Vladimir Putin was a KGB officer in East Germany and then he entered politics after the collapse of the USSR working in the office of the Mayor of St. Petersburg. He later worked as a deputy chief of staff for President Boris Yeltsin in the Kremlin. Yeltsin appointed him the head of the FSB (successor to the KGB) and then acting Prime Minister. Yeltsin basically picked him as his successor, and when he suddenly resigned in 1999 Putin became acting President according to the constitution, and later won his own full term in the presidential election of 2000.
I ask for a bit of forgiveness because Putin's Leningrad/Petersburg era goes until 1996 which according to the margin guidelines is currently two years outside the twenty-year rule.
Putin left the KGB and joined the mayor of St Petersburg, Anatoly Sobchak (who was his old professor from law school) in May 1990 as a deputy mayor to head the Committee for Foreign Economic Relations (CFER). This handled all the deals for foreign organisations wanting to do business in St Petersburg. Amongst his creations at the time was the BNP-Dresdner Bank Joint Venture which was headed up by his old buddy Matthias Warnig, his counterpart in the Dresden office of the Stasi. Much of the business with the west was done in the form of barter, stuff would be exported like minerals and then things would come back such as food and medical supplies for the good of the people. Such deals were illegal unless done through the state, and in St Petersburg, that meant Putin's committee. Apparently he was very accommodating and allegedly signed many documents without full authorisation and did not check to see whether anything came back in return. In those days, the export business had a very dirty reputation and was linked directly to the Tambov organised crime syndicate aka Tambovskaya mob.
Whilst on the CFER, Putin was appointed in 1992 to the supervisory board of a German based organisation, SPAG for the disposal of state assets overseas but in reality had links to laundering "tens of millions of euros" for "one of the biggest and most powerful" Russian organized crime groups, German prosecutors said in a statement.
Prosecutors believe the crime group is based in St. Petersburg and involved in "numerous crimes, including vehicle smuggling, human trafficking, alcohol smuggling, extortion and confidence trickstering," the statement said.
Finally in 1996 another of Sobchak's deputies, Yakovlev stood against Sobchak, on the basis that Sobchak was "distracted by his international profile from solving the problems of the city". Apparently this shocked Putin and he resigned to go to Moscow to serve on the State Property Committee.
I would reccomend "Putin's Russia" by Anna Politkovskaya as a good background book. The author upset Putin and the Russian Military in Chechnya. She was eventually murdered. However, this is mostly newer material relating to her interest in the Chechnyan conflict. For older material here are some interesting bits:
/u/beatles-in-space has already given a good précis of Putin's career trajectory. The fact that he was a career Soviet intelligence officer is one of the things that makes him really interesting and really difficult to understand as a statesman. But it's also widely overstated; he's made it part of his own personal mythology, and the sexy narrative of Putin the Spymaster is a convenient addition to the common Western understanding of Putin the ultranationalist strongman.
It appears to have been a largely unremarkable career. He doesn't warrant a mention in any of my usual sources on Soviet intelligence history. He spent several years as a KGB bureaucrat in Leningrad, then in the Second Chief Directorate (counterintelligence).
Eventually, he achieved his great ambition and joined the prestigious First Chief Directorate, which was responsible for foreign intelligence gathering. He was assigned to Directorate S (the 'illegals' department, responsible for the covert collection of intelligence without diplomatic cover.) From 1985-1990, he was posted to Dresden, then in East Germany — not exactly a front-line posting in the intelligence war. And by most accounts, his KGB career was far from what he had hoped it would be.
This is from journalist and Putin critic Masha Gessen's Putin biography The Man Without a Face:
Handing out assignments to [Red Army Faction] radicals, who were responsible for more than two dozen assassinations and terrorist attacks between 1970 and 1998, is exactly the sort of work Putin had once dreamed of, but there is no evidence he was directly connected to it. Instead, he spent most of his days sitting at his desk, in a room he shared with one other agent (every other officer in the Dresden building had his own office). His day began with a morning staff meeting, continued with a meeting with his local agent, the retired police officer, and finished with writing: every agent had to give a complete accounting of his activities, including Russian translations of any information he had obtained. Former agents estimate they spent three-quarters of their time writing reports. Putin's biggest success in his stay in Dresden appears to have been in drafting a Colombian university student, who in turn connected the Soviet agents with a Colombian student at a school in West Berlin, who in turn introduced them to a Colombian-born U.S. Army sergeant, who sold them an unclassified Army manual for 800 marks. Putin and his colleagues had high hopes for the sergeant, but by the time they obtained teh manual, Putin's time in Germany was coming to an end.
(Note that she uses the term 'agent' to mean 'intelligence officer', which is not technically accurate, but that's a personal nitpick.)
After being recalled to the USSR in 1990, he did a very brief stint as a talent-spotter at Leningrad State University. It was around that time that his political career began. He eventually retired as a lieutenant-colonel in 1991, shortly before the KGB was dissolved, and became a full-time political operative. His later (and very short) term as director of the FSB was as the result of political maneuvering rather than a glittering intelligence career.
There is a very interesting account by Sharon Tennison, journalist and founder of CCI, which is a organization that has been promoting business and social initiatives (Alcoholics Anonymous, entrepreneurship training, ...) on the territory of the former Soviet Union since the early 1980s.
When trying to establish a new program in St. Petersburg in 1992, she "found [herself] in a small, dull brown office [in St. Petersburg's city hall], facing a rather trim nondescript man in a brown suit." Guess, who that man was? Right! Vladimir Putin! Her experience with him was yet somehow different from other Soviet paper-shufflers. He was rather neutral, stayed true to his script, asked thoughtful questions about the proposed initiative for one hour, and, respectfully, denied. She was shocked. That bureaucrat didn't "fall into chummy conversations with foreigners with hopes of obtaining bribes in exchange for the Americans' requests", as it was customary. This unusual behaviour even went so far that, in 1993, he denied paid medical help in Finland for his wife who just had a near-fatal car accident (a little bit more on the accident and its effects can be found here).
Even around 2000, he was still rather unremarkable, observant, calculating and more in different shades of grey than in black and white. Both media and politicians did not know what to make of him (in 2001, Putin even held a speech in front of the German Bundestag (Transltion), unthinkable today). However, when it became evident that his policies were about to affect big capital and strengthen the primacy of politics and society (contrary to the rampant primacy of economics and brutal capitalism of the 1990s), that image tainted and Putin slowly, but surely, became today's Putler.
The question is now, has he really changed that much? Has he changed at all? Has he always been a fanatic, lunatic, war and power monger and it just didn't show in that old, brown suit? Or is it all media bias and bullshit? I cannot verify or falsify Tennison's recounting, yet, it seems very plausible that this tale of the uber-correct post-Soviet municipal employee could really have been true.