I just thought I'd throw something in here. Why do you want him to necessarily resign in the first place? I think you should look at what you want from the character. I also think your initial concept of modern paladin is possibly not the best place to start. Most cops don't think too much about their faith in humanity. If anything, they're usually cynical, because they see the worst of what humanity is capable of.

The problem here seems to be that you're trying to force a character to suit an idea. Also, the core aspect is sketchy; constant struggle between the law and crime under a warlord like leader is contradictory to low key places or secluded areas. If the city is corrupt, it seems to indicate that violence is everywhere. Most criminals are after money or power, and you don't find much of either in low key, secluded areas. If a city is corrupt, it is run by the criminals (who corrupt it for a reason).

Preusmably the warlord like leader has a reason for being there. If he is already leader, then what could he gain by being corrupt? He'd be on a decent salary I would imagine, and since he's already running the biggest city in the world, he can't really get more power.

Perhaps it can come down to this warlord getting into power? As a result of a fixed election that made a mob boss mayor (i.e. the warlord like leader), could the cop and a number of his buddies go on strike, and then he loses buddies in what is labelled as a massacre when corrupt cops open fire on the striking good cops?

Since the main character is a beat cop, could he then be forced to go underground, hooking up with people he arrested and then learning that the system he served is a total failure? That way he could hook up with some dissidents and set about bringing the warlord mayor down.

Taerata -

The other way to look at this however is, sometimes it's interesting to see the kind of scenario that would create an interesting character that might hold that modern or old world idealism.

The thing that comes to mind is, "The road to hell is paved with good intentions". Corruption is as simple as I am good I do good. If the measure people uphold outwardly seems reasonable, or is simply acceptable - the social reality is that it moral - and therefore good.

People will overlook a lot to uphold what they believe in as well, and when an ideology seems unbreakable many things can be overlooked until the reality of it becomes so oppressive that it can no longer be overlooked.

The city could be succumbing to corrupt for many reasons. A more obvious turn point in the plot might be the warlord or ultimate ruler of the city is conducting research in secret military labs, yielding terrible results.

Or

There is a movement from someone in the middle ranks - into the upper ranks, and their ambitions are great. And through there ambition they slowly corrupt the city, the leaders of which who are largely kept in the dark by major cover ups. Discovering this, they are cast out of power - and might aid our hero.

This is the great thing about coming up with a great scenario - because instead of thinking why from the point of the character - we now create a character because of the situation he is in. And that really is how we think of Heroes in the broader sense, they rise to the need of the situation they are in because they see through the fog of chaos and do what has to be done.

I'm going to write a prose of the backstory and post on here for you guys soon so you can get a more indepth look at what I'm going for. Then I can get more detailed critiques, cause I feel like I'm leaving you guys in the dark.

Cool, I'd be interested to see more.

So this is the 10 O'Clock News game? ;)

Joke that.

One thing on paladin. Historically, paladins were simply Charlemagne's warriors...though originally they were seen as those who "displayed great Christian valor" over time they became your typical peacekeepers who kept the name as a reason to do certain things, much like many wave the banner of God to do wrong.
So when you say modern day paladin this could have lots of meanings just like modern day samurai :)

You could expound on this if you want this to be your key point, and create situations in the game where this "virtuous peacekeeper" makes actual tough choices (through the player of course). Does he let this teen involved in the cult sit ina jail cell after he saw the infernal power the child posseses? On the other hand what does it do to his "code of virtues" if he shoots the kid? Not to mention his career...?

Just a thought. I don't kow what the "it" is that he can't go through procedure to solve so this was just a thought.

Hope that helped and best of luck!