To build “Nord Stream”, the Russians took control of one of Germanyʼs major parties, an entire province, and the “useful idiot” Gerhard Schröder. Key points from the book by German investigators

How the first Nord Stream was built

Russia and its “hybrid extension of the state” — “Gazprom” — began talking about building a gas pipeline bypassing Ukraine shortly after the victory of the Orange Revolution in 2005. The reason for this, Putin claimed at the time, was the discovery of the Shtokman field in the Arctic with gas reserves of 3.7 trillion cubic meters. Putin believed that its development and transportation of gas via “Nord Stream” would “create an absolutely stable situation in the European economy and energy policy, especially in Germany”. At that time, the Russian president had an extremely important ally in Germany, Chancellor Gerhard Schröder.

Schröder turned out to be Putin’s “biggest useful idiot” in the whole story, the book’s authors write. He happily invited the Russian dictator to speak in the German parliament, initiated the “Year of Russia in Germany”, steamed with Putin in the sauna, and called him a “flawless democrat”. Schröder embraced the “Nord Stream” project with open arms, and shortly after resigning in November 2005, he became chairman of the supervisory board of the project’s operator
“Nord Stream AG” with an annual salary of €250 000.

Gerhard Schröder is having fun in Putinʼs company.

Getty Images / «Babel'»

Getty Images / «Babel'»

Getty Images / «Babel'»

“Nord Stream” was supposed to pass through the territorial waters of Finland, Sweden, and Denmark — and the leadership of the latter two was not enthusiastic about the construction of the gas pipeline. The Russians managed to overcome the opposition with the help of bribery. An influential Swedish politician, former Prime Minister Hans Göran Persson, said that he did not see any environmental benefits in this project and that it should not be implemented. Schröder invited an old acquaintance to lunch — and soon Persson got a job at the PR agency JKL. Its main client was the German gas company “E.ON Ruhrgas”, a shareholder of “Nord Stream”. Persson received about €200 000 a year on his new job and no longer criticized the pipeline. A similar story happened with Denmark: a country that had never bought gas from Russia received a lucrative 20-year contract, and the Danish Deputy Finance Minister responsible for the negotiations Kurt Pedersen soon moved to a highly paid position at “Gazprom”.

The Russians set so-called honey traps for other politicians. The deputy head of the European Commissionʼs Directorate-General for Energy Klaus-Dieter Borchardt told reporters what they were. When he attended a meeting of the Russian State Dumaʼs energy committee in 2012, he was taken to an expensive restaurant in the evening, served vodka after dessert, and then "two very beautiful ladies" approached him. When Borchardt asked why they were there, the Russian side replied that they were at his disposal until the end of the evening, and after that also. The European official refused the offer — he believes that in this way he protected himself from compromising material.

In Germany itself, the Russians have been actively working to improve their image: for example, the popular public TV channel ARD aired the film “Giant Gazprom” (its author Hubert Seipel later received €600 000 from the company of Russian oligarch Alexei Mordashov), and the annual “Nord Stream Race” sailing regatta began to take place on the Baltic Sea. Its regular participant is Tim Kreger, the German world sailing champion. On the yacht Spirit of Europe, he competed for a prize of €100 000 — although he was already in the running, because the star’s team was sponsored by the gas pipeline management company “Nord Stream AG”.

In 2012, the first stage of “Nord Stream”, now known as “Nord Stream 1”, was operating at full capacity. However, the Shtokman field was never developed.

Lobbying for “Nord Stream 2”

If Schröder is Putinʼs most high-profile German friend, then his most loyal friend is Matthias Warnig. They have known each other since at least the early 1990s. A native of the GDR, Warnig carried out his first assignments for the local secret intelligence agency “Stasi”, while still a schoolboy, receiving 150 East German marks for each. As soon as Warnig turned 18, he signed an official cooperation agreement with “Stasi” and soon began specializing in economic issues. In particular, he collected confidential information about Germanyʼs nuclear power plants. In 1989, Warnig received the gold medal "For Devotion to the Cause". Putin, who also actively collaborated with the GDRʼs secret service, also has such a medal — but in bronze.

When the GDR was liquidated and “Stasi” disbanded, Matthias Warnig first worked at a credit union he had previously spied on, and then went to St. Petersburg to open a branch of a German bank. Putin was then working in the St. Petersburg city hall, and became so close to Warnig that when his then-wife Lyudmila was in a car accident in 1993, Warnig took her to Germany for treatment. He also took Putin’s children out of Russia when he began to hold high-ranking positions. And when Putin’s father died in 1999, Warnig was one of the few invited to the funeral. Since the founding of “Nord Stream AG”, he has been the head of the company.

In 2013, Germany had no shortage of ways to get gas, and when Russia announced that “Nord Stream” should be expanded, many were surprised. Environmentalists were concerned about the impact on the Baltic Sea ecosystems, some politicians about Germany’s increased dependence on Russia, and the military about the fact that the new pipes could interfere with exercises. But Moscow understood an important nuance — Germany is a federation, and local governments have a lot of power. The key German state for “Nord Stream”, Mecklenburg-Vorpommern (hereinafter simply Vorpommern), is one of the country’s poorest provinces. It is located in its northeast and was formerly part of the GDR. “Nord Stream AG” and Matthias Warnig have focused their efforts on winning the sympathy of local officials or simply bribing them.

Russians spent up to €100 million a year on soft power in Germany. This includes sponsorship of football teams and construction of new facilities in amusement parks. Western Pomerania received perhaps the most: a sailing regatta, a music festival, the annual Russia Day, and full funding for the Baltic Philharmonic Orchestra. At the end of 2013, when hundreds of thousands of protesters in Kyiv protested against Viktor Yanukovych’s pro-Russian course, this orchestra caused a sensation on tour in Berlin with its performance of Alexander Scriabin’s “Poem of Ecstasy”. The audience applauded standing, stamped their feet, and called for an encore several times.

When the Russians annexed Crimea and invaded the Donbas, Germany’s relations with Russia slowed down, but not in Western Pomerania. They did not abandon Russia Day there even in 2014. The following year, the provincial leader Erwin Sellering exclaimed emotionally at the holiday: “When will the sanctions be lifted from Russia?” He was soon awarded the “Order of Friendship”, Russia’s highest award for foreigners.

Meanwhile, at the all-German level, Putin has another ally — Frank-Walter Steinmeier. A longtime acquaintance and de facto protégé of Gerhard Schröder in the joint Social Democratic Party, in 2013 he headed the German Foreign Ministry. The ministry developed non-public recommendations on how officials should better talk about “Nord Stream 2”. The main thesis is that this is a private initiative, so the federal government does not decide anything in particular here. Chancellor Angela Merkel also adhered to the principle of “democratization through trade” — as she would later say, she hoped that business projects with democratic countries would help Russia not slide into dictatorship. The authors of the book answer that knowing Putin personally, Merkel could not help but understand that “Nord Stream” was definitely not a business project for him.

The End of Soft Power

In 2017, the Russians were able to convince the EU institutions that the construction of “Nord Stream 2” did not require the consent of all member states of the union, as required by the norm approved in 2009, saying that it was simply a continuation of the 2005 project. If the consent of the entire EU had been required, the idea would have failed due to the anti-Russian position of Poland or Estonia. And so the only obstacle left for the start of construction was the technical inspection of the project.

The Russians decided to speed up. In Germany, and in particular in Western Pomerania, the term “Nordstreamler” is becoming widespread — a brazen lobbyist for the construction of a gas pipeline with good connections, minimal patience and a willingness to cause considerable problems. The new president-minister of the state Manuela Schwesig was actually on their side. Intending to make the “Nord Stream” case a success and thereby compete for the position of head of all of Germany, she gave the project the “green light”. It was close to her in terms of values — at the next Russia Day, Schwesig called the Russian invasion a "conflict in Ukraine" and assured that "more relaxed relations with Russia" were needed. She ended her speech in Russian: "За ваше здоровье!"

On December 1, 2017, the head of an expert bureau in Berlin Thomas G. is speaking anxiously on the phone. His interlocutor is the head of the mining department of the city of Stralsund, near which “Nord Stream 2” is due to come to the surface.

The agency must provide an opinion on whether the future construction in coastal waters complies with environmental and geological standards. This is a huge amount of work, which was distributed to contractors due to time constraints. Thomasʼs company had to assess several thousand pages of the project for compliance with environmental requirements. The interlocutor pressures Thomas to have the report ready within a month. This is too fast, the contractor does not agree and suggests the end of January — for which the company will still have to work on weekends and during the winter holidays. Thomas is surprised that the customer is calling him: this is usually unacceptable for Germany, as it raises suspicions of pressure. But this is pressure, and soon a lawyer from “Nord Stream AG” itself calls Thomasʼs specialists. He simply asks to approve the project, because it is "so similar to the first stream". Otherwise, Thomasʼs office may face negative consequences. And it ran into them: after the assessment was completed, the Stralsund mining department retroactively changed the contract with Thomasʼs company and refused to pay him. The bureau began preparing a lawsuit, but the case never reached court — the department decided that red tape would be more expensive and still paid the funds that “Nord Stream AG” had actually allocated.

And on January 29, 2018, at 10:21, the Stralsund mining department received an email from lawyer Andreas Geiger, a consultant on the project. He confidentially warned: the text of the construction consent in its current version has too many errors that could become a “hot potato” in the future. The proximity of the future gas pipeline to the territories where German troops are conducting training has not been taken into account, and therefore may damage the pipes. There is confusion with the status and borders of nature protection zones. And the key thing is that they want to check the finished gas pipeline for tightness by letting air into it, not a special liquid mixture. It is cheaper, but much less reliable, and it is not a fact that there will not be problems with regulators later. Geiger does not want to take responsibility for the report.

The head of the department sent Geigerʼs entire list of claims to a lawyer for “Nord Stream AG” and informed the state energy minister that he would announce the granting of a permit for the construction of “Nord Stream 2” in two days. Everything happened so quickly that the first version of the permit even disclosed secret data about the Bundeswehrʼs naval training grounds in the region and the ammunition it uses.

Abuses in approving the project were already evident in May 2018 — at least 145 kilograms of lubricant spilled onto the shore when the bottom of a local river was deepened. If they had dissolved in water, there would have been a serious risk of skin and eye damage to people. In the environmental report, Thomas G. stated that only equipment that uses harmless biodegradable lubricant was needed. The mining department removed this excerpt from the final report. Later, state ecologists found out that the lubricant was much more harmful than reported. They asked the local Minister of Ecology by email whether it was worth reporting it, but he forbade it. The public also did not have to be informed when 300 liters of hydraulic oil fell into the sea in October 2018. A military ship was deployed to eliminate the harmful leak.

Remains of spilled oil on the coast.

In October 2018, Russia Day in Western Pomerania was held with particular pomp. With a reception in the bar of the luxurious “Neptune Hotel”, which was built for the elite of the GDR and “Stasi”. With the use of the stadium and cruise terminal in the port city of Rostock. With the signing of ten agreements, including one on the joint development of drones. Russian guests called the province “the Kremlin’s outpost in Europe”, and Manuela Schwesig gave them watches that showed both Berlin and Moscow time.

Around the same time, a Ukrainian delegation visited Berlin. Representatives of “Naftogaz” reminded Angela Merkel’s energy advisers — Gunter Wetzel and Christian Schmidt — that for Russia, oil and gas are weapons, and that the completion of “Nord Stream 2” significantly increases the chances of a full-scale Russian invasion of Ukraine. Wetzel and Schmidt responded in accordance with the manual issued by Steinmeier — the gas pipeline is a private matter for private companies.

“But do you understand that an escalation of the conflict will mean that many refugees from the war will arrive in Germany?” asked one of the “Naftogaz” representatives. The Germans replied that they would know what to do with them. The Ukrainians were shocked by this answer.

“But there will be millions of them, not tens or hundreds of thousands,” the authors of the book quote a “Naftogaz” representative, referring to their then colleague Kira Bondar.

"Well, we assumed lower numbers. Weʼll have to recalculate," they replied to the Ukrainians.

At another meeting, with representatives of the German Foreign Ministry and the Ministry of Economy, the “Naftogaz” delegates heard similar answers. Leaving Germany, Kira Bondar noted the main theses from the meetings there. The main one is that the German authorities “need this gas”. And if there is no hope for it, the Ukrainians will activate another plan.

Trump helps, Biden harms, and Scholz deceives

At the end of 2019, 150 of the 2,460 kilometers of the gas pipeline remained to be laid. After the Danish authorities approved the project in October, two ships from “Allseas” worked in its territorial waters almost every day. It was only on December 19 that the company received a letter from two American senators, Republicans Ted Cruz and Ron Johnson. They urged Allseas to complete the work — otherwise its assets would be frozen. Everything happened with reference to the European Energy Protection Act, which Trump would sign the next day. The act required all companies involved in the construction of “Nord Stream 2” to stop cooperating with “Nord Stream AG”. At that time, Germany already imported almost half of its gas from Russia — the US was against Berlin becoming even more dependent on Moscow. The Americans were also not against selling more of their gas to Europe. Allseas is a large Swiss company, and the losses from US sanctions are significant for it. Construction was stopped.

To a large extent, this was the work of the Ukrainians. Realizing that you can’t mess with the Germans, “Naftogaz” delegates began traveling to the United States almost every month to convince local politicians that “Nord Stream 2” would make the world worse. These arguments were heard, and the majority of the Senate and House of Representatives voted to impose sanctions. Trump had to submit to the decision of the congressmen. One of the biggest opponents of the act was the German embassy in Washington.

German contractors for “Nord Stream 2” received a similar message from American senators. In 2020, work was frozen — against the will of, for example, the then Vice Chancellor and Minister of Economics of Germany Olaf Scholz. The future head of the country said that the sources of gas supply were very diversified. He lied: in the same 2020, the share of Russian gas in German imports exceeded 65%.

On August 20, 2020, opposition figure Alexei Navalnyi was poisoned in Russia, and Europe was in shock. The majority of Germans who took part in a poll by popular German media outlets said they wanted Gerhard Schröder to step down as a member of the “Gazprom” board. Among his defenders was Olaf Scholz, a representative of the same Social Democratic Party that Schröder once led.

“He has made a great contribution to the development of our country, and it is not worth discussing what he does in his professional life,” Scholz said. Almost 20 years earlier, Schröder had helped Scholz to take an influential position in the party, and since then the politician has not criticized the former chancellor.

At the end of the year, Vorpommern found a way to complete the gas pipeline under new conditions. To do this, the state authorities decided to create a charitable foundation that was not subject to sanctions under American law. The new body was called the Nature Protection Foundation — except that in addition to environmental initiatives, it was also supposed to conduct commercial activities. In particular, to purchase goods and services to complete the construction of “Nord Stream 2”. When Manuela Schwesig informed Angela Merkel about this decision, she was surprised: they say, a nature protection foundation that actually helps build the gas pipeline is too strange and cynical. But Merkel could not prohibit the creation of this foundation: the state authorities had complete freedom here. Schwesig presented the fundʼs project to the state parliament so that it would approve its creation, but in fact the foundation made its first purchases a week before its formal establishment.

Manuela Schwesig gives an interview near the "Nord Stream" pipes emerging from the surface.

Getty Images / «Babel'»

Getty Images / «Babel'»

The fake foundation was headed by the the former head of Western Pomerania Erwin Sellering, who was still involved with the Society for Friendship with Russia. At first, the foundationʼs staff even worked in the societyʼs premises.

The main sponsor of the fund was — as expected — “Nord Stream AG”. The company gave €20 million for environmental projects and €174 million for economic operations. The fund turned into a small “Gazprom”, the authors of the book write that it was filled with “Nord Streamers”, who controlled the purchases of everything from crushed stone to even a small ship. The fundʼs partners were often newly created gasket companies. The fund decided not to receive the status of a charitable organization, which would force it to disclose details of its expenses. Representatives of German environmental organizations, after meeting with the fundʼs employees, published an article entitled "No Cooperation with Deceptive Packaging!"

Thanks to the fund, the construction of the gas pipeline was slowly but surely completed. Joe Biden accelerated this process. Shortly after taking office, in May 2021, he signed the so-called resolution on the interpretation of the US sanctions laws. The document ended with a statement that the lifting of sanctions against Matthias Warnig was in the national interests of the United States. In fact, the new White House leadership reported that it was not against “Nord Stream 2”. In this way, the authors of the book suggest, Biden wanted to improve Washingtonʼs relations with Berlin.

By the end of 2021, the gas pipeline was completed. The leadership of Western Pomerania and “Nordstreamers” celebrated this in the best restaurant in the state capital, the city of Schleswig, which opened its weekend specifically for this purpose. In parallel with the congratulations on the readiness of the gas pipeline, representatives of “Nord Stream 2” congratulated their fellow politicians on their successful results in the local elections. The Social Democratic Party of Schwesig, Scholz and Schröder achieved the best result in the region in 20 years and formed a coalition with the even more pro-Russian “Die Linke” party, former communists. Part of the reason for the success is the partyʼs record-breaking campaign contributions. Party members associated with “Nord Stream 2” made particularly generous donations.

Attempts to Cover Up the Tracks

Russia’s full-scale invasion of Ukraine begins. Manuela Schwesig posts on social media that she is “shocked by the terrible events in Ukraine”. On February 25, the Minister President of Western Pomerania invites Erwin Sellering to her home, where she says that both the Environmental Protection Fund and the Society for Friendship with Russia must be liquidated. In this way, she is trying to secure the future of her political career. Lawyer Brigitte Weitemeier helps Schwesig get rid of the fund, and in May 2022, the Minister President publishes her report with arguments for why the fund should be closed and how it will happen. In fact, this is an edited version of the report. For example, the phrase “ʼNord Stream 2ʼ has become a symbol of the unstable situation that Germany has found itself in as a result of its increasing dependence on Russian gas, although it has been clear since 2014 that Russia has territorial claims to Ukraine” was removed from the first version. Schwesig stated that such wording was politically unacceptable to her. The public should not get the impression that she was pursuing a pro-Russian policy when everything was already clear about Russia.

On the same day, the US reimposes sanctions on Matthias Warnig and “Nord Stream AG”. Banks, an internet service provider, and even cleaners terminate their agreements with the company’s headquarters. One of the executives urgently buys several hard drives to save internal files and about 25 000 emails. He later shares this information with the authors of the book.

At two o’clock in the afternoon, Warnig gathers the “Nordstreamers” in his office—about 120 people—and tells them that the company’s work is finished. In a month, it will file for bankruptcy. Much more interesting things are happening in the office of the de facto main Russian company in Germany “Gazprom Germania”. In addition to its influence on “Nord Stream”, it controlled Germany’s largest underground gas storage facility and built an extensive network of fuel processing and sales. In the first days of the full-scale invasion, the company’s 1 500 employees’ phones went unanswered. And on March 30, five Russians met with the “Gazprom Germania” managers. They reported that the company no longer belongs to “Gazprom” and is being liquidated, and hundreds of customers must be disconnected from gas as soon as possible. The goal is to cause as much economic damage to Germany as possible, ideally so that people take to the streets. With the same goal in mind, “Gazprom” keeps its German gas storage facility practically empty. Smaller gas reserves in the country mean greater nervousness in society.

Two managers of “Gazprom Germania” decide to inform the German government about the Russiansʼ plans. They secretly meet with representatives of the Ministry of Economics. This happens on April 1, 2022 — and at first the government officials do not even believe what they hear, taking the Russiansʼ plans for an April Foolʼs joke. But gradually they realize the full danger of the situation. For example, the German branch of “Gazprom” owns an oil refinery that supplies 90% of the gasoline, diesel and fuel oil consumed by the capital region.

To deal with the situation, a special working group is created at the Ministry of Economy. Soon, two employees of the ministry are arrested: they turned out to be Russian spies. One of them was even present at the meeting with “Gazprom Germania” informants.

Overall, Germanyʼs shift in dependence on Russia through gas projects can be measured by the percentage of Russian gas in German gas imports. While in 2014 it was just over 41%, in 2021 it was over 65%. For all the gas sold to Germany during these years, Russia received €104 billion — the equivalent of a third of the Kremlinʼs spending on its military at the time.