This is not a synopsis of the story but an explanation of it. There are major spoilers from this point on. If you haven't finished KGB, I advise you to stop reading, as this will likely diminish the enjoyment you can get from playing on your own. There are major plot twists which you don't want to know in advance if you want to experience the game the way you're meant to.
I can explain with certainty about 95% of the story, but the remaining 5% is open to interpretation. Most of the plot explained below is verified by facts stated in the game. I carefully thought about the missing bits and you are about to read the most plausible explanation I came up with. If you disagree with something I wrote and can offer a more convincing explanation, send me an email.
1983 : Maksim Rukov's parents are assassinated in a car explosion in Afghanistan by Verto and Yakuchev, on the orders of Viktor Galushkin. Rukov's father was a KGB member in active duty there, as well as his brother (Uncle Vanya) who was with him but survived the exposion, although he was confined to a wheelchair afterwards. The reasons for this assassination are unexplained, but because it took place several years before the game's events, it can be assumed they are otherwise unrelated and simply involve some previous internal KGB shenanigans.
1985 : Mikhail Gorbachev becomes the General Secretary of the Communist Party of the USSR (effectively making him leader of the Soviet Union) and launches in the subsequent years an ambitious program of reforms, notably with the concepts of Perestroika and Glasnost.
1990 : Gorbachev becomes President of the USSR, a newly created office. He repeals an article in the Constitution that gave the Communist Party supremacy over all other institutions in society, considerably hindering the Party's power.
1991 : This is when the game begins. The USSR is in a severe economic and political crisis, which some blame on President Gorbachev's reforms, and the power of the Communist Party is dwindling.
A group of hardliner communists are planning a coup to overthrow Gorbachev, whom they reckon is ruining the power of the Party, and replace him with one of their own people. They plan to kidnap Gorbachev and have an impersonator announce his resignation on TV, in favour of a hardliner communist. This group, who gives this project the codename "New Birth", is notably composed of KGB members Viktor Galushkin, Radomir Savinkov, Grigori Agabekov and major Vovlov, as well as Alfred Obukov. They are also helped by a corrupt CIA agent, Carla Wallace.
Their plan is almost ready. An unwitting comatose man named Protopopov has had his face remodelled to look exactly like Gorbachev, and has gone through a groundbreaking "personality restructuring" process in order to erase his real personality and make him recite a specific speech (the resignation speech) when triggered by a code word.
Colonel Kusnetsov, a corrupt power-hungry KGB official, is in their way. In order to distract him and eventually have him arrested and executed, they create an elaborate bait in the form of a snuff video tapes / crack trade. Knowing his corrupt instincts and his taste for money, they arrange for him to notice the trade and get involved in it, so that they can collect proof of his involvement and eventually expose him.
Meanwhile, Uncle Vanya, still working for the KGB undercover, has been investigating all along the murder of his brother. He was eventually led to Galushkin and picked up on the New Birth conspiracy. He asks major Vovlov, who secretly still works for him, to infiltrate the New Birth group. But Vovlov (who either was already part of the group, or joined them afterwards) is in favour of the coup and thus plays the role of a triple agent.
Uncle Vanya is old and confined to a wheelchair, preventing him to do any field work. Vovlov's position doesn't allow for much field work either. So Vanya pulls strings to have his nephew Maksim Rukov transferred to Department P, so he can continue the investigation.
Private detective and ex-KGB member Pyotr Golitsin is hired (unbeknownst to him, by the KGB) to investigate on the snuff tapes business. He eventually becomes aware that his mysterious employer, using the codename Jealous Husband, must be a KGB member, and he then attempts to identify him. This attempt results in his assassination. Whether convenient or planned all along, his death gives Vovlov an excuse to send Rukov to take over his investigation.
While he is told by his superiors that he is investigating the snuff tapes trade, Rukov's ultimate role in this plan is to find proof of Kusnetsov's involvement so that the New Birth conspirators can dispose of him. Savinkov meets with Rukov and encourages him to focus on Kusnetsov and ignore the other clues (which would point to their real project). But an anonymous informer, Cut-throat, sets Rukov on the right track by telling him Kusnetsov is unimportant and he should focus on Agabekov and his contacts instead. He also mentions New Birth to him for the first time. While Vovlov later claims to have sent Cut-throat, he was in fact probably sent by Uncle Vanya.
Eventually, Rukov finds sufficient reasons to be wary of his employers, and ends up spying on the New Birth conspirators instead.
Just as New Birth is about to come to fruition, members of Pamyat, a xenophobic and anti-communist radical group, kidnap Protopopov.
Thanks to Agabekov's interrogation of the nurse who helped her Pamyat friends with the kidnapping, the New Birth conspirators manage to find out where Protopopov is being kept and come to the rescue. But, meanwhile, Rukov's actions have panicked Savinkov into coming to Vovlov. Understanding that there have been major leaks and that the plan with Protopopov is now likely to fail, the ambitious and self-preserving Vovlov wants to make the most of the situation and attempts to switch sides. He kills Galushkin and Savinkov, who have become a liability to him as they know of his involvement. In order to destroy all evidence and also perhaps so he can claim he prevented the conspiracy and receive considerable honours, he attempts to kill Rukov and Vanya, but ends up getting killed by Rukov in self-defence.
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