Batman, disguised as Lester Kurtz, joins both the Joker's gang as well as the Penguin's. Naturally, he has to pass an initiation for each crime boss before he can be admitted, but encounters obstacles with each.
For the Joker's group, he satisfies Joker's initial requirements but, seeing potential difficulties with the other thugs in the group, leaves to try out for the Penguin.
For his test, The Penguin dispatches him along with some other thugs to intercept a mobile armory before the Joker's men can get to it. This van is filled with enough weapons to secure ownership of Arkham City for whichever group that captures it. Although Penguin's group does reach the van first, they are quickly interrupted by the Joker's. In a calculated move to both minimize casualties and prevent the weapons from getting into the wrong hands, "Lester" simultaneously destroys the weapons, disperses Joker's group, and clears a way for the Penguin's men to escape.
Furious about the loss of weapons, but grudgingly sold on Kurtz's logic at the behest of a thug whose life he saved, Penguin orders Kurtz to be locked up until the next day so he can lead a strike against the Joker. Kurtz escapes without incident.
While these experiences leave Batman with more of a knowledge of the civil unrest between Joker's and Penguin's groups, it brings him no closer to discovering the mastermind behind the construction of Arkham City.