A YJA Moment - Fear State

When Sebastian Hady became Mayor of Gotham in 2019, he won on a "law and order" platform. Gotham had seen nearly half-a-century of crime and corruption and its citizens were more willing to give unproven but charismatic candidates the keys to City Hall. This was all before the Apokolips Invasion, which increased Gotham's woes a hundredfold. 

 The city was in desperate need of aid, and while S.H.I.E.L.D. provided food, shelters, and the added protection, they weren't enough to deal with the rot within the system. Hady petitioned the World Security Council and the New Earth Government for action and it was received. Hady was named Magistrate of the Gotham Special Security Zone and given unlimited power to fix what he perceived were the ills of the city. 

Waves of firings followed, including the entirety of the Gotham City Police Department. He brought in Christopher Smith and his private security firm, the Peacemakers, in order to provide law enforcement within the city limits. Without Gordon's influence, all heroics were banned in Gotham and arrest warrants were issued for the entire Bat-Family. Only Smith and his cop-army were allowed to patrol the streets. 

Few people understood that before Sebastian Hady's tenure in municipal government, he was a long-standing member of the Court of Owls, a secret society made up of the wealthiest and most powerful families in Gotham. They had enriched themselves at the expense of every other citizen. His influence with the Court led him to be recruited as a regional director of the public face of Checkmate before it collapsed. 

During his tenure at Checkmate, he had learned about their experimentation with the biochemical agents used by Dr. Jonathan Crane, the Scarecrow. Hady had come to the conclusion that he could use that research to develop a gas capable of sapping emotions and creating a mental state open to suggestion. 

Granting Crane freedom in exchange for his assistance, he put him to work creating what was effectively an Anti-Fear Toxin. He also hired Amora, the Asgardian Enchantress in order to enhance its effects, once the proper chemical balance had been achieved. Operating out of Arkham Asylum, Project: Baseline made a lot of progress, but mistakes were made and word reached the streets. 

Bruce was too busy dealing with the fallout of Yutani's takeover of Wayne Enterprises but sent Tim Drake to notify the Mythic Avengers. The team took action, by revealing the existence of Project: Baseline to media outlets, while Mel used her power of dreams to influence Mayor Hardy in his sleep. In the resulting firestorm of controversy, Mayor Hady abruptly quit and handed the role of Magistrate to Jim Gordon. 

Jim Gordon immediately signed an accord with the Sword Nations to place Gotham under their protection pending a city-wide referendum regarding becoming a permanent Treaty-State. He then began the process of reestablishing the GCPD and all the other disbanded agencies in order to once again provide goods and services to the populace. 

The New Earth Government threatened military intervention but S.W.O.R.D. accurately predicted it was mostly bluster. While S.H.I.E.L.D. could have successfully defeated the Sword Nations in a conflict, it would have taken resources that were already allocated to urgent needs across the world. In the end, the N.E.G. was certain that Gotham would have to return, that they took no action to stop them.