In the Early months of 2771, the Confederacy experienced turmoil when the member state-nation of the Confederacy, the RSC, had received an anonymous tip with information of an internal political plot by the Nationalist party. Supplies and military weapons were being sold and smuggled to the rogue nation made up of pirates, raiders, smugglers, and other rogue elements, for them to continue a war with the Confederacy. The plot was created so that the Confederacy would, in turn, update their decades old and outdated military, increase said military spending, and be able to properly fulfill the agreement to defend the outer system-states. On top of that, the Nationalists had hoped that paying the rogue nation would bribe them out of attacking border systems, which they agreed to, and begin attacking inner systems belonging to the middle and central ring, which the Rogue Nation also did. The Nationalists hoped that those confederate systems would finally contribute more to the military and to the defensive pact made by all member-states of the Confederacy. In the end, their plan did not come to fruition.

Having known for some time of the Nationalist party's militaristic and often shady dealings for some time, the government sent agents to round up those in the party and hold them accountable. In the next meeting of Congress, those who weren't arrested in the night were publicly ousted by the other representatives. This, however, did nothing but fuel more resentment in the end towards the Confederacy and expose publicly yet more of its corruption to the public. As it was, most nationalist member-states were comprised of systems that had already been long since harassed by pirates, or been ignored and outspoken when it came to their political voice. And many others not even part of the Nationalists had already been regretting their membership into an already failing government. 

The result was outer rim colonies leaving the Confederacy en masse. Whereas the middle ring and the central ring of colonies stayed, having been long unaffected by the war, or raids due to sitting more comfortably inside the Confederate military circle, those outside of those rings had been constantly attacked, having to fend off raids with their own feeble military, or be ransacked while waiting on an overstretched and short-staffed Confederate Federal military to arrive far too late. Leaving the Confederacy. Leaving the Confederacy which was made as a defensive pact was always allowed, however, many systems were those both loyal to the Nationalists, and some even still held onto their ex-nationalist senators who escaped justice for plunging the Confederacy into a war with a nation of Pirates. Diplomacy and urging the now independent systems to hand over the senators and politicians responsible had, largely failed, though some did peacefully. Threats of war were made on both sides. Some of these systems immediately went to the Terran Federation, offering to allow the Terrans to build military bases in their borders in return for protection. (An offer that would give the Federation a much closer vantage point to the Azen Empire's borders) An offer that the Terrans gladly accepted from numerous systems. However, those that Terra declined their offer, or those who didn't even make an offer began to panic. As the Confederate military was beginning to mobilize. The Systems hastily formed their own alliance on the world of Varnim. They called themselves the Varnim Pact. With their citizens returning home and their soldiers, who were at one time with the Confederate Federal military having returned, the Varnim Pact states had massed an experienced army. Their Naval power was made up of their personal system navies or those ships who had crews that sympathized against the corruption of the Confederacy. With both armies massed, the Confederacy issued one last demand for those responsible for treason to be handed over.

The Pact nations all in one voice declined.

And in May of 2771 the Confederacy went to war.

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In the later stages of the war, before the Lietian Accords in 2775, the Confederates, desperate for wins against the bitter defense of the Pact turned to the corporations, eagerly seeking power, and offering large sums of money to retrofit the entire Confederate military

In their desperation, the CSCN senate voted in favor of the trade. More voting power for a better military. Ironically everything the Pact states wanted in the first place. (not the more corporate control but a stronger centralized military). The corporate powers immediately went to work upgrading the battered and diminished confederate Federal army into a fighting force that could easily match the power of the Terran or Imperial army. It took years, but in 2775 it was finally fully prepared, trained and equipped. The plan was to hit every Pact controlled agricultural center and starve out the Pact. The plan was ready, and the Navy was just about to deploy to back up ongoing sieges and start new ones when the Confederate Senate, pressured by outside powers opted one last path of peace in the Republic of Lietus, a smaller but rising minor independent power in sector 5 of the free colonies.

There was hesitation during the accords, but eventually peace won over. 

It left many in the army that had already started in some systems to land and lay sieges or the groundwork of sieges wondering what they were even engaging in operations in if all the ground gained was for nothing. 

Regardless, peace was established between the alliances.