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The KGB (Komityet Gosudarstvyennoy Byezopasnosti- "Committee for State Security", not to be confused with the Centre of Moscow, that is only a nickname for the part of Moscow within Sadovoye (Garden) Ring) and its predecessors, the State Sec of the USSR as well as its (technically) civilian foreign intelligence agency, though it used a military ranking system.
The name of this title is the way Soviet intelligence is referred to in the works of John Le Carre, but was also an internal name used by the KGB.
The first thing you'll need to know is that the Soviet state security service was named "KGB" only after 1954.
It was originally formed in 1917 as the Cheka ("Extraordinary Commission"), shortly after the October Revolution and led by Felix Dzerzhinsky. It was originally supposed to be a temporary body to ensure security during the extraordinary circumstances of the Russian Civil War (hence the name). But, by the end of the war, it had grown powerful enough to make itself... somewhat less temporary. Also, it originally dealt only with suppressing dissidents, but acquired a foreign intelligence section in 1920.
During Stalin's time, the OGPU ("Joint State Political Directorate"), later merged into the NKVD (People's Commissariat for Internal Affairs), which played a central role in the Purges. The Great Purge of 1936-38 was called the "Yezhovshchina" after the then-NKVD chief Yezhov. The organization was not exempt from the purges, with officers denouncing others then getting denounced themselves. Eventually, Yezhov himself was purged (for the crime of purging innocent people, ironically enough), and replaced with Lavrentiy Beriya. Who was less trigger-happy, but, unfortunately, completely insane.
After the war, it became the MGB (Ministry for State Security) in 1946. It lost foreign intelligence for a while and in 1953 was merged into the Ministry for Internal Affairs for a year. This was done by MGB chief Lavrentiy Beriya. After Stalin's death Beriya, as well as many other Politburo members, took part in a fierce competition to get supreme power. The first part of this consisted of everyone joining forces against Beriya, who was considered too dangerous to live, let alone rule the USSR. After he was safely dead, the remaining Politburo members could have a nice, civilized power struggle in which the losers were merely disgraced and demoted, as opposed to being shot. It's said that Beriya begged for his life before he was shot, something people considered a kind of poetic justice given that he sent so many others to their deaths without mercy.
Becoming the KGB in 1954, the body spent the rest of its time conducting internal repression and foreign espionage (though internally it was not all repression — KGB handled high-profile crime the same way the FBI does). Its head from 1967-82, Yuri Andropov, would become leader of the USSR for two years from 1982 until his death in 1984.
Soviet intelligence engaged in some very successful intelligence operations against the West before and during the Cold War, including:
- getting key information on the Manhattan Project,
- getting five agents, the Cambridge Five, into pretty high positions in British intelligence,
- including almost getting one, Kim Philby, to the head of SIS itself, before he defected to the USSR
- Via mole John Anthony Walker, getting info on US naval technology that helped make the "Victor III" and "Akula" classes significantly quieter than their predecessors
- Who literally walked in and offered his services
- Finding and assassinating Leon Trotsky, one of the original leaders of the October Revolution, who just wouldn't shut up in his criticism of Stalin, whom was convinced that Trotsky was an all-powerful leader with an army of revoloutionaries who was going to kick his ass. When really, he was just an old man whose son's chief adviser was a (KGB) agent. Stalin ordered him killed because he was crazy.
The KGB also engaged in some assassination operations, mainly of defectors, working with other allied organisations to do this. The most infamous in 1978 of Georgi Markov, a Bulgarian living in London, involved an umbrella filled with ricin. The statute of limitations recently expired on that case, with no one being brought to justice. May have been behind the attempted assassination of (Polish) Pope John Paul II in 1981. Allegations that Lee Harvey Oswald was in the KGB's employ have little to substantiate them.
After its role in the failed August 1991 coup, the organisation was dissolved. Its successor as the main domestic security service is the FSB (Federal Security Service). Foreign intelligence was taken on by an organisation called SVR (Foreign Intelligence Service), something that fiction writers tend to forget.
The current Prime Minister of Russia, Vladimir Putin, was a KGB officer; he has brought many of his ex-KGB colleagues into powerful positions in government. Ever since Putin took power, the joke about the SVR and FSB (and especially the FSB) has been "new name, same friendly service."
By the way, the Belarussian branch of KGB wasn't dissolved. It still exists under this very name. Contrast with neighboring former Soviet nation, Lithuania which has turned their old KGB building into a museum of sorts against such forces.
The KGB was run by the Chairman of the KGB, who led a Collegium that included a number of First Deputy and Deputy Chairmen, as well as Directorate heads.
Key units in the KGB included:
- First Chief Directorate (Foreign Operations): Who dealt with foreign operations.
- Possibly included Vympel, a special operations group dealing in things like sabotage.
- Second Chief Directorate: Internal political control.
- Third Chief Directorate: Monitoring the armed forces.
- Seventh Directorate (Surveillance): Monitoring foreigners and suspect Soviets.
- Included the still-existing Alfa Group, the KGB equivalent to Spetsnaz GRU, responsible for counter-terrorist operations and other stuff of that nature, including storming the Presidential Palace in Kabul in the opening attacks of the Soviet Invasion of Afghanistan.
- Border Troops Directorate: Patrolled the borders, including with frigates.
Not to be confused with the GRU
It is important to not to confuse the KGB with the GRU (Glavnoje Razvedyvatel'noje Upravlenije- Main Intelligence Directorate). The latter, still existing, is a military intelligence service and existed partly as a military check on the power of the KGB. The GRU primarily focused on external intelligence and security, while the KGB dealt with the internal, but there are exceptions to this rule in both camps. Regardless, the KGB gets more attention in fiction.
The difference is similar to the difference between the CIA and the NIS (Naval Intelligence Service) or USAMI (US Army Military Intelligence).
The KGB and its predecessors have featured in thousands of works of fiction, mostly set during the Cold War.
KGB agents have a reputation for ruthlessness and a distinct lack of scruples. Their ladies are often a Honey Trap or The Baroness and the organisation attracts assassins like rotten meat attracts flies. Torture is definitely on the menu.
Operatives can often be found in the refugee community, often in the role as "illegals", with fake identities and "legends" (entire falsified backgrounds).
- Supervillain KGBeast from the DC Universe.
- Spirou and Fantasio In Moscow has the duo "recruited" to help KGB track down Fantasio's cousin Santafio, who is posing as the rightful Heir to the Czar.
- A great number of James Bond villains (in the books anyway) are Soviet agents of some sort. In the films, the KGB-affiliated bad guys are usually renegades -- General Gogol, the head of the KGB for most of the Roger Moore era, only goes as far as Friendly Enemy status in For Your Eyes Only, and in A View to a Kill he even gives Bond a medal.
- The antagonists in many of John Le Carre's novels, particularly the Smiley books, work for Russian intelligence, which is referred to as "Moscow Centre" throughout, as mentioned above.
- A majority of Tom Clancy's fictional works involve the KGB or its successors. Until the last few Ryanverse novels, people of Moscow Centre were always cast as the antagonists, though infrequently as outright villains.
- In Harry Turtledove's Worldwar, several of the Soviet characters have to deal with NKVD interference During the War. As this is an Alternate History, the butterfly effect means that the service is still called the NKVD by the 1960s, at which point its leader Lavrenti Beria launches an unsuccessful coup.
- Appear in various roles in Martin Cruz-Smith's Gorky Park series of books, particularly the earlier ones that took place during the Cold War. Notably, in the second book, Polar Star, Renko discovers that a suspect in his investigation works for the GRU, and once he gets him alone, is able to get him to spill everything he knows simply by implying that he is with the KGB by using what is implied to be their catchphrase 
- The KGB plays a key role in Airwolf, stealing the titular chopper in the pilot and making several attempts to steal it again through the series.
- Irina Derevko in Alias was a KGB agent on a deep cover mission, sent to seduce and marry Jack Bristow.
- Metal Gear Solid 3: Ocelot is a KGB double agent spying on GRU's Colonel Volgin. Except he's really a CIA agent spying on both of them.
- In addition, a lot of the political strife comes from Volgin's section of GRU seceding from the Soviet Union in an attempt to take power. The KGB (embodied in the few soldiers guarding Sokolov in the Virtuous Mission) don't want that, but because the GRU is vastly superior to them, they can't do anything about it.