap in the security that someone could exploit. Finch shuts down the Machine's hardware to prepare for the handover, but later, Nathan returns, reboots the system and adds a new core program called "Contingency".

In the coda, we revisit Finch's conversation with Peck, but learn that Alicia was sitting at a nearby table, listening in. She hears when Finch admits he built the Machine and is visibly shocked and scared by the revelation.

Tropes present in this episode include

 Nathan: Eight people in the world know it exists. We need to keep it that way.

Alicia: Seven, Nathan. Seven people, unless you told someone.

Nathan: ["Oh crap"] ...come on, Alicia, you know I'm terrible at math.

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