Lee Iacocca becomes Lee Ayatollah, opens a Chrysler plant in Iran and is bombed by U.S. Tankers. Back at D.C. Follies, Bette Midler graphically describes to Fred the birth of her baby. Then Fred helps Mayor Koch design a campaign slogan. Richard Belzer, thinking of opening a comedy club in Washington, stops by to "work the room" and is arrested by Sean Penn. Dan Dierdorf, Al Michaels and Frank Gifford regale us with Olympic Moments. Sam Donaldson has an "Isn't it True" seizure and attacks everyone at the bar. Mayor Koch and Whoopi Goldberg discuss the homeless while Jesse Jackson and Pat Robertson discuss giving up their Reverend titles.