177. Who Blew Up the Nord Stream Pipeline? (Ep 1)

21:34Matthias Warnig is a banker turned energy executive. This is his kind of post-Cold War career. His pre-Cold War career was that of a senior operative with the Stasi and also with the Foreign Intelligence Service of the Eastern German Republic. He was a kind of a senior officer with both agencies. And as soon as the wall came down, he used the old connections, his kind of linguistic skills to set up a business relationship with Russia that emerged from the Soviet Union. and that's how he met Vladimir Putin. Vladimir Putin was a deputy mayor at the time in St. Petersburg and the two men met. This is the official story that there is a theory that they had met even before when they were both spooks.

22:28We don't know if that's true or not, but what is documented is that they met when Putin was a senior official in St. Petersburg and Putin's wife needed medical aid because of a car crash And Matthias Warnig kind of pulled some strings and had her flown over to Germany where she was treated very successfully. And that kind of sealed the bond between the two men. And they became the best of friends. And it must have been an awkward moment for Chancellor Angela Merkel at the opening of the Nord Stream 1, festive opening of the pipeline. Because Matthias Warnig showed up there as the chief executive.

23:05And it's interesting to, you know, she hails from Eastern Germany and she has often spoken about how the Stasi, how she hated the Stasi and how the Stasi was omnipresent and so on. And so to have this former officer of the Stasi directly kind of working with her administration must have been quite interesting. You know, Varnik also is a very capable individual. It must be said he's highly regarded in the energy sector as a very clever executive, as a very inventive kind of businessman. He was rubbing shoulders with the good and the great for decades. He maintains a winter residence on a Spanish island in the Mediterranean, and he there owns a yacht called Catherine the Great, which I find quite amusing to know.

23:53Boyan, I do want to ask just to kind of set up a few of the facts around the pipeline.

23:58Gordon:So Nord Stream 1 becomes functional in 2012, I believe. What is the ownership structure of the pipeline? Because I think it's just important when we talk about, as we will soon, the actual sabotage, who actually owns the thing? What's the construct for the ownership of the pipeline? Well, it's a little bit different for both pipelines. So the earlier, which was slightly less controversial pipeline, Nord Stream 1, is a joint venture between Gazprom, the energy giant, the state-controlled energy giant of Russia, and a string of big European companies, including Gasunier from the Netherlands, Angers from France, which is also state-controlled, and some German companies.

24:48So that's Nord Stream 1. Nord Stream 2 is a little bit different because that project was extremely controversial and it was conceived and built after Putin originally attacked Ukraine in 2014, after he annexed the Crimean Peninsula. So despite all these transgressions, Merkel sort of went ahead and built a whole new pipeline. The ownership structure was similar in the beginning, but then President Trump then in his first term imposed very serious sanctions on the pipeline during the final stage of its construction. And the Western companies were forced to kind of pull back from the management and reduce their exposure.

25:32So it then became fully controlled by Gazprom.

25:36David:So what's so significant about Nord Stream 2 is, as you said, it's being built even after 2014, when Putin has made his first invasion of Ukraine, annexed Crimea. The Germans are still going ahead with it. As we've heard, allies, including the US, are against it and fear that it's going to create a dependency. And then we get to this point, the construction of Nord Stream 2, the actual construction, is completed by September 2021, just before Angela Merkel is going to leave office, actually. But before it actually starts pumping any gas, something's going to happen which is going to change everything.

26:17David:And that is Russia is going to invade Ukraine in February 2022. And that is going to lead to the dramatic events that we'll come to in terms of the sabotage. So let's maybe take a break there. And then when we come back, we'll start looking at who actually carried out this act of unprecedented sabotage and why. Hey parents, how do you make smarter choices for your kids' college today? That's where Sally can help. With Sally, you can find scholarships, funding options, tools, and guidance all in one place. And if you need a loan, Sally has options for different families and different situations.

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28:05Gordon:Well, welcome back. Left off with the completed Nord Stream 2 pipeline, ready to carry Russian gas. And it is September of 2022. That pipeline, as we talked about earlier, is about to explode. And boy, here I think, I mean, we come to the part of this story that, I mean, really does truthfully read very much like a spy thriller. And you bring us into the world of this very interesting Ukrainian team that is going to wind up leading the sabotage effort. I'm wondering if you could, in particular, give us a sketch of, I think, two of the key people behind this. And you call them the colonel and the general in the book.

29:01Gordon:Don't use their real names. We should say none of the operatives are given their real names in the book. But who are the colonel and the general? And what role do they play in the sabotage operation? So the colonel was the absolute mastermind of the operation. He's a veteran of the special services of Ukraine. He was born during the time of the Soviet Union. He was trained by Soviet-slash-Russian experts in espionage, counter-espionage, sabotage, special operations, etc. And then as years went by, he essentially turned against Russia after 2014 and became one of the fiercest defenders of Ukrainian independence in the war against Russia.

29:47That's the colonel. The general is a friend of his and an ally. The general similarly was born in the Soviet Union. He was trained in the Soviet spirit of intelligence gathering, counterintelligence, special operations, etc. And then he equally was in very senior roles across the several intelligence services. in Ukraine. So in an interesting twist, these people are now probably the world's most dangerous opponents of Russia. And they were in a way created by Vladimir Putin. You know, they were once perhaps even pro-Russian, when not pro-Russian, they were certainly ambivalent, they are fluent Russian speakers, they had no beef with Russia, they had lived with Russia, they had lived in the Russian information space, and they were trained by Russian or Soviet experts.

30:39and then it was the Russian aggression that turned them into what they are now, the most dangerous enemies. Yeah.

30:47David:I always find that fascinating because I've met quite a few Ukrainian spies and they understand the Russians, I think, in the way a lot of Western spies and Western journalists and others might not because they fought alongside them, they trained with them, they understood them. But also that makes it feel particularly brutal because the antagonism is quite deep on both sides, especially as we see what happens. What I find fascinating is the culture of what we're going to see, of how this operation to target Nord Stream develops. Because it's not necessarily top down, is it? But you have groups of people and groups of Ukrainian officers and spies who have, I mean, you put it as almost like a startup mentality.

31:35David:And you call them the startup because they're coming up with ideas, particularly as we get closer to the invasion in 2022, about what they could do to take the fight to the Russians. It's a different model, isn't it, of intelligence operations to some extent? Oh, absolutely. would be entirely alien to a British or American civil servant or intelligence official or army officer. It's very fragmented, it's very atomized, it's very self-driven, self-motivated. To this very day, I mean, in the early days of the full-scale invasion, there was a kind of a period of chaos where it was basically every man for himself or every unit for themselves for a short while for at least a month or two.

32:19But even now, you know, you got these now famous drone units and the best drone units in Ukraine and consequently, I think the best in the world, perhaps, were all set up by private entrepreneurs who brought in private funding. So it wasn't even part, I mean, officially they are part of the armed forces, but a lot of the tech was developed by kind of kids who got a bunch of money from oligarchs or business people or crowdfunding, and then came up with these technologies that are now like at the forefront of innovation in warfare. And, you know, overarchingly, the army is sort of commanding them.

32:59But, you know, when you look at the day to day activity, quite often they decide what to do. So that, you know, beyond the financial, I mean, that is partly because Ukraine is very poor and relies on external funding for running the war, partly because of the corruption, which is quite endemic and rampant, and partly because of the political fragmentation. There are a lot of tiny little fragments of a deep state-like structure, and they are loyal to different politicians or different oligarchs, etc. The state doesn't really work like the United States or Great Britain, let me put it that way. But I have to say, while researching for my book and while reporting from Ukraine since 2014, I've noticed that that has served to their advantage.

33:50It makes them incredibly nimble. It makes them incredibly innovative. It makes them incredibly resilient. Like there is a, you know, you have an elite military unit. They don't expect the armed forces to take care of them. They're very angry when they don't get their weapons or ammunition or even like, you know, flak jackets or whatever. But then they kind of find a way to get them anyway. You know, they crowdfund or they tap an oligarch or, you know, they organize a campaign or they kind of reach out the funds from somewhere. So that's how it works. Incredible resilience and adaptivity, you know.

34:27Gordon:And, Boyan, you call this particular, I guess, I don't know if we could call it a clan, but this particular clan that is going to plot the destruction of Nord Stream, the startup. Is that your code name for them or do they actually call themselves the startup? That is what I came up with because when they started explaining who they are, how many, there's around 20 men involved. There are mainly officers above the rank of colonel. Some of them are slightly more junior, but it's mainly colonels. There are a couple of There are kind of people who own various other businesses, lawyers, et cetera.

35:13So it's not just army or intelligence people. It's a whole ecosystem. So it's over two dozens of people and they call themselves, or they describe themselves as a little deep state because they have been watching the news from the United States and all these kinds of culture wars around the deep state. Wow. And they said, well, we are kind of a little deep state, you know? And then after I got acquainted with a lot of them and with the way they operate, they were initially loyal to the previous president. They were attached to some people from the business community who were providing funding.

35:49And they shifted from the special services to the armed forces. After this full scale invasion, they became embedded in an elite unit of the armed forces of Ukraine. And some of them are still there now. So they said, you know, we're this little deep state. and I told them, look, what you're telling me, that sounds more like a startup.

36:06Gordon:You're like, maybe you don't want to brand yourself that way. It's not going to resonate. It's not going to resonate as well. Yeah, exactly. Exactly. And it's also much more orderly to deep stay than what you're doing. Like I say, this is very much a different spirit, a different mentality. And they are not unusual. There are groups like that. There are groups like that across the spectrum in politics, in the economy. You know, it cuts across all walks of life. You know, they have a couple of senior lawyers who take care of their legal challenges. They have a couple of senior minigargs or even oligargs who finance their endeavors when it's necessary or at least partly finance their endeavors.

36:48So it's a kind of a nexus between the private sector and the military sort of industrial security complex.

36:57David:I mean, it is fascinating because it is basically a deep step. Yeah, I mean, David, I can't imagine, could you imagine in the UK, if you suddenly had a kind of bunch of colonels and generals who are going like, let's just start up our own little club and, you know, backed maybe by some businessmen. And we're going to do our own sabotage operations, you know, I mean, without any real or well, we'll come to it, the issue of political oversight. I mean, it's kind of wild and very, very different.

37:23Gordon:And that's why it's so hard, I think, for a lot of Western observers. I mean, including myself, I'm coming out of a very, you know, structured, bureaucratized organization. And I'm thinking about how covert action, for example, is authorized and planned and, you know, sort of thought through. And it's just, you know, this is not how it's done. There's not a few random people who were connected to different parts of the agency bureaucracy who decide because they get funding from a tech billionaire to go out and blow something up. Don't give anyone any ideas, David. Despite the, I guess, conspiracy theories around the agency, that just doesn't happen.

38:07Gordon:But obviously, it does in the Ukrainian service. I mean, Boyan, how do they come to focus on Nord Stream? I mean, we've obviously set it up in the first half of this episode as a relatively juicy target for the Ukrainians because it's a Russian cash cow. But how do they think about the target set and get focused on Nord Stream? Well, this is the chronology. So at the onset of the full scale invasion, 24th of February 2022, they immediately form their own unit in the defense of Kiev. The early days of the defense of Kyiv were quite chaotic because President Vladimir Zelenskyy was reluctant to believe the warnings that were coming out of Washington and London about the imminent invasion.

39:00And, you know, I think days or weeks, a couple of weeks before the full-scale invasion started, he received a visit by William Burns, the then head of the CIA, in a last-ditch attempt to convince him to start preparing for this invasion. You know, he didn't believe what Burns had told him. Although Burns kind of laid out the details of what is going to happen and how it is going to happen, and I think it really actually happened that way. And on the other side, the military leadership was receiving the same warnings, partially from the CIA, but also from the armed forces of Britain and the United States.

39:38General Milley was then counterpart of General Valery Zaluzhny, who was the head of the armed forces of Ukraine. And he was telling him, look, you need to dig trenches around Kiev. You need to do this and do that. you need to secure that small airport where the Russians are planning to send paratroopers and set up a command base, etc. And that wasn't done. And largely, I think Zeluzny did believe the warnings, but Zelensky kind of refused. And so when the invasion started, Kiev was basically defended in a very chaotic manner. And these people just went to the armory of the military intelligence service with their private cars.

40:18They put on their uniforms, their official uniforms. They took out weapons, official weapons, on the back of them being officers. And then they just self-organized, which is very interesting. Of course, they were operating under the auspices of their service, but commands were not coming from above. They were just self-motivated. And this includes the colonel and the general, yeah? Yes, absolutely. The four-star general was kind of firing rounds into Russian tanks, which is also unheard of. I've never heard of that happening in any kind of Western system. And it's hard to imagine that, you know, an American general will go to Afghanistan and kind of shoot at insurgents or whatever.

40:55So, but that happened. And after the war, after the battle of Kiev was won, partly due to their efforts, they regrouped in a private office because they stopped using their official headquarters for fears that the Russians had the blueprints of all the facilities and they thought they might kind of drone them or send missiles or whatever. So they felt it was safer to meet in covert headquarters. And they set up a list of high-value targets in what they called hybrid warfare against Russia. And the priority was to hit, as they told them, to hit the Russians where it hurts, to hit their revenues from the hydrocarbons.

41:41And this is something they were specialized in, you know, asymmetric warfare, hybrid warfare, economic warfare, assassinations behind enemy lines. So they drafted the list of almost a dozen targets, very high value targets. One of them was the Kerch Bridge that connects mainland Russia with occupied Crimea, which at the time was extremely strategic. And two other targets were North Stream, the pipeline, and we discussed, and Turk Stream, which is the kind of Nord Stream equivalent in the south. It connects Turkey with Russia and then pumps gas up through the Balkans into the European Union. So they devised this plan to strike both pipelines, Nord Stream and Turk Stream, simultaneously.

42:28And they decided to, well, maybe, I don't know how you want to handle the role of Western agencies and advice they received or not received. Yeah, I think we'll come to that.

42:39David:Maybe one question just at this point is, they're coming up with this plan, pretty ambitious plans, striking these pipelines, including Nord Stream. Who's signing off on it? And maybe this is a difficult question to know all the answers to. But how far is it just the startup and how far is this someone else who's involved? So, like I said, the startup is at all time embedded in official service. Initially, first they started off as members of the SBU, which is the largest intelligence service of Ukraine. It's perhaps comparable to the CIA, but not quite because it's an enormous machine. It has now, I think around 55 ,000 employees.

43:22They are a kind of intelligence service, counterintelligence service. They have their own kind of anti-corruption unit. They have their own prisons. They have their own sort of prosecution in a way. They tap the phones and telecommunications of pretty much everyone in Ukraine at all times. And then they segued into the military intelligence service, which is much smaller, but also quite ferocious. It's called the H-U-R, Hur. It's again equivalent of the Russian and previously Soviet military intelligence agency called GUR in Russia. and then they became embedded in the armed forces. So when they were planning the attacks behind enemy lines on critical infrastructure that served Russian interests, they were doing that as part of this elite military unit, which was commanded by a very senior general who then answered directly to Valery Zaluzhny, the chief commander at the time of the armed forces of Ukraine.

44:24And currently ambassador to London, we should say. Exactly. Ambassador at the court of St. James. He was effectively fired by Zelensky because there was great tension between the two men. Rivalry.

44:37David:Yeah. A lot of people think Zaluzhny could end up president. Exactly. Zaluzhny said to have presidential ambitions. He was an extremely popular figure in Ukraine during the time he was in command. Ukraine was winning, pretty much. And then when he got shafted, their luck turned. So he remains quite popular, I think. He's not been necessarily tainted by some of the more challenging things that had happened to the armed forces in the last almost five years now. And Zaluzhny also, interestingly, was very, I think, upset with Zelensky, who refused to allow him to prepare for the invasion. This is something that is felt, this is a very strong emotional subject within the secret services or parts of the secret services and part of the armed forces where people who are not that keen on Zelensky and his clique are very upset that he did not prepare for the full-scale invasion.

45:37Right? So Zeluzhny, I think belongs to that camp and he was literally not allowed. In secret, he performed some preparations, but he wasn't allowed to dig trenches and throw divisions around and do all that sort of stuff. And that's the kind of origin of that animosity. But anyways, Illusioni green-lighted the operation at the time, and he even asked them whether they had told the president's advisors about it, and they informed them that they hadn't. So he was quite happy because he did not believe that the presidential administration is reliable. He felt that if you tell them about something like this, they might leak it and the Russians might even find out about it.

46:21Such was the animosity between the two camps that they didn't trust each other, even with basic stuff like that.

46:27Gordon:Well, Bojan, I think maybe there with the operation Greenlit and the startup beginning its plans to target Nord Stream, let's end this episode. We come back next time. We're going to dig deeper into how our good friends at the CIA become involved in this dramatic plan to conduct the greatest act of sabotage on civilian infrastructure in history and how dogged German investigators get at the truth behind who planted the bombs, which is a team of professional, not just professional spies, I guess, but also civilians. And it includes a glamour model among the diving team. But of course, Gordon, there's no need to wait for that episode.

47:12Gordon:You can get it right now, early access by joining the declassified club. Go to the restisclassified.com and sign up. We'll see you next time. See you next time.

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