Corruption Pipeline: The Threat of Nord Stream 2 to EU Security and Democracy

This paper is a continuation of publications on the Kremlin’s subversive activity in Europe prepared by Free Russia Foundation. The first paper, The Kremlin’s Gas Games in Europe, published jointly with the Atlantic Council, looked at Gazprom’s overall current tactics in Europe, including its pipeline plans, energy propaganda, and other policies.

However, after our presentations in the US and Europe earlier this year, we realized that a separate paper specifically focused on certain aspects of Nord Stream 2 was required. Gazprom and its Western partners that are slated to benefit from Nord Stream 2 are aggressively advancing the pipeline as a purely commercial project that will only bring benefits to Europe. The reality is that the Kremlin is the main driver and financial backer of this pipeline plan of Gazprom, Russia’s biggest monopoly, which has a long history of corruption and being used as a political tool in Europe.

This paper also argues that in Russia the project, as was the case with Nord Stream 1, will primarily benefit President Vladimir Putin’s cronies and not the Russian budget or regular consumers. In Europe, as we have shown in The Kremlin’s Gas Games in Europe, the project will result in “divide and rule” political and security outcomes in which German and other big energy corporate interests will override the interests of several Eastern European countries, undermining emerging EU energy principles and the existing transatlantic security architecture. This Moscow-led pipeline seemingly being served as a free and lucrative a gift to European energy corporations, in reality, comes at the expense of taxpayers and the reasonable long-term development of gas resources in Russia. Nord Stream 1 and 2 have already started bringing the Kremlin’s business practices and political cooptation to Europe, and
they will further undermine EU aspirations for better governance, democratic institutions and security.

To understand why this development is accepted in Germany, and meets with weak and confused resistance in the EU, it is important to look at the roots of the friendship between big Western energy companies and Soviet and post-Soviet gas producers. This paper also demonstrates that, apart from Gazprom’s direct partners, there is a group of Western enablers – lobbyists, public relations firms, co-opted dignitaries, and analysts – who help the Kremlin advance the discourse around Nord Stream 2 in ways that are complementary to Putin’s agenda. Some of the propaganda themes employed by these groups date from the Cold War era while others are brand new.

This paper concludes with policy recommendations for the European politicians and regulators who are negotiating Nord Stream 2 as well as for civil society activists dealing with the energy propaganda of Gazprom and its enablers in Europe.

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