Togusa returns to work, Aramaki will be taking him to visit the Prime Minister. They receive a call from the Home Affairs Minister to look a the TV Ch 33. The news report is about the heretofore secret Section 9 and how they have been abusing their authority and may be behind the kidnapping of Ernest Serano and the Laughing Man incident. The Minister says there is an emergency Cabinet session. Aramaki tells Motoko to find out who leaked the info about Section 9 to the media.
The Cabinet meets to discuss Section 9. The PM is called out of the meeting to receive the file from Aramaki charging Yakushima. The PM reads the file. To help with the upcoming Lower House elections the PM wants to pass a new Security Bill to temporarily disband Section 9 and leave Yakushima alone for now. Section 9 may be restarted later if they are still alive. Aramaki calls for a team meeting.
A navy assault ship streams at sea, the Marines are briefed on an attack and take off in helicopters toward the City.
Togusa notices two SUVs following him, he attempts to shake the tail. But they are stopped by armed men in black suits. Aramaki is taken away and Togusa is roughed up. Back at HQ, Motoko tells Batou to get six prostethic bodies and bring them to the Command Centre. Motoko gives Ishikawa and Pazoo tiny memory cards to give to the media, propaganda against Yakushima.
The Marine choppers drop armed exo-skeleton and regular troops on the Section 9 office building roof. Boma and Batou arrive with the bodies as Motoko tells them what is probably going on. They hear the assault troops coming. Motoko shoots the limp bodies.
In a hallway the two sides meet in a hail of bullets. Section 9 withdraws behind a armoured door. Batou says the soldiers are the "Umibozu" a secret group. Motoko sets a timer on an explosive device and the team takes off. The bomb explodes and the Umibozu find the prosthetic bodies in the wreckage, they suspect Section 9 may have committed suicide but also consider it may be staged.
At a hospital a Tachikoma is entertaining patients. It notices the TV news report showing the military assault on Section 9 HQ in accordance with the new Security law. The team are in the basement and Motoko tells the team to split up, Section 9 is now disbanded. Meanwhile the troops continue to examine the bodies found and the building and sewers.
Escaping in a tunnel together Batou says he noticed Motoko is not wearing the watch she received as a gift. Motoko says she left it at her safe house but has no sentimental attachment to it. Batou challenges her on why she always selects female bodies. At the end of the tunnel Motoko bids him farewell and runs away.
Togusa is interrogated about the Laughing Man. Pazoo and Boma split up in a dark alleyway, chased by cloaked troops. Pazoo is arrested in a bar, the bartender recovers the memory card from Pazoo's cigarette filter.
A Tachikoma cares for sleeping patients, and is moved when an old man mumbles the word "family" in his sleep The armed suits are withdrawn from the smouldering Section 9 offices. Batou enters a construction trailer office suspended under a bridge and recovers an automatic weapon from a closet. He walks into the City.