The people who take Marcy away at the end of that episode say that they're FBI, but do you think they're some branch of the Initiative?  Like the ones who recruited Angel for the sub mission?

And I'm sure someone has noticed this before, but when she's in the 'invisible' classroom and opens up her book to 'Assassination and Infiltration,' the chapter text is the lyrics to the Beatles' song Happiness is a Warm Gun.  Any reason they chose this?

I totally think you're right.  But then that begs the question:  what did they really do with Ethan Rayne?  I know the comics answer this question, but I don't think the Initiative would be smart enough to leave him alone and just imprison him--they like to tinker with forces beyond their little pea brains.

they never say who actually took her, but I would be more inclined to suspect Wolfram & Hart - they have a history of using young people with supernatural gifts and forces to carry out their agenda -

What about the Initiative base just a couple miles away and still in Sunnydale? They dug out a huge area underneath an existing frat house, had concrete and electronic and technology-advanced holding cells and labs and monitoring rooms and air vents... how long would it take to build that? So how long do you think they were around before Buffy became a freshman? I would have thought the Mayor would have done something about them in his town he's been mayor of over a hundred years and he has all those deals with demons and clearly controls some officials and police.

they're some branch of the Initiative - I like that theory.  And, what about the spooky guys that interview Oz and Willow in What's My Line. 

What about the Initiative base just a couple miles away and still in Sunnydale? They dug out a huge area underneath  - LOL and no one noticed!

I would be more inclined to suspect Wolfram & Hart
I always got a "government ops" vibe from the people who took Marcy, but then again, I'd never heard of Wolfram & Hart when I saw that ep, so maybe they would've come to mind if I'd seen "Angel" first.

I would have thought the Mayor would have done something about them in his town he's been mayor of over a hundred years and he has all those deals with demons and clearly controls some officials and police.
That's a really good point. I never thought about it. I assumed the Initiative had to build all of the labs and tunnels and such, but I didn't even think about the Mayor wanting to put a stop to it.

And, what about the spooky guys that interview Oz and Willow in What's My Line.
I never got the impression there was anything supernatural about their program. They were interested in computer geniuses, and at that point, Oz isn't a werewolf, and Willow hasn't done any real magic, so if they DID have a supernatural agenda, or were associated with the Initiative, what would be the point of picking those two? Why not Buffy, or Amy, or some other student with magic or demonic associations?

Maybe the Mayor figured all the more fodder for him when he Ascended.  Reaching, I know.  On the other hand, maybe despite all his 'local' power, he couldn't do anything with the 'feds.'  Or maybe he thought since he was not quite human himself, better they not find out about him?

Yeah, I'm guessing he didn't want to chance messing with the military until after he ascended, if at all. I mean, it only took some TNT to take him out, and the government had MUCH bigger stuff than that.