WSJ What’s News - The Outlandish Scheme Behind the Nord Stream Pipeline Sabotage

Episode Date: August 15, 2024

A.M. Edition for Aug. 15. WSJ correspondent Bojan Pancevski explains how a group of Ukrainians pulled off one of the most audacious acts of sabotage in modern history with their 2022 attack on natural-gas pipelines carrying Russian gas to Europe. Plus, Gaza ceasefire talks resume without Hamas at the table. And Columbia University President Minouche Shafik becomes the fifth Ivy League leader to resign over the past year. Luke Vargas hosts. Sign up for the WSJ’s free What’s News newsletter.  Learn more about your ad choices. Visit megaphone.fm/adchoices

Gaza ceasefire talks resume, but without Hamas at the table. Plus the president of Columbia University resigns, becoming the fifth Ivy League leader to do so over the past year. And we've got the incredible true story of who attacked Russia's Nord Stream pipeline. The idea was dreamt up during a drunken night sometime early May in Kiev. Some of them were military officers. Businessmen helped fund the project, which was executed under the command of the Ukrainian military.

It's Thursday, August 15th. I'm Luke Vargas for the Wall Street Journal and here is the AM edition of What's News, the top headlines and business stories moving your world today. Ceasefire talks on ending the fighting in Gaza are set to resume today in Doha, Qatar. We're going to be seeing top Israeli officials, including Israel's spy chief and its internal security chief, as well as CIA chief William Burns. That's journal reporter Anat Pelled, who told us Hamas is so far refusing to participate in the U.S.-led diplomatic push.

Earlier this week, the group's new political leader told Arab mediators that if Israel is serious about negotiations and wants Hamas to participate, it must first stop its military operations in Gaza, a request that Israel is unlikely to meet. And yet, with the region bracing for a possible retaliatory strike by Iran against Israel, Anat said the stakes for these ceasefire talks may be higher than ever. We not only have the lives of hostages, Israeli and foreigners, on the line, the future of the battered Gaza enclave, but also the prospect of a wider regional war with Iran and its allies.

The Gaza ceasefire talks are seen as sort of this key that can really unlock a lot of calm in the region. So it could bring a solution to Gaza, but also Hezbollah has been engaged in a tit for tat with Israel for months, and it says that it is doing this in solidarity with Gaza. So if there was some sort of ceasefire in Gaza that would create calm there, it could just unlock a lot of achievements for the U.S. So there is increasing frustration that we're hearing from mediators and Israeli negotiators as well.

But the U.S. is really keen to get this done. And there are high hopes also from hostage families. – Columbia University President Menouh Shafik has resigned, ending in embattled 13-month tenure that was marked by protests over the Israel-Hamas War. Shafik had managed to hold on to her job in the spring when campus tensions came to a head.

Fierce pro-Palestinian protests forced Columbia to move its classes online and cancel its main graduation ceremony, and some alumni and donors called for Shafik to resign over her handling of the crisis. Her departure now makes her the fifth Ivy League president to have stepped down over the past year. The U.S. could soon get its first large sodium-ion battery factory. We are exclusively reporting that startup Natron Energy plans to invest $1.4 billion to build a North Carolina plant to produce batteries that are safer than the lithium-ion

ones used to power EVs and cheaper thanks to sodium's comparative abundance. A formal announcement of the factory plan could come as early as today. A raft of data out of China today shows the world's second-largest economy is struggling to pick up momentum. Chinese consumers did show flickers of life in July, with retail sales rising 2.7 percent from a year earlier. However, slowing investment growth and woes in the property sector continue to cloud China's broader economic outlook. Wall Street Journal Asia Finance reporter Rebecca Feng says Beijing's efforts to boost economic growth have yet

to gain traction. The biggest sort of drag on Chinese economy remains the China property market and it's an area that the government has been trying to do multiple things like boost demand but also clear up housing inventory which is a pretty big problem in China. And those measures have been in place for months, but they haven't quite worked so far. The government needs to either do more, more significant measures faster now, or the Chinese economy might have a slower growth going forward. And in other news moving markets, Japan has returned to growth in the second quarter,

notching a 0.8% GDP increase thanks to a rebound in consumer spending. That could back the Bank of Japan's case for raising rates last month in the face of some concerns that the economy wasn't strong enough yet to stomach the move. Shares of Ulta Beauty are climbing in off-hours trading after Warren Buffett's Berkshire Hathaway disclosed a position in the cosmetics retailer whose stock has lost a third of its value this year. Separately, Berkshire added to its positions in Occidental Petroleum and Insurer Chub while cutting its positions in Capital One and T-Mobile.

Shares in Cisco are pushing higher off hours after the chipmaker announced plans to lay off 7% of its global workforce, citing a need to cut costs and invest in growth areas. And coming up today, July retail sales data and earnings from Walmart could shed further light on the state of the U.S. consumer. Coming up, correspondent Boyan Pancevsky will join us with the real story on the sabotage of Russia's Nord Stream pipeline. You'll want to stick around for this one after the break.

Introducing TD Insurance for Business with customized coverage options for your business. Because at TD Insurance, we understand that your business is unique, so your business insurance should be too. Whether you're a shop owner, a pet groomer, a contractor, or a consultant, you can get customized coverage for your business. Contact a licensed TD Insurance Advisor to learn more. In the fall of 2022, several months after Russia's invasion of Ukraine, someone blew up three of the four Nord Stream pipelines built to carry natural gas from Russia to Germany, an assault on civilian energy infrastructure unprecedented since the Second World War. But pinning down who was behind the sabotage has eluded investigators for years. Until now, because in a journal exclusive, our chief European political correspondent

Boyan Ponchevsky is now sharing the story of the drunken evening that put the pipeline plot in motion and the rented yacht that made the attack possible. And he joins me now with the details. Boyan, this whodunit has really been a mystery right from the start. What have you now learned? Yep. I've been, as you know, on the story since literally day one after it happened. And now we have an answer to who did it. It was a small group of patriotic Ukrainians. The idea was dreamt up during a drunken night sometime early May in Kiev. Some of them were military officers. Businessmen helped fund the project,

which was executed under the command of the Ukrainian military. They decided to use a very unusual method of blowing up the single biggest offshore pipeline system in the world, which Nord Stream was. They used six people, five men, one woman on a small leisure boat and they loaded it with explosives and off they went. The operation worked like this. It's a small boat, a 50 feet yacht called Andromeda and there were at least four skilled divers on it. They worked in pairs. Two divers would go at a depth of some 80 meters each day and then the other two the next day. What they did is they loaded these explosive packages into their bags and then they went down

all the way and they attached them to the pipeline and they attached a timer to ignite the explosive when the time came. So it was a timed bomb. You have to understand all the expert divers we've spoken to said this was extremely dangerous, obviously, for everyone involved. It's quite the story. I mean, and according to your reporting, Bojan, Ukrainian President Zelensky initially approved this plan, but there was a bit of second guessing after that, as well as US pressure that came to bear here. Tell us about all of that. Indeed, what happened was the Dutch Military Intelligence Service got wind of the operation already in the early stages of its planning. So sometime by June 2022, so a month into the planning, the Dutch warned the CIA. Upon receiving that report, the CIA warned the presidential administration

of Ukraine not to do it. And President Zelensky told his commanding general, General Zaluzhny to knock it off. What happened was that Zaluzhny just didn't do anything. The operation went ahead as planned. It was operating like a startup company, essentially. It was insulated from the officialdom. And in a nutshell, it was very quick, small operation on a shoestring. The whole thing cost around $300,000 to destroy a pipeline, which cost $23 billion to build. We should note here that General Zaluzhny denied any knowledge of such an operation

and that a senior official of the main Ukrainian intelligence agency denied his government's involvement, and President Zelensky's in particular. It's a touchy subject, isn't it, Bolyan, given not least that any state involvement in such an attack could constitute an act of war under international law. Well, indeed, and this is where opinions will diverge because international law, like any other law, depends on interpretation from the Ukrainian perspective. Every single Ukrainian I spoke to, and in fact, some people in the West said this was a legitimate target. Why? Because it was 90% owned by Russia and because it generated enormous revenues for Vladimir Putin's war machine.

So from a Ukrainian perspective, they were cutting the vital revenue to the aggressor state that was invading them at that time. Prosecutors in Germany obviously take another stand. They think this was an attack on their critical infrastructure, which deprived them of vital gas supplies at a time where there was an energy crisis. What the Germans have so far is some evidence on the actual sabotage crew that was on the boat, but they have nothing on the higher up command chain. Have any of the political implications of this blown over at this point, or is this still a live issue where sort of now that the narrative is clear, we could see, I don't

know, political fallout from this? Well, that's anyone's guess, but there is an awareness already in the German public particularly that there possibly was Ukrainian involvement in all this. We have to understand that Germany is now a great friend and supporter of Ukraine. They're locked into this together. I know the German political scene. I can't imagine there will be an enormous push to somehow punish the Ukrainians or do something beyond that. The Journal's Bojan Panchewski in Berlin. Bojan, thank you so much for bringing us this

story. Thanks, Luke. Always great to be on. And that's it for What's News for Thursday morning. Today's show was produced by Kate Bullivant and Daniel Bach with supervising producer Christina Rocca and I'm Luke Vargas for the Wall Street Journal. We will be back tonight with a new show. Until then, thanks for listening.