As far as I understand it, the current issue is that in the east theres a lot of drug and trafficking issues, which the opera house was sent in to deal with relatively covertly.
The countries go west - Federation, central - republic , east - kingdom. The federation garrison is making a lot of money off the drugs and trafficking. The main cast is currently trying to root out whos funding the drug operations to get rid of them but is targetting smaller operations to draw out the source. This would let them solve the problem without divulging more than that theyre just getting rid of the drugs in the streets, good publicity even if the Federation Colonol lady has to work a bit to cover up their tracks. However, the kingdom outs the Federation publicly due to getting the info through a leak. This is likely to turn the people of the republic against the Federation, or at least get them to protest the Federation out of their garrison in the East near the border with the kingdom.
To then deal with people protesting that the pharmaceuticals arent making medicine but actually opium and sever the connection between them, the federation commander of the 15th division, the moustache guy the major and colonol were talking to, decided to destroy all the evidence by sending a "rescue" team that actually blew them all up