william kallop yacht

Goldman Sachs sells Oceanco Natita following seizure

Goldman Sachs has sold the yacht it seized from entrepreneur William Kallop for $27.5 million – a 30% discount on its $39.9 million asking price.

On 15 July, Goldman Sachs seized the 66-metre superyacht S/Y Natita after Kallop defaulted on a $32 million loan he borrowed from the bank in 2014, for which it was used as collateral. The loan financed the yacht’s purchase and was set to mature in December 2016, later extended to March 2017. Kallop stopped making payments in November 2016.

Goldman Sachs appointed Burgess as the central agent to sell the yacht. Natita was sold on to a buyer in Malta for $27.5 million – the buyer was represented by KK Superyachts as the purchasers sub-listed broker.

While this is a substantial drop-off from its asking price, the sale does cover most of the cash that Kallop owes to the bank. When he stopped making payments, $28.4 million was left outstanding.

The yacht as built by Oceanco in 2005 as a custom design for Usmanov. She sits at 66 metres and was a collaboration between Oceanco and Kusch yachts. The interior was designed by Alberto Pinto.

The yacht was first sold to Kallop for €59.9 million in 2010, by Russian billionaire Alisher Usmanov.

The yacht was put back on the market in 2010 for an asking price of €59.9 million, which Kallop paid when he bought it.

Wealth Loans

Financing luxury assets like yachts and jets is generally not the safest investment. Yachts especially decrease in value substantially from user to user. One of the biggest reason banks finance a yacht is to keep hold of or get new high wealth individuals and customers. Most of the time they can pay back the asset without any trouble and banks will be happier to extend the loan than seize the asset.

A bank will need to be pushed to seize the yacht. Firstly, it costs a lot to sell a yacht. Whilst the yacht is on the market, you have to  store, maintain and service the yacht.

Natita’s maintenance costs equated to $4492.72 per day according to court documents – $1819.38 of which was due to docking expenses. As of 30 September, the yacht cost Goldman Sachs $437,803.32 to store.

Also, banks want to keep their customers, they will not descend immediately on them when they miss payments. They will generally try to work with a customer to rearrange a deal.

Oceanco Sunray

Natita is not the only Oceanco yacht to be caught up in a financing scandal involving Goldman Sachs.

The 86-metre Oceanco Sunrays might be seized by New York hedge fund Davidson Kempner Capital Management, according to Bloomberg. It looks to secure $200 million that it is owed from a New York legal ruling. A subsidiary of the hedge fund, Barclays, Credit Suisse and Goldman Sachs provided a loan of $450 million to Essar Global Fund, an investment vehicle controlled by Shashikant and Ravikant Ruia, Bloomberg reported.

Davidson Kempner Capital has already seized the Ruia family’s private B737-700 to help secure the loan. However, $175 million is still outstanding.

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Clearing up a few facts surrounding the M/Y Natita seizure

By Susan Jobe and Lucy Chabot Reed

M/Y Natita , a 217-foot (66m) Oceanco launched in 2005, was seized on July 15 after the owner, Texas oilman William Kallop, failed to make payments on a loan against the yacht.

Court filings show that Kallop borrowed $32 million from Wall Street firm Goldman Sachs Group’s private bank in 2014, using Natita and another of his yachts, the 186-foot (57m) M/Y Bad Girl , as collateral, The Wall Street Journal reported Aug. 10. The bank claims the owner stopped making payments in November, with nearly $28 million left on the loan.

The U.S. Marshal’s warning on M/Y Natita.

Goldman Sachs filed a lawsuit in federal court in Miami to seize the boat. U.S. marshals impounded Natita at Rybovich, a shipyard in West Palm Beach, where the yacht has been docked for more than 20 months. Employees have said the owner owes the shipyard hundreds of thousands of dollars, the Journal has reported.

The financial press credited a former crew member with saying a yacht charter had walked off M/Y Natita in Nassau in March 2016 because it was in such a bad state of disrepair, but that is incorrect. Natita has not had a charter since November 2015, according to several former crew members. Other than traveling to South Florida boat shows and to the Bahamas to clear its boat show bond, Natita has not left the West Palm Beach shipyard.

Former crew members said the yacht that charter guests reportedly walked out on was M/Y Bad Girl , which was not involved in the seizure July 15. After the aborted charter, Bad Girl was moved to Louisiana and now sits in Marina Cap Cana in the Dominican Republic, former crew members said.

The error was originally reported by the Journal , then repeated in stories in other financial media outlets, including MSN, Fox and Business Insider.

In related news, a Florida court recently ordered the owner to pay three crew members, including Capt. Rusty Allen, about $90,000 in wages owed. The media have reported that it is in back pay, but that is also incorrect. The three were owed severance and accrued vacation time at the time of their firing, according to their contracts, Capt. Allen said. And despite the ruling, the crew members had not received their pay as of mid-August.

M/Y Natita was delivered in 2005 as Dilbar and renamed Ona in 2008. Kallop bought the boat in 2010 and named it Natita . The asking price had been 59.9 million euros. Natita was back on the market in 2016 for $57.5 million, with the price reduced to $52 million in September of that same year. The yacht then underwent several more price reductions. It is now listed for $39.9 million with Burgess and Worth Avenue Yachts.

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By SuperyachtNews 18 Aug 2017

Lessons to learn from Goldman Sachs seizing 66m superyacht 'Natita'

In light of goldman sachs seizing william kallop's 66m superyacht natita, we explore the risks that banks face when lending against superyachts.….

Following the news that William Kallop, the American oil mogul, has had his 66m Oceanco-built superyacht, motoryacht Natita, seized by the US branch of Goldman Sachs, we explore whether or not there are lessons to be learned beyond the wisdom that it is always a good idea to repay debts owed to powerful financial institutions. Natita is one of three superyachts owned by Kallop, the other two being 57m motoryacht Bad Girl and a 28m vessel previously used by John F. Kenny, former president of the United States.

The story begins with Kallop borrowing $32 million from Goldman Sachs against Natita and Bad Girl. This form of borrowing, often referred to as a ‘wealth loan’, is becoming increasingly popular with the world’s super rich. Do you want to add a fifth mega-mansion to your portfolio, but your cash is tied up in assets? Why not lend money from a bank against your Picasso, classic Ferrari or superyacht as a security?

According to Goldman Sachs, in November 2016, with $28 million still to pay, Kallop stopped financing the repayments of his loan, eventually leading him to default on the loan and cause Goldman Sachs to take legal action. Upon filing a suit with the Miami federal court, Natita was seized at a marina in West Palm Beach. Three of Natita’s crewmembers were also victorious in the court of law, earning $90,000 in back pay from their time on board. 

Natita was then put on the market for an asking price of $57.5 million, only to have her priced reduced to $52 million that very same year. Subsequently, Natita has undergone a series of price reductions that have left her at the current asking price of $39.9 million, with no takers. The wider media has speculated that Natita will, most likely, be put up for auction.

It is easy to see why banks are becoming increasingly attracted to wealth loans. If the loan period proves to be successful, the financial institution turns a healthy profit, as with a traditional loan, as well as managing to please, and retain the custom of, an extremely wealthy individual. Equally, if the borrower reneges on the agreement the lender may be left with an asset that is far more valuable than the sum of the remaining loan. However, superyachts are not classic cars, art or jewellery and, more so than the former, estimations of value and realistic resale periods can be, at best, contestable.

“For the banks, the risk of superyacht lending is the fact that valuations can be somewhat of a dark art,” explains Leon Batchelor, managing director of Arc&Co. Marine & Aviation. “Nobody really knows what the value of a yacht is – its value is whatever someone will pay for it. That’s why a lot of banks restrict what they will lend against to a specific number of shipyards. So, from the banks’ perspective, the amortisation of the loan may not be quick enough to keep pace with depreciation.

“Secondly, the superyachts are movable assets. Lending against a superyacht will require a certain degree of compliance on the part of the borrower. The banks will be concerned that the vessel could be moved to a jurisdiction within which it becomes impossible to get hold of. The bank will need to limit where the yacht can be used.”

It would be remiss of me to claim that loaning against luxury securities in general does not carry an element of risk. But, unlike other assets, it is extremely rare for a superyacht to appreciate in value – the longer you sit on a yacht ,the less it is worth – and the yearly costs of attempting to stop a vessel from falling into disrepair can be significant. Superyachts, at the end of the day, are loss-making assets apart from the lucky few and, as such, may not necessarily be the most suitable of assets to lend against.

That being said, with only $28 million still to recoup on the loan and a current asking price of $39.9 million, Goldman Sachs is still able to profit substantially from the collapse of the initial agreement. However, sources close to the sale of the vessel have suggested that Natita is proving difficult to sell, partly due to its poor condition, and partly due to its physical makeup. With a draft of five metres, Natita is unsuitable for the US’ most desirable anchorages and her unique canoe stern profile is not exactly the flavour of the month. Her deep draft suggests that the best market for Natita would most likely be Europe. But, yet again, getting her there will incur a significant cost.

Still, all it takes is one wealthy individual to take a fancy and the Natita nightmare becomes a fairy tale, for all accept William Kallop. 

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Goldman sachs seizes oil tycoon's 217-foot yacht.

Goldman Sachs now is the lucky owner of a 217 foot yacht after billionaire Texas oilman William Kallop failed to pay back loans to the bank. Yahoo Finance’s Alexis Christoforous, Nicole Sinclair, and Premier Wealth First Allied Securities Senior Wealth Strategist Mark Martiak discuss if this is a sign of a top.

Goldman puts superyacht on the block

• Eoin O'Cinneide

An Oil Baron Stiffed Goldman Sachs, So It Seized His 217-ft. Yacht

A Texas man, once swimming in oil wealth but now reportedly fallen on hard times, has suffered the ultimate indignity—having his yacht seized by a lender.

William Kallop was until recently the proud owner of the Natita, a 217-foot beauty featuring a movie theater and helipad and named after his mother-in-law. But the Wall Street Journal reports that the Natita is now the property of Goldman Sachs .

Kallop used the yacht as partial collateral for a $32 million loan from Goldman in 2014. Soon after, Kallop—a big spender whose recent acquisitions have included at least seven yachts, eight residences, and three jets—ran short on cash, leading him to lay off employees and try to sell assets.

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But the Natita, initially listed for sale at around $67 million, didn’t attract a buyer. Goldman claims Kallop stopped repaying the $32 million loan in November 2016. So Goldman filed suit and was awarded the boat by a Miami federal court.

The incident highlights what the Journal says is a steady rise in so-called “wealth loans”—large loans to wealthy individuals that are sometimes secured by assets like art, boats, and wine collections. Such loans are picking up as demand for traditional loans declines . Some observers say the drop in traditional lending is a warning sign for the broader economy.

Goldman is likely to auction the boat, which, even after several markdowns, is currently listed for more than the outstanding balance of its loan to Kallop.

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The Honey Fitz is back in business

Kennedy's presidential yacht restored to vintage luster.

The way she bobs low and sleek between towering two- and three-deck fiberglass yachts at her West Palm Beach marina home, her wooden transom lettered in gold, the Honey Fitz almost looks quaint.

That is, until you see the presidential seal gracing her smokestack.

The presidential yacht John F. Kennedy made famous, a symbol of Camelot that cruised the Intracoastal Waterway near the family’s winter retreat in Palm Beach County, has returned to the seas.

After a two-year renovation here, the Honey Fitz, which started life as a luxury liner and went on to serve five sitting U.S. Presidents, is resurrected as a charter vessel that will spend the next year raising money for charities along the east coast, from West Palm Beach to Nantucket, Mass.

The 93-foot wooden ship, built in 1931 for Montgomery Ward tycoon Sewell Avery, lived through many iterations, from luxury cruiser to commandeered World War II mine sweeper. But it was restored to its most famous era, when it was the pleasure vessel for President Kennedy and his family.

Its current owner, Texas oil executive William Kallop, bought the Honey Fitz at Sotheby’s famed Camelot auction in 1998 for $5.9 million. His grandfather Anthony McKinley Kallop was a classmate of Kennedy’s during the future president’s brief stint at Princeton as a freshman.

Like all things attached to Kennedy, the ship — which the president named after his paternal grandfather, Boston Mayor John Francis Fitzgerald, whom everyone just called Honey Fitz — is a magnet for historians and fans of the era.

“One of (Kallop’s) main objectives is preserving history and this is a national treasure,” said crew member Francis Pavlov, the Honey Fitz’s director of charter sales as well as its executive chef. “Part of this goodwill tour is so that everyone can see it and everyone can enjoy it.”

The Honey Fitz will set sail for its 14-city charity tour up the coast, stopping for stretches of five days to two weeks, to serve as a fundraising tool for charities from wounded veterans in Charleston, S.C., to autism research. The other times, it’s available for charter for $5,000 for four hours.

When she arrived in West Palm Beach for restoration, the Honey Fitz was a far cry from Camelot. Piecemeal restorations had left the wooden vessel with a hull that was twisted 15 degrees off center and was starting to show the strain of a wooden ship that has sailed the Atlantic for more than 70 years.

The renovation started at Moores Marina, which specializes in vintage American powerboats, to straighten her hull and painstakingly re-plank her wooden sides by hand.

From there, she was handed off to her current crew, with Capt. Mark Glasser, First Mate Paul Ocepek and their staff finishing the restoration. The big question was whether to leave the aft section open to the elements, as the Kennedys had used her. Instead, they chose to leave the area enclosed, the way President Nixon had ordered done, to make for a more comfortable charter vessel and to protect the many pieces of presidential memorabilia from the elements.

Inside is the glistening mahogany bar the presidents used and pictures of the Kennedys aboard their beloved ship. In one corner, lovingly restored over 15 hours by Glasser himself, is the small curved desk Kennedy used aboard.

Nearby, there’s a framed copy of Princeton’s “Freshman Herald” yearbook, which shows Kennedy and Kallop’s grandfather as part of its class of 1939. But an illness would force Kennedy to withdraw by midyear.

On another wall are pictures of Eisenhower and his family, who had named this ship the Barbara Anne, and the framed Burgee flag Eisenhower flew on her bow.

“President Kennedy used the boat more than any of the other presidents,” Ocepek said.

The romantic spirit of the yacht remains. She was a dedicated party ship, a day-tripper — since there is only one stateroom onboard. It has a huge galley easily 150 square feet to cook for the 70-people who could enjoy the views from deck, a wide expanse that makes up two thirds of the ship’s topside.

“It’s a regular dance hall up here,” Glasser says from the royal blue-carpeted deck overlooking the Rybovich marina, where she’s docked.

Everywhere she goes, she draws a crowd with her glistening white hull and sporty red stripe just above the blue bottom.

A month after receiving her U.S. Coast Guard certificate of inspection in October, meaning she could carry paying passengers, the Honey Fitz was named the Spectator’s Choice at the exclusive annual Ocean Reef Club’s Vintage Weekend in Key Largo, where some of the rarest automobiles, airplanes and boats are displayed.

More than 540 visitors viewed the Honey Fitz that day.

“There was a line down the dock the entire day,” Ocepek said. “She gets a lot of attention.”

This crew figures that’s just the beginning for this historic ship’s return to public life.

THE HONEY FITZ: For more information, check myhoneyfitz.com

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Why Goldman Sachs Seized a Yacht -- WSJ

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (August 11, 2017).

Goldman Sachs Group Inc. owns hundreds of billions of dollars of stocks, bonds and commodities. Add to its portfolio: a 217-foot luxury yacht called Natita.

The story behind the boat begins with a 2014 loan to a prized Goldman client, billionaire Texas oilman William Kallop. It ends with Goldman suing its own client and the U.S. Marshals last month swooping down on a West Palm Beach marina to impound the yacht -- which boasts a movie theater, Jacuzzi and helipad.

Goldman's nautical trophy is a strange but inevitable outcome of Wall Street's latest gold rush: lending to wealthy clients, the loans backed by everything from Warhols to wine.

These loans, which are growing quickly at firms such as Goldman, Morgan Stanley and UBS Group AG, are an exotic spin on the most basic thing banks do: lending money to people. They have the added benefit of building loyalty among prized, ultrawealthy clientele.

Like any loans, though, they can go bad and leave banks holding assets that aren't easy to value or sell. Goldman will likely auction Natita, which already has been on the market for almost two years with no takers.

A Goldman spokesman declined to comment on the case. Mr. Kallop didn't respond to requests for comment. A lawyer for Mr. Kallop declined to comment.

"If you do it right, it's a great business and clients will absolutely love you for it," said Bruce Holley, a partner at the Boston Consulting Group who advises private banks on wealth-management strategy. "But there are a lot of ways to mess up."

Banks pushed wealth lending in recent years against a backdrop of increasing deposits and tepid demand for traditional loans. Goldman's private bank has quadrupled its overall lending balances since 2012 to $29 billion. Morgan Stanley wealth-loan balances are up 420% since 2012 to $74 billion.

The largest chunk of wealth loans are mortgages and loans backed by stock portfolios. A smaller but growing segment is secured by valuables such as classic cars, hedge-fund stakes, and even rare violins.

Wealth loans are especially profitable for banks because the revenue they generate is shared less generously with brokers than trading commissions and other fees.

Banks say these loans are safe because they already know the borrowers, their assets, and their ability to repay. And unlike, say, credit cards, these loans have collateral and often a personal guarantee as well. Goldman said in a February filing that the value of collateral in its wealth loans "generally exceed[s]" the loan amount.

Morgan Stanley and Deutsche Bank AG have lent against the art collection of hedge-fund billionaire Steven A. Cohen, who owns works by Andy Warhol and Pablo Picasso, according to Connecticut state filings. Top Blackstone Group LP executives including founder Stephen Schwarzman have borrowed from UBS against their stakes in the private-equity firms' funds, New York filings show.

Goldman lent to natural-gas wildcatter Aubrey McClendon against his wine collection, according to an Oklahoma filing. Executives joked the collateral was "particularly liquid." After Mr. McClendon's death in 2015, the collection -- heavy on rare Bordeaux -- was auctioned for $8.4 million. Goldman made its money back.

Although not as well-known as those borrowers, Mr. Kallop was the kind of client whom private banks court.

In the 1970s, he joined a family-owned marine-services company called McAllister Towing & Transportation. A legal dispute in 1993 resulted in a split of the company. The tugboat and ferry operations stayed with the family. Mr. Kallop took the offshore oil business, which he built over the next two decades into a portfolio of drilling rights, rig operators and construction arms.

He sold the business for nearly $1 billion in 2009 to a consortium of Colombian and Korean investors. Mr. Kallop then dabbled in investing, taking a 7% stake in energy company Quicksilver Resources and buying a 300-year-old liquor distillery in Peru.

He spent lavishly, acquiring three Gulfstream jets and at least eight residences, including a Peruvian mansion, two homes in the Dominican Republic and a working cattle ranch in Texas, according to property record, lawsuits and people who have worked for him.

And he bought yachts -- at least seven of them over the past eight years.

In addition to Natita, which he bought in 2010 and named for his mother-in-law, Mr. Kallop's fleet includes Bad Girl, moored in the Dominican Republic, and Honey Fitz, a 93-footer used by President John F. Kennedy that he bought at Sotheby's Camelot auction in 1998 and restored.

Another yacht, La Diva, which was once owned by Ivana Trump, was destroyed in a fire.

A few years ago, Goldman came calling. The Wall Street firm's private bank manages some $450 billion in assets for 11,500 ultrarich clients, and was developed in the 1980s to help business owners like Mr. Kallop manage their windfall after a sale.

Mr. Kallop became a client. In 2014, he borrowed $21.2 million from the bank to buy a 12,000-square-foot Tahitian-inspired oceanfront mansion just down the beach from Mar-a-Lago, President Donald Trump's private club in Palm Beach, Fla., county records show.

In 2014, Mr. Kallop borrowed $32 million from Goldman against the Natita and Bad Girl, court records show. The loan, the maritime equivalent of a home-equity loan, carried an interest rate of three percentage points above the London interbank offered rate.

But then Mr. Kallop hit money troubles, according to former employees and acquaintances. He put off upgrades to the boats, which were showing signs of wear -- bad enough for a March 2016 charter group to walk off Natita in Nassau, a former crew member said.

Goldman ordered periodic valuations of the yacht after making the loan, according to the crew member.

Mr. Kallop laid off crew members and put Natita up for sale in 2015 for EUR59.5 million ($67 million at that time), then dropped the price to $57.5 million last year, according to court documents. He sold a second Palm Beach house in April 2015 for $19 million. Goldman alleges he stopped paying back on the loan last November.

Three crew members, including the captain, were recently awarded roughly $90,000 in back pay by a Florida court. A Texas judge last month awarded his former bodyguard more than $500,000 for unpaid services. Mr. Kallop also owes the Florida marina where Natita is docked hundreds of thousands of dollars in fees, employees said.

Eventually, Goldman filed suit in a Miami federal court to seize the boat in a maritime version of a foreclosure. Acting on a judge's orders, U.S. Marshals impounded Natita at a West Palm Beach marina, where it remains.

Goldman's first move as owner-in-waiting: buying $67,000 worth of fuel to keep the yacht's generator running, according to court filings.

Today, the yacht is listed for $39.9 million, according to broker Worth Avenue Yachts. The outstanding balance of the loan owed to Goldman is roughly $28 million.

Write to Liz Hoffman at [email protected]

(END) Dow Jones Newswires

August 11, 2017 02:47 ET (06:47 GMT)

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OUR HISTORY

The HONEY FITZ is a prestigious, 93-foot wooden yacht that has had the honor of serving five U.S. presidents: Harry S. Truman, Dwight D. Eisenhower, Lyndon B. Johnson, Richard M. Nixon, and most notably, John F. Kennedy.

Constructed in 1931 by Defoe Boat & Motor Works in Bay City, Michigan, for Montgomery Ward magnate Sewell Avery, the HONEY FITZ is a 92-year-old ship currently docked at the Pelican Club in Jupiter, Florida. The HONEY FITZ has undergone a thorough restoration, carefully revitalized to showcase the historic elegance and distinctive style characteristic of the Kennedy era.

In partnership with Lessing’s Hospitality Group, the HONEY FITZ crew captains, Gregory S. Albritton and Katelyn J. Kiefer, initiated an extensive, critical restoration process in February 2020. This effort was paramount in preventing the complete deterioration of the vessel. Spanning three years, the restoration endeavor focused on preserving elements from its original 1931 construction and, more significantly, on highlighting its celebrated tenure as a presidential yacht during the Kennedy Administration.

The Honey Fitz, exclusively available for charter, offers guests the opportunity to explore its historical features and components dating back to the yacht’s initial construction in 1931, its role during World War II, and its esteemed service to U.S. presidents from 1945 to 1971. This meticulous preservation and restoration work ensures that the HONEY FITZ remains a living testament to an important piece of American history, reflecting the legacy and luxury of a bygone era.

Designed by Thomas D. Bowes, the vessel “Lenore” was launched in July 1931 at Defoe Boat and Motor Works, in Bay City, Michigan, commissioned by Sewell L. Avery of Montgomery Ward. The yacht was named after Avery's daughter Lenore, and primarily used on Lake Michigan. On August 15, 1942, the U.S. Government requisitioned the Lenore repurposing it for WWII, where it was assigned to the United States Coast Guard and renamed CG-92004.

1942-November 1945

The U.S. Government transferred CG-92004 to a U.S. Coast Guard Yard in Curtis Bay, Maryland, where it was then militarized. CG-92004 was then assigned to various duties, including coastal picket patrol at Rockaway Point and Fire Island, NY. Often, the vessel would be assigned detachment duty with Comsublant headquarters in New London, Connecticut aiding officers to train against enemy submarines. With the end of WWII, CG-92004 was transferred to the U.S. Navy of Defense, stationed in Washington, D.C. and served as a tender for the USS Potomac.

November 1945-January 1961

During the presidencies of Truman and Eisenhower, the vessel, renamed Lenore II and then Barbara Anne, underwent significant refurbishments and began its service as an Official U.S. Presidential Yacht. The president and first family had personal use of the yacht, hosting various events and outings. It was often used as a tender to the USS Williamsburg to carry secret service.

January 1961-November 1963

Under President Kennedy, the yacht was renamed Honey Fitz. It was refurbished according to Jacqueline Kennedy's tastes, and frequently used for family trips along the east coast primarily in Hyannis Port, Massachusetts, Newport, R.I. and Palm Beach, Florida. The Kennedys spent Easter and Christmas holidays aboard the yacht and President Kennedy hosted dignitaries on official outings.

November 1963-December 1971

President Johnson retained the Honey Fitz, honoring President Kennedy. During the Nixon Administration, the yacht underwent refurbishment and was renamed Patricia. Soon after, Nixon decommissioned the vessel, and it was put up for sale at auction in 1970. The Patricia was then purchased by Joseph B. Keating in 1971, marking its first civilian ownership since Sewell L Avery.

Renamed as “The Presidents” under Keating’s ownership, the yacht was chartered for dinner parties and day cruises. In the late 1990s, the yacht was put up for sale after it fell into a state of disrepair and placed onto a barge to prevent the yacht from sinking. William Kallop, a Texas businessman, made the winning bid at a 1998 Guernsey’s Auction of Kennedy memorabilia.

Under William Kallop, the vessel was renamed Honey Fitz again and underwent a significant hull restoration that successfully restored the vessel back into water. The Kallop family hosted charity events and chartered the Honey Fitz along the east coast. Despite numerous attempts at topside repairs, it began to fall back into a state of disrepair and sat dormant.

2020-Current

In partnership with Lessing’s Hospitality Group, the Honey Fitz was purchased in 2020 and embarked on a three-year restoration to preserve its historical significance and restore its Kennedy-era grandeur. Currently, the Honey Fitz engages in charitable events and is available for private charter through the Pelican Club in Jupiter, Florida.

• EILMELDUNG — __proto_headline__

After the attack: damage to the Nord Stream 2 pipeline

Investigating the Nord Stream Attack All the Evidence Points To Kyiv

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The Andromeda is a decrepit tub. The sides of the vessel are dented and scraped from too many adventuresome docking maneuvers while the porous pipes in the head exude a fecal stench. The 75 horsepower diesel engine rattles like a tractor and the entire boat creaks and groans as it ponderously changes course. The autopilot is broken. Other sailors hardly take any notice at all of the sloop: Just another worn charter vessel like so many others on the Baltic Sea.

The perfect yacht if you're looking to avoid attracting attention.

The article you are reading originally appeared in German in issue 35/2023 (August 25th, 2023) of DER SPIEGEL.

According to the findings of the investigation thus far, a commando of divers and explosives specialists chartered the Andromeda almost exactly one year ago and sailed unnoticed from Warnemünde in northern Germany across the Baltic Sea before, on September 26, 2022, blowing holes in three pipes belonging to the natural gas pipelines Nord Stream 1 and Nord Stream 2. It was a catastrophic assault on energy supplies, a singular act of sabotage – an attack on Germany.

The operation was aimed at "inflicting lasting damage to the functionality of the state and its facilities. In this sense, this is an attack on the internal security of the state." That's the legal language used by the examining magistrates at the German Federal Court of Justice in the investigation into unknown perpetrators that has been underway since then.

Unknown because – even though countless criminal investigators, intelligence agents and prosecutors from a dozen countries have been searching for those behind the act – it has not yet been determined who did it. Or why. The findings of the investigation thus far, much of them coming from German officials, are strictly confidential. Nothing is to reach the public. On orders from the Chancellery.

A diver with the German Federal Police's GSG9 special force

"This is the most important investigation of Germany's postwar history because of its potential political implications," says a senior security official. Those within the Federal Criminal Police Office (BKA) who are responsible for the Nord Stream case, members of Department ST 24, are even prohibited from discussing it with colleagues who aren't part of the probe. Investigators are required to document when and with whom they spoke about which aspect of the case – a requirement that is extremely unusual even at the BKA, Germany's equivalent to the FBI.

There is a lot at stake, that much is clear. If it was a Russian commando, would it be considered an act of war? According to Article 5 of the North Atlantic Treaty, an attack on the critical infrastructure of a NATO member state can trigger the mutual defense clause. If it was Ukraine, would that put an end to Germany's ongoing support for the country with tank deliveries or potentially even fighter jets? And what about the Americans? If Washington provided assistance for the attack, might that spell the end of the 75-year trans-Atlantic partnership?

German Interior Minister Nancy Faeser

Beyond that, as if more critical questions were needed, the Nord Stream attack has provided a striking blueprint for just how easy it can be to destroy vital infrastructure like pipelines. "It immediately raised the question for me: How can we better protect ourselves," says German Interior Minister Nancy Faeser. "The disruption of critical infrastructure can have an enormous effect on people's lives."

There are plenty of targets for such attacks: internet nodes, oil pipelines, nuclear power plants. One can assume that close attention is being paid in North Korea, Iran and other terrorist states on what exactly will happen now. If the perpetrators are not found, if the sponsors of the attack are not sanctioned, if there is no military reaction – then the deterrents standing in the way of similar attacks in the future will be significantly fewer.

But there are leads. DER SPIEGEL, together with German public broadcaster ZDF, assembled a team of more than two dozen journalists to track them down over a period of six months. Their reporting took them around the globe: from the Republic of Moldova to the United States; from Stockholm via Kyiv and Prague to Romania and France. Much of the information comes from sources who cannot be named. It comes from intelligence agencies, investigators, high ranking officials and politicians. And it comes from people who, in one way or another, are directly linked to suspects.

An image taken underwater after the bombing attack on Nord Stream 1

At some point in the reporting, it became clear that the Andromeda had played a critical role, which is why DER SPIEGEL and ZDF chartered the boat once the criminal technicians from the BKA had released it. Together, six reporters followed the paths of the saboteurs across the Baltic Sea to the site of one of the explosions in international waters.

This voyage on its own did not reveal the secrets of the attack, but it made it easier to understand what may have happened and how – what is plausible and what is not. And why investigators have become so convinced that the leads now point in just one single direction. Towards Ukraine.

That consensus in itself is striking, say others – particularly politicians who believe the attack from the Andromeda may have been a "false flag" operation – an attack intentionally made to look as though it was perpetrated by someone else. All the leads point all-too-obviously towards Kyiv, they say, the clues and evidence seem too perfect to be true. The Americans, the Poles and, especially, the Russians, they say, all had much stronger motives to destroy the pipeline than the Ukrainians.

Still others believe that too many inconsistencies remain. Why did the perpetrators use a chartered sailboat for the operation instead of a military vessel? Why wasn't the Andromeda simply scuttled afterwards? How were two or three divers on their own able to blow up pipelines located at a depth of around 80 meters (260 feet) beneath the waves?

The story of the operation is a preposterous thriller packed full of agents and secret service missions, special operations and commando troops, bad guys and conspiracy theorists. A story in which a dilapidated sailboat on the Baltic Sea plays a central role.

It's a chilly January day in Dranske, a town on the northwest tip of the German Baltic Sea island of Rügen. The law enforcement officials show up at 9:45 a.m. for the search, 13 of them from the BKA and Germany's Federal Police, including IT forensic experts, a crime scene investigator and explosives specialists. Their target on this morning are the offices of Mola Yachting GmbH, and they tell the shocked employees that they have a search warrant for a boat that was chartered from the premises. The punishable offense listed on the warrant: "The effectuation of an explosive detonation, anti-constitutional sabotage."

They demand to know where the Andromeda is. The technical chief of Mola tells them it is in winter storage, a few hundred meters away. He leads the group of law enforcement officials along a secluded private road to a former East German army facility, as a confidential memo documents. The Andromeda is sitting on blocks out in the open, with workers sanding down the hull. The search begins at 11:05 a.m. It lasts three days.

The investigators are lucky. Mola didn't clean the boat before storing it for the winter, and the saboteurs were the last people to charter the vessel. A plastic bottle "with apparently Polish labeling" is found next to the sink. Beneath the map table is a single "barefoot shoe." According to the BKA's search log, file number ST 24-240024/22, the officials remove the marine navigation system, a model called Garmin GPSMAP 721.

The sailing yacht Andromeda in the Baltic Sea

Christian Irrgang / DER SPIEGEL

The next day, the federal police bring two bomb-sniffing dogs onboard; they have to be hoisted up using a kind of winch. They spend more than an hour sniffing around onboard the Andromeda . With success, as forensics experts would later confirm in the lab. On a table belowdecks and even on the toilet, they are able to find substantial traces of octogen, an explosive that also works underwater.

Ever since the search of the ship on those days in January, German investigators have been certain that the Andromeda is the key to the Nord Stream case. Finally, a breakthrough.

Early in the investigation, it seemed that such a breakthrough would never come. The few leads the detectives had all turned up nothing of substance, and they had no clear indications of who the perpetrators might be. But then, a few weeks after the attack, intelligence was passed to the BKA indicating that a sailboat was involved.

To avoid causing concern and attracting unwanted attention, the investigators contacted boat rental companies in Rostock and surroundings one at a time – ultimately zeroing in on Mola and the Andromeda .

It was a rather surprising development for the public at large, particularly given that other scenarios seemed so much more likely: submersibles, specialized ships, at least a motorboat or two. But a single sailboat as the base of operations for the most significant act of sabotage in European history?

German officials were also skeptical at first. The federal public prosecutor general commissioned an expert analysis with a clear question of inquiry: "Whether such an act could be carried out with a completely normal yacht or if a much, much larger vessel was necessary." Such was the formulation used by Lars Otte, the deputy head of the Federal Public Prosecutor's Office, during a confidential, mid-June session of the Internal Affairs Committee of German parliament, the Bundestag. Speaking to the gathered parliamentarians, he stressed: "The assessment of the expert is: Yes, it is also possible with a completely normal yacht of the kind under consideration."

On September 6, 2022, the Andromeda was bobbing in the waves along with dozens of other boats in a marina in Rostock's Warnemünde district waiting to be taken out by its next renters. For the last decade, it has been plowing through the Baltic Sea every few days, with a new charter crew at the helm. The Andromeda is a Bavaria 50 Cruiser, built in Bavaria in 2012 and frequently belittled by sailors as the "Škoda of the seas." Not exactly elegant, but practical, a bit like a floating station wagon: 15.57 meters (roughly 51 feet) long and a beam of 4.61 meters, it is rather affordable for its size.

Belowdecks, it has five small cabins with space for a maximum of 12 people, if you don't mind a bit of crowding. The double berths are hardly 1.2 meters wide. By contrast, though, there is plenty of storage space and the kitchenette is relatively spacious, complete with a gas stove and a banquette surrounding a varnished dining table. A swimming platform can be folded down from the stern, making it easy to take a dip. It is ideal for divers with their heavy equipment.

A cabin on board the Andromeda

The marina Hohe Düne is located around 10 kilometers from the Rostock city center as the crow flies, a strangely lifeless place with a giant wellness hotel and a solitary pizzeria. Long piers wind their way out into the water to 920 morages, with a small wooden structure right in the middle of Pier G. Those who have chartered a yacht with Mola Yachting must register here, complete with identification, sport boat license and a 1,500-euro deposit.

On September 6, according to reporting by DER SPIEGEL and ZDF, a sailing crew checked in at the Mola shack in the early afternoon to take out the Andromeda . The charter fee had apparently been paid by a Warsaw travel agency called Feeria Lwowa, a company with no website or telephone number.

According to the Polish commercial registry, the company is headed by a 54-year-old woman named Nataliia A., who lives in Kyiv. She completed a course of study in early childhood education, but has no recognizable experience in the tourism industry. She has a Ukrainian mobile phone number. If you call it, a woman answers – before immediately hanging up once you identify yourself as a journalist. A few days later, a Ukrainian "police officer" called back, threatening the reporter with charges of "stalking," citing a rather flimsy justification. Feeria Lwowa's address in Warsaw likewise leads nowhere. There is no office and there are no local employees. It looks as though it is a shell company.

And something else would soon prove to be extremely challenging for investigators: When the saboteurs showed up at the Mola shack to check in for their rental of the Andromeda , they apparently presented a Romanian passport. It had been issued to a certain Ştefan Marcu, as official documents indicate. But who was he? Did he have anything to do with the attack?

Marcu opens the steel gate to his property wearing shorts and flipflops. It is the middle of July, a hot day in Goianul Nou, a village in Moldova just north of the capital of Chiᶊinǎu. The Ukrainian border isn't even 50 kilometers from here.

Ştefan Marcu is a sturdily built man with a deep tan and a black moustache, an engineer with his own company. A team from DER SPIEGEL and ZDF along with reporters from the investigative networks Rise Moldova and OCCRP managed to track him down. The two-story home where he lives with his family is the most attractive one on their street. Marcu stares down at the note the reporters show him, bearing the number 055227683.

Was Ştefan Marcu's passport forged?

He recognizes it immediately. He says he is a citizen of Moldova, but that the number belonged to his old Romanian passport, which expired the previous October. The last time he used the passport, he says, was in 2019 for a vacation in Romania and then, a couple months after that, for a trip to Bulgaria. He says he has no idea how his name got mixed up in the pipeline story. It's the first time he's heard about it, he insists. Aside from the reporters, nobody else has asked him about it, he says, no police officers and no intelligence agents.

After he received his new passport, he says, the woman at the office invalidated his old one. "When I got home, I burned it. I threw it in the oven," Marcu says.

But the data from his passport, officials believe, seems to have been used to produce another document, a falsified passport that was then used to charter the Andromeda . Complete with a new photo. The photo, though, is not of Ştefan Marcu, the 60-year-old from Moldova, but of a young man in his mid-20s with a penetrating gaze and military haircut. The man in the photo is very likely Valeri K. from the Ukrainian city of Dnipro. He apparently serves in the 93rd Mechanized Brigade of the Ukrainian army.

It's not possible to determine precisely when the saboteurs left the Hohe Düne marina. But the very next day, on September 7, they made their first stop just 60 nautical miles away in Wiek, a tiny harbor on the north coast of Rügen. Under normal circumstances, it is part of a long but idyllic sailing trip along the coast of Mecklenburg-Western Pomerania, past the Fischland-Darss peninsula and the island of Hiddensee.

It takes the team of reporters around 12 hours to sail this first leg of the journey, in pleasant, mid-July weather and calm seas. For most of that distance, the Andromeda is propelled by its motor, at a relatively constant clip of seven to eight knots. In a strong wind, when the mainsail can be set on the 22-meter-tall mast along with the jib, the ship can reach speeds of 10 to 11 knots.

In contrast to Warnemünde, Wiek is a solitary, isolated place, vastly different from the busy Rostock marina. Those wishing to load up their boat in Rostock have to push a handcart back and forth across long piers past dozens of other boats and crews. In Wiek, though, it is possible to drive a delivery truck right up to one of the few moorages that are large enough for a vessel the size of Andromeda . When the skipper of the DER SPIEGEL/ZDF voyage called ahead to reserve a moorage, the harbormaster asked: "Do you want the same spot as the terrorists?"

The harbor master in Wiek on the island of Rügen

The harbor master's notebook, with amounts of diesel pumped and the price

Still, during our visit, marina staffers prove reluctant to talk about the Andromeda and its stopover, at least not on the record. One of the workers who has clear memories of the sailboat's layover and who dealt directly with the crew says that the people on board seemed physically fit and familiar with each other, and that they spoke in a language he was unfamiliar with.

The crew was made up of five men and a woman, says the harbormaster, who filled up the fuel tank of the Andromeda for the saboteurs. That was during the boat's second stop in Wiek, on the return trip to Warnemünde. He wrote down the amount paid for the diesel in a black notebook, the same one he uses to record the fuel purchased by the crew of reporters.

The harbormaster flips back through his notebook and finds two entries that may have been for the diesel purchased by the team of saboteurs: one for 665.03 euros and one for 1,309.43 euros on September 22 and 23, respectively. In addition to filling the boat's tank, though, he recalls, he was also asked to fill up several canisters. One of the men paid for the fuel in cash, pulling a striking number of large-denomination euro bills out of his pocket to do so – but he didn't leave a tip.

After the first stopover in Wiek, the Andromeda disappeared for an extended period. With the help of a meter, investigators have determined that the crew didn't sail the ship and used the motor instead. Around 10 days later, the vessel apparently reappeared off the island of Christiansø, not much more than a rock jutting out of the waves near Bornholm, so small that it is sometimes called Pea Island. The port lies attractively below defensive fortifications built in 1684. The island, located near the easternmost point of Denmark, is home to hardly more than 100 residents, but it is a popular destination for day-trippers who sail over from the vacation island of Bornholm for a lunch of kryddersild .

The harbor at Christiansø in Denmark

It seems safe to say, though, that the saboteurs weren't there for the pickled herring: Christiansø is the nearest port to the site of the detonations. And a chartered sailboat doesn't stand out at all, with almost 50 vessels sailing in and out on busy days, says Søren Andersen. The chief of administration for the tiny islands, Anderson is sitting among portraits of the Danish royal family in a white-plastered building with a green door made of wood and a sign reading "Politi," police. "In December, the Danish police requested us to share all the port data" from September 16 to 18, 2022, says Anderson.

That was when the commando on board the Andromeda made a brief detour – directly south to Poland. On September 19, exactly one week before the pipelines were blown up, the Andromeda docked in Kołobrzeg, Poland, a Baltic Sea resort known for its saline springs and usually packed with tourists during the summer months. And with sailboats. The Andromeda only stayed for 12 hours.

Poland was always one of the most adamant opponents of Nord Stream 2 and vociferously demanded over the course of several years that the project be stopped. Warsaw long viewed Germany's dependence on energy from Moscow as an existential threat. It would be fair to say that Poland had a strong interest in eliminating this threat to its security right off its coastline once and for all.

In May, German investigators traveled to Poland for a "meeting at the level of the prosecutor's offices conducting the investigation," as it would later be described. One question addressed during that meeting was whether the saboteurs had received any support while in Kołobrzeg, either of a material nature, or in the form of personnel. They wanted to know if the port may have been used as a logistical hub.

The responsible public prosecutor in Danzig, from the department for organized crime and corruption, vehemently denies such a scenario when asked. "There is absolutely no evidence for the involvement of a Polish citizen in the detonation of the Nord Stream pipelines," he says. "The investigation has found that during the stay in a Polish harbor, no objects were loaded onto the yacht." In fact, he notes, "the crew of the yacht was checked by Polish border control officials" because they had raised suspicions. Perhaps because of the falsified documents used by the crew? Whatever triggered their concerns, the border control officials made a note of the personal information they had presented.

By September 20, the Andromeda had already departed from Kołobrzeg. By this time, the explosives had likely already been laid and equipped with timed detonators. Christiansø, the sailboat's previous port of call, is, in any case, the closest to the main detonation site. It is located just 44 kilometers – less than a three-hour voyage to the northeast – from the coordinates 55° 32' 27" north, 15° 46′ 28.2" east.

The Baltic Sea gets rather lonely to the east of the Pea Islands. There are fewer ferries, fewer tankers and not too many sailboats either. For miles around, there is nothing but water and sky.

There is, however, something to see on the sonar, some 80 meters below: Four pipes, each with an inside diameter of 1.15 meters, wrapped in up to 11 centimeters of concrete which keeps them on the sea floor, and a layer to protect against corrosion. Beneath that is four centimeters of steel and a coating to ensure the natural gas flows more freely on its long journey from Russia to Germany.

Nordstream 1 begins in the Russian town of Vyborg and runs through the Gulf of Finland and crosses beneath the Baltic Sea before reaching the German town of Lubmin, located near the university town of Greifswald.

The double pipeline is 1,224 kilometers long and consists of 200,000 individual segments, most of which were produced by Europipe in Mühlheim, Germany. During construction, 15 freight trains per week rolled into the ferry port of Sassnitz, where the pipe segments were loaded onto a ship. The project's price tag was 7.4 billion euros, with most of it paid for, directly or indirectly, by the Russian state.

It went into operation in 2012, sending almost 60 billion cubic meters of natural gas from the Russian fields Yuzhno-Russkoye and Shtokman, located on the Barents Sea, to Germany. In 2018, the pipeline accounted for 16 percent of all European Union natural gas imports. Nord Stream 1 was one of the most important pipelines in the world.

Then Russian Prime Minister Vladimir Putin aboard the ship laying the Nord Stream pipeline in 2010

In spring 2018, dredgers again sailed into the Bay of Greifswald to make way for Nord Stream 2, also a double pipeline. This one starts a bit further to the south, in the town of Ust-Luga, located in the Leningrad Oblast – but most of it runs parallel to the first pipeline. It was planned to carry 55 billion cubic meters of Russian natural gas per year to Germany. Taken together, the two pipelines were able to transport far more than Germany consumed each year. Most Germans were in favor of the new pipeline project, blinded to their country's growing dependency on Moscow by the cheap price of Russian gas. A 2021 survey among supporters of all political parties found that an average of 75 percent of Germans were in favor of Nord Stream 2.

Security policy experts and many of Germany's international allies, by contrast, were aghast. Nord Stream 1 had already tied Germany far too closely to Russia, they felt. And now Berlin wanted to import even more energy from Vladimir Putin's empire? The Americans, in particular, were vocal about their opposition to the project. Indeed, Washington thought Nord Stream 2 was so dangerous that it warned Germany that its completion would significantly harm U.S.-German relations.

Ukraine was also radically opposed to the new pipeline. Significant quantities of Russian natural gas flowed to Western Europe through overland pipelines across Ukrainian territory. A second pipeline beneath the Baltic would make parts of the Ukrainian pipeline network obsolete. Kyiv saw Nord Stream as a direct threat to the country.

In September 2021, Nord Stream 2 was completed, but it did not go into operation. And a few months later, the Russian invasion of Ukraine put an end to the political debate – and left Germany scrambling to free itself from dependency on energy imports from Russia as quickly as possible. The initial plan called for continuing to import natural gas through Nord Stream 1 for a time, but the second pipeline was essentially dead in the water.

For the time being, at least. But politics can be fickle, consumers and industry have a fondness for cheap energy and Putin wouldn't be around forever, would he? The four pipes lay on the seabed, ready to be put back in use once that time came.

At 2:03 a.m. on September 26, a blast wave rippled through the bed of the Baltic Sea, powerful enough to be recorded by Swedish seismographs hundreds of kilometers away. The welded seam between two segments of pipe A of Nord Stream 2 was shredded. It was a precise cleavage, likely caused by a relatively small amount of perfectly placed specialized explosive material: octogen. Exactly the same explosive of which forensics experts would later find traces onboard the Andromeda . The explosion initially ripped a roughly 1.5-meter gap in the pipe, but the gas gushing out enlarged the leak.

Seventeen hours later, at 7:04 p.m., there was another blast wave, this time 75 kilometers to the north. It was much stronger, and there were several explosions. Above water, the muffled blast could be heard several kilometers away. This time, both pipes belonging to Nord Stream 1 were destroyed: a 200-meter section of pipe A and a 290-meter segment of pipe B. A 3-D visualization based on underwater camera footage and sonar readings shows deep craters, piles of rubble and bits of pipeline sticking up diagonally from the seafloor.

Initially, nobody knew just how dramatic the situation was, not even the operators of the two pipelines, Nord Stream AG and Nord Stream 2 AG. Both companies are majority owned by the Russian natural gas giant Gazprom. Initially, they only registered a drastic fall in pipeline pressure, but technicians were immediately concerned that something might by wrong, as were military representatives in the region. On the morning of September 27, a Danish F-16 fighter discovered strange bubbles on the surface of the water, and the Danish military published the first images that afternoon: Natural gas rising up from the bottom of the Baltic had formed circles of bubbles up to 1,000 meters across on the water's surface not far from Bornholm.

An upwelling of gas from the Nord Sea pipeline after the explosions

It's not yet possible to say with complete certainty how the perpetrators went about their business. But the findings of the international investigation make it possible to reconstruct much of what took place. Data from geological monitoring stations, videos and sonar data from the seafloor provide additional clues. That data comes from a Swedish camera team and from Greenpeace, both of which launched their own surveys using underwater devices. For experts, the publicly available information paint a largely consistent picture, according to which the group of saboteurs was likely made up of six people – five men and a woman. Likely a captain, divers, dive assistants and perhaps a doctor.

According to former military and professional divers, the operation would have been possible, though challenging, with such a team. "It's pitch black down there, cold, and there are currents," says Tom Kürten. As a technical diver and expedition leader, he has been inspecting wrecks on the bottom of the Baltic Sea for many years. With the correct equipment, it is possible to dive to depths of 100 meters or more, and he believes it would be impossible to locate the pipelines without technical assistance. Indeed, with a small DownScan, a sonar device, it would be relatively simple, he says. And once the spot has been identified, all you have to do, he says, is throw a "shot line" overboard, a rope with a weight on the end that guides the divers into the depths.

For challenging dives, Kürten also uses a rebreather, which recycles exhaled air and replenishes it with oxygen for the next breath. The advantage is that no tanks are needed, and such devices also produce fewer bubbles, which can be helpful if you are seeking to avoid unwanted attention. Still, such an operation takes time. For 20 minutes spent working at a depth of 80 meters, a total of three hours of dive time is necessary, Kürten estimates. During the ascent, decompression stops are vital so that the body can adjust from the high pressure on the seafloor to the lower pressure at the surface. It's a rather complex undertaking, but certainly possible during a long trip.

Later, when German investigators undertook a closer examination of the detonation sites, specialists from the maritime division of the German special forces unit GSG 9 dived down to take a look.

However you look at it, the operation could not have been performed by amateur divers – nor by hobby sailors. When the team of reporters in the Andromeda arrived at the site above where the explosions took place, a force 5 or 6 wind was blowing, it was raining, and the swells were significant. Standard Baltic Sea weather, in other words – in which it is difficult to keep a sailboat in one spot. According to weather data, mid-September 2022 was similar for several days, though it was calmer both before and afterward.

Explosives expert Fritz Pfeiffer produced an expert opinion for Greenpeace regarding the potential destructive power of the detonations, since the environmental group was interested in knowing how much damage had really been done to the pipeline and what that might mean for the environment.

On underwater images of Nord Stream 1, Pfeiffer identified craters that he believes were created by large amounts of explosives detonating next to the pipeline. Investigators, though, think that a total of less than 100 kilograms of explosives were used and that the sudden release of the highly pressurized natural gas caused much of the damage.

Not far from the long stretches of destroyed pipes belonging to Nord Stream 1, the A pipe of Nord Stream 2 was attacked a second time – the same line that had already been severed 17 hours earlier further to the south. The pipe tore open along a length of approximately 100 meters. A so-called "cutter charge" was likely used, directly over a welded joint. Pfeiffer believes that just eight to 12 kilograms of octogen would have been necessary for such a detonation.

The B pipe of Nord Stream 2, meanwhile, wasn't harmed at all – and could easily be put into use even today. But why did the perpetrators leave one of the four pipes undamaged? There are some indications that the saboteurs confused the A and B pipes of Nord Stream 2 in the darkness and unintentionally attacked the same pipe twice.

Whatever the case, experts seem to agree on one salient fact: specialized submarines or remote-controlled submersibles were not necessary for the operation. But there are several questions to which no answer has yet been found. How were the bombs detonated? Why did so much time pass between the first explosion and the three that followed? Some experts believe that they might have had difficulties in activating the explosives – either via a delayed detonator or a remote detonator.

Perhaps the attack could have been prevented in the first place. It didn't come as a complete surprise, after all. It had been announced several months beforehand, in detail. But the warning wasn't taken seriously enough in the right places.

An encrypted, strictly confidential dispatch from an allied intelligence agency was received by the Bundesnachrichtendienst (BND – Germany's foreign intelligence agency) in June 2022. Such dispatches are hardly an anomaly, but this one contained a clear warning. It was from the Netherlands' military intelligence agency, which goes by the initials MIVD and is well known for its expertise in Russian cyberwarfare techniques. On this occasion, though, the agency's alarming information seemed to have come from a human asset in Kyiv.

The Dutch also informed the CIA – which, just to be on the safe side, also forwarded it onward to the Germans.

The confidential dispatch sketched out an attack on the Nord Stream pipelines. The plan called for six commando soldiers from the Ukraine, concealed with fake identities, to charter a boat, dive down to the bottom of the Baltic Sea with specialized equipment and blow up the pipes. According to the information, the men were under the command of Ukrainian Commander-in-Chief Valerii Zaluzhnyi, but President Volodymyr Zelenskyy had apparently not been informed of the plan. The attack was apparently planned to take place during the NATO exercise Baltops on the Baltic Sea. The content of the secret dispatch was originally reported on by the Washington Post in early June.

Ukrainian President Volodymyr Zelenskyy (left) and Armed Forces Commander-in-Chief Valerii Zaluzhnyi (right)

The BND forwarded the warning to the Chancellery, but at German government headquarters, it was deemed irrelevant. After all, it only arrived at the Chancellery after the NATO maneuver had come to an end, and nothing had happened. That is why nobody sounded the alarm, says one of the few people who learned of the warning when it arrived. Most German security officials believed the information contained in the dispatch was inaccurate.

As a result, no protective measures were introduced, no further investigations were undertaken and no preparations were made to potentially prevent an attack at a later point in time. The Federal Police, the German Navy and the antiterrorism centers never even learned of the warning.

Nor did the German agency responsible for the oversight of Nord Stream.

In the early morning hours of September 26, Klaus Müller, president of the Federal Network Agency, received a telephone call. His agency is responsible for regulating Germany's electricity and natural gas grids. Christoph von dem Bussche, head of the company Cascade, which operates 3,200 kilometers of Germany's natural gas pipelines, was on the other end of the line. According to sources in Berlin, Bussche told Müller that one of the Nord Stream pipelines had just experienced an inexplicable loss of pressure.

The head of the Federal Network Agency must have immediately realized how important that phone call was. He called German Economy Minister Robert Habeck.

Habeck, who is also the vice chancellor, was the first cabinet member to learn of the attack on the pipelines. Sources indicate that he was just as surprised as Müller had been. Neither of them had apparently known about the warning that had been received three months before.

It had also apparently not been discussed in the German Security Cabinet, the smaller group of ministers that has been meeting regularly in the Chancellery since the Russian invasion of Ukraine. Müller, though, is the first person who should have been informed of increased risks posed to the pipeline: He is in charge of ensuring the smooth operation of Germany's numerous pipelines, and of protecting them if need be.

The U.S., by contrast, apparently sprang into action in summer 2022, even if the Americans didn't initially trust the Netherlands' source. Washington carefully approached Kyiv with a clear message: Don't do it! Abort the operation! The German weekly newspaper Die Zeit and public broadcaster ARD were the first to report on Washington's warning to Kyiv. But the message from the American's apparently wasn't taken seriously. Perhaps Washington lacked a certain amount of credibility, particularly given how clear they had made it in the past that they were deeply opposed to the gas pipelines connecting Germany and Russia.

Was there perhaps even more information that wasn't passed along? Did the well-informed Dutch military intelligence agents know even more than they shared, such as who was to be on board the ship and perhaps even from which Ukrainian unit they came from? If so, that information is no longer available. Leaving the German investigators to assemble the puzzle pieces on their own.

One lead stems from the falsified passport of Ştefan Marcu. And from the man whose photo is apparently on that document: Valeri K.

Back in June, Lars Otte, the federal prosecutor, told members of the Internal Affairs Committee at the Bundestag that investigators had been able to "almost certainly identify a person who may have taken part in the operation."

The lead takes us to a large city in central Ukraine, to an abominable Soviet-era prefab residential building on the outskirts of Dnipro. The structure has eight, not entirely rosy-smelling entrances, a bar and a minimarket called Stella on the ground floor.

On the third floor of the first entrance is an apartment that is registered to the father of Valeri K. He, too, is called Valeri – and both are members of the military, say neighbors.

Nobody opens the door, despite extended knocking. Instead, the neighbors peek out, an elderly married couple. They say that the Valeris actually live in the building next door and that they only rent out this apartment. The younger Valeri K.'s grandmother, the couple says, used to work at Stella, and suggested dropping by there.

It's stuffy inside the store, and smells of dried fish. The saleswoman says that the grandmother is now the janitor of the neighboring building. Five minutes later, Lyubov K. sets aside her broom and sits down on a bench. She's a small woman with red-dyed hair and speaks Russian. She says she doesn't want to speak with the press, but remains seated on the bench. When asked if her grandson Valeri is in the army, she says "yes." What does he do there? "I don't know." She does say, though, that her son and grandson had only been called up a few months before. The conversation remains brief, ending with the grandmother claiming that her grandson couldn't have been onboard the Andromeda because he doesn't have a passport and is unable to travel overseas.

Another neighbor, a retiree with gray curls and wearing a blue shirt, is more talkative. Her son, she says, went to school with Valeri senior and they also worked together. The two of them had taken a job at a shipyard in Turkey several years before.

Then, the neighbor says, Valeri senior embarked on a completely different career path, smuggling migrants across the Mediterranean on a sailboat. But the operation was busted and the Ukrainians involved arrested. The neighbor says that the younger Valeri K. wasn't involved though.

The neighbors don't have much to say about him. His presence on social media is also limited, apparently limited to VK, a Facebook clone that is popular in Ukraine and Russia.

The most striking thing about the younger Valeri K. is that he is a follower of the openly nationalist youth organization VGO Sokil. It offers young men training in shooting and diving.

His most recent active VK profile is under the name "Chechen from Dnipro," and it is linked to a telephone number. If you enter the number into an App like Getcontact, you can see the names under which the number is saved in other people's contact lists. Among the names for Valeri's number is: "K. 93rd Brigade."

There are also leads to his long-time girlfriend Inna H. The two apparently aren't together any longer, but they have a son together. The mother and child no longer live in Dnipro, but in the German city Frankfurt an der Oder.

They live in a gray housing block just a few hundred meters from the Polish border. There are a number of Ukrainian refugees living in the building, including several relatives of Valeri K.: Inna H., the ex-girlfriend who is the mother of his son, his younger sister Anya K. and apparently also his maternal grandmother Tetyana H.

In May, they received a visit from the police, who searched the apartment. A DNA sample from Valeri K.'s son was then compared with traces found on the Andromeda . But there was no match.

Inna H. lives on one of the upper floors of the apartment block, but the door is opened by an elderly lady when a team of reporters from DER SPIEGEL rings the doorbell. She doesn't give her name, but she looks like the grandmother, Tetjana H., in photos. She doesn't want to talk to journalists.

If people have something to say, she says, they should discuss it with the authorities.

Asked about the accusations against Valeri K., she says only: "We are a simple family, the Germans saved us. Why would we want to do them any harm?"

Officially, politicians and the Office of the Federal Prosecutor are still holding back with any conclusions. Currently, it is not possible to say "this was state-controlled by Ukraine," Federal Prosecutor Otte says. "As far as that is concerned, the investigation is ongoing, much of it still undercover."

Behind the scenes, though, you get clearer statements. Investigators from the BKA, the Federal Police and the Office of the Federal Prosecutor have few remaining doubts that a Ukrainian commando was responsible for blowing up the pipelines. A striking number of clues point to Ukraine, they say. They start with Valeri K., IP addresses of mails and phone calls, location data and numerous other, even clearer clues that have been kept secret so far. One top official says that far more is known than has been stated publicly. According to DER SPIEGEL's sources, investigators are certain that the saboteurs were in Ukraine before and after the attack. Indeed, the overall picture formed by the puzzles pieces of technical information has grown quite clear.

And the possible motives also seem clear to international security circles: The aim, they says, was to deprive Moscow of an important source of revenue for financing the war against Ukraine. And at the same time to deprive Putin once and for all of his most important instrument of blackmail against the German government.

But crucial questions remain unanswered. From how high up was the attack ordered and who knew about it? Was it an intelligence operation that the political leadership in Kyiv learned about only later? Or was it the product of a commando unit acting on its own? Or was it a military operation in which the Ukrainian General Staff was involved? Intelligence experts and security policy experts, however, consider it unlikely that Ukrainian President Zelenskyy was in on it: In cases of sabotage, the political leadership is often deliberately kept in the dark so that they can plausibly deny any knowledge later on. In early June, when the first indications of Kyiv's possible involvement came to light, Zelenskyy strongly denied it. "I am president and I give orders accordingly," he said. "Nothing of the sort has been done by Ukraine. I would never act in such a manner."

In any case, it is difficult terrain for the BKA, not only politically, but also in practical terms. The German criminal investigators cannot conduct investigations in Ukraine, and it isn't expected that Kyiv will provide much support. The German authorities have also shied away from submitting a request to Ukraine for legal assistance because doing so would require that they reveal what they know. That could provide Ukraine the opportunity to cover up any traces that may exist and to protect the people responsible. Asked whether there will be arrest warrants one day, an official familiar with the events replies: "We need a lot of patience."

Senior German government official

A Ukrainian commando carried out an attack on Germany's critical infrastructure? Officials at the Chancellery in Berlin have been discussing intensively for months how to deal with the sensitive findings of the investigation. Chancellor Olaf Scholz has also been debating possible consequences with his closest advisers. Of course, there aren't many options available to them. A change of course in foreign policy or the idea of confronting Kyiv with the findings seems unthinkable.

The situation changed in March, when the New York Times , Germany's Die Zeit and Berlin-based public broadcaster RBB first reported on the evidence pointing to Ukraine. A little bit later, the Süddeutsche Zeitung newspaper also published its own investigative report. Soon after, Jens Plötner, an adviser to the chancellor, openly addressed the articles in a phone call with Andriy Yermak, one of President Vlodymyr Zelenskyy's closest confidants. The answer was clear: Yermak apparently assured the Germans that the Ukrainian government had not been involved in the plot and that no one from the security apparatus knew who was behind it.

Few in Berlin want to think right now about what action should be taken if the involvement of Ukrainian state agencies is proven. On the one hand, Germany couldn't simply brush off such a serious crime. But suspending support for Ukraine in its war against Russia also wouldn't be an option. "Everyone is shying away from the question of consequences," says one member of parliament with a party that is a member of the German government coalition.

The fact that politicians who normally might at least speak off the record are remaining silent and simply ignoring inquiries is an indicator of just how delicate the situation is. Inquiries about the situation regarding the attack on the Nord Stream pipeline - in ministries, at party headquarters and in parliamentary offices - as to how it is being discussed within the parties or whether the government is already thinking through scenarios for the eventuality that the Ukrainian leadership knew about the operation, go nowhere.

"No," says Irene Mihalic, the first parliamentary secretary of the Green Party, there was almost no discussion about the issue before the summer legislative recess. She says her party will wait for the outcome of the investigations, and that anything else would be pure speculation.

In fact, the information available to members of parliament in this case is also extremely thin. On the one hand, the federal public prosecutor naturally provides only scant information about ongoing investigations. More importantly, the federal government is keeping all the findings under wraps. Even most members of Scholz's cabinet as well as the deputies in the Parliamentary Control Committee, which is tasked with oversight of the work of the intelligence services, don't know much more than what is publicly reported about the attack.

German Chancellor Olaf Scholz (left) with Chancellery head Wolfgang Schmidt

The gatekeeper for information flows sits on the seventh floor of the Chancellery, diagonally opposite Olaf Scholz. Wolfgang Schmidt, the chancellor's closest confidant and head of the Chancellery, maintains intensive contact with the investigators. He is also briefed each week by the intelligence services and is happy to pick up the phone to make inquiries of his own. When asked, Schmidt says he doesn't want to comment on the Nord Stream case.

Sources within the investigation say they have been amazed by the level of interest the Chancellery head has shown in the progress of the proceedings. And at the same time, how little Berlin seems to care about shedding light on this unprecedented attack on the backbone of Germany's energy supply as quickly as possible.

The BKA has three main offices. One is in Wiesbaden, where investigators deal with organized crime, narcotics offenses, targeted searches and such things. Another, in Berlin, provides headquarters for its experts on issues including Islamist terrorism. And then there's the one in Meckenheim near Bonn, in a gray 1970s, box-like building surrounded by orchards and fields, with red-tiled hallways inside. This is the place where one of the most sensational crimes in German criminal history is to be solved, and it looks like some random rural school.

This is where the BKA's State Protection Department is housed, where the investigators tasked with solving politically motivated crimes work: offenses like attacks, assassinations, espionage and sabotage. In the past, the office investigated the Red Army Faction, domestic left-wing radicals who perpetrated numerous terror attacks in Germany in the 1970s. And the National Socialist Underground, a neo-Nazi cell that killed immigrants, mostly of Turkish descent, across Germany in the early 2000s. More recently, they have been focused on the Reichsbürger movement of militant protesters who deny postwar Germany's right to exists. Now it has the Nord Stream saboteurs in its crosshairs.

The BKA's offices in Meckenheim near Bonn in North Rhine-Westphalia

The responsible department is ST 24: State Terrorism. One might assume that dozens of criminologists are working here around the clock researching, searching, and following up on every little lead.

For a time, hundreds of BKA agents were investigating the right-wing extremist madmen around Heinrich XIII Prince Reuss, who had been planning an absurd coup attempt to topple the German government. But only a handful of investigators at most have been assigned to work on the Nord Stream case on a full-time basis.

Sources in Berlin say that a small, dedicated group of skilled investigators should be sufficient. Directing more staff wouldn't be of much use anyway, they argue, since there are no large groups to observe and they aren't allowed to conduct investigations in other countries. And if necessary, more BKA people could also be called in addition to support from the Federal Police.

But the perception among investigators is that the will to solve the case is not particularly pronounced in the capital. Politically, it is easier to live with what happened if it remains unclear who is behind the attacks. The process is not being hindered, but neither is there much support from the overarching government ministries. Meanwhile, it is clear to career-oriented ministry officials that there is no glory to be had with this case. If only because the culprits will likely never have to answer for their actions in Germany. Even if they could be identified, it's very unlikely they would be extradited.

So Berlin is looking away, and that is definitely being registered in agencies where staff is constantly in short supply and procedures have to be prioritized. All of which leads to the investigation falling down the priority list.

Regardless, the BKA unit is led by a chief inspector, an experienced veteran in his mid-50s who is considered a shrewd criminologist by his colleagues.

The German investigators frequently exchange information with officials in Sweden and Poland, and traveled to Warsaw and Stockholm in the spring. However, no agreement has been reached on forming a joint procedure, called a Joined Investigation Team in legal vernacular. Ostensibly because the intelligence agencies involved don't want to be constantly sharing their information internationally.

Still, sources in all three countries involved say there is tight coordination. Swedish Nord Stream experts are acting more assertively than the Germans, and it is possible charges could be filed before the end of the year. Mats Ljungqvist, the Swedish prosecutor responsible for the investigation there, recently told Radio Sweden that he believes they may be approaching the final phase of the case.

International investigators and agents also say that all the intelligence has been pointing in one direction: towards Kyiv. At least those who are familiar with the evidence and clues.

In the rest of the world, however, alternative scenarios are still circulating – some spurred by half-baked intelligence, some by amateur military experts and others driven more by domestic political or geostrategic interests.

The American journalist Seymour Hersh, 86, caused quite a stir, for example, when he accused the U.S. of committing the attacks. He claimed that a Norwegian naval vessel had secretly transported American combat divers into the Baltic Sea. The alleged motive: To make sure Russia would no longer be in a position to blackmail Germany with gas supplies. But Hersh didn't provide any evidence to back up his theory and essential parts of his article later turned out to be false. Hersh justified his reporting by saying that the information had been supplied to him by a source in Washington. The Russian government, though, was delighted and vaunted the baseless story as proof that the U.S. was the real warmonger.

Still others claim that such theories are extremely convenient for the Russians because they distract from the fact that they themselves are the perpetrators. As evidence of this, Russian ship movements in the Baltic Sea, reconstructed by journalists from the public broadcasters of Denmark (DR), Sweden (SVT), Finland (Yle) and Norway (NRK), are frequently cited.

On the night of September 21-22, for example, the Danish Navy encountered a conspicuous number of Russian ships east of Bornholm in exactly the area of the later blasts. The automatic identification systems on the boats had been turned off and they were traveling as unidentifiable "dark ships."

The 86-meter-long Sibiryakov , a hydrographic research vessel equipped for underwater operations, was also in the area. According to experts, it often accompanies Russian submarines on their secret test dives in the Baltic Sea. Some micro-submarines also have grabber arms that can be used to perform underwater work. Tasks like placing explosive charges.

But why would the Russians blow up their own pipeline? Especially given that they could simply block it at the push of a button? Why deprive yourself of a lever that still might be useful - at least a few years down the road – to resume blackmailing a Germany that is starving for cheap energy?

It's possible to find reasons, but they are all rather convoluted. One theory holds that Moscow wanted to save itself billions in damages after it violated its own contracts by cutting off promised Nord Stream gas supplies to Germany. If, on the other hand, the pipeline had been blown up by unknown persons, it would be considered a force majeure.

The next theory, somewhat more widespread even among Berlin politicians, goes like this: Russia destroyed the pipelines with the aim of later blaming it on the Ukrainians in a way that could undermine Western support for Kyiv. The Andromeda and all other evidence pointing to Ukraine was planted by Russian agents, they say, to throw the Europeans off the scent.

The theory that it was a "false flag" operation performed by the Russians is considered probable by Roderich Kiesewetter, the security and defense policy point man for the center-right Christian Democrats in the Bundestag. Kiesewetter says it would totally fit with Russia's style to pull off an operation like that perfectly and make it look like the trail leads to Kyiv.

Public prosecutor Lars Otte

Conversely, many other intelligence experts consider it highly improbable that Russian agents, who have show a predilection in recent years of more rustic methods - such as brazen and easily exposed political assassinations - could execute such a complex deception maneuver flawlessly.

German Federal Prosecutor Otte emphasized to the Bundestag's Internal Affairs Committee that they were definitely considering the "working hypothesis" that "state-directed perpetrators from Russia" could be responsible. "Of course, we're following up on those leads as well," Otte said. "But we don't have any evidence or confirmation of that so far."

Agents tend to believe there is a different, more straightforward explanation for the Russian Navy's clear presence in the Baltic last late summer: They suspect that Moscow, like the Dutch and the CIA, was not unaware of the plans to attack Nord Stream, and that the ships were there to patrol along the pipeline to protect it from the expected sabotage.

Particularly given that Ukraine apparently had plans to attack another Russian gas pipeline. Sources within the international security scene say that a sabotage squad had plans to attack and destroy the Turkstream pipelines running from Russia through the Black Sea to Turkey. A corresponding tip-off had also reached the German government together with the first warnings of an attack on the Nord Stream pipelines

It is unclear why there was no follow-up on the suspected plot to attack Turkstream.

One man who should be in a position to know could be found standing in the ballroom of the British Embassy in Prague on a hot July morning. Sir Richard Moore, the head of Britain's MI6 intelligence service, had arrived to discuss the global situation with selected intelligence colleagues and diplomats.

Moore is probably one of the best-informed men in the world. If anyone can gain access to all the available data about what happened in the run-up to the explosions under the Baltic Sea, it's the man with the gray crew cut and narrow reading glasses. DER SPIEGEL was able to ask him a quick question about the Nord Stream attack.

It is one of the few official, and thus mentionable encounters with an intelligence service for this story. Another takes place under similar conditions with CIA head William Burns in the posh American ski resort Aspen in the Rocky Mountains. Each year, the Who's Who of the U.S. security apparatus gathers there for the Aspen Security Forum. Burns was joined by senior U.S. armed forces officials and national security adviser Jake Sullivan.

When they spoke on the record on the subject of Nord Stream, the top intelligence officials were monosyllabic. Moore said in Prague that he didn't want to interfere in the investigations of Germany, Denmark and Sweden. And in Aspen, when asked about Nord Stream, only security adviser Sullivan responded, and briefly at that. "As you know, there is an ongoing investigation in multiple countries in Europe," Sullivan said coolly. "We'll let that play out, we'll let them lay out the results of the investigation."

The British MI6 chief at least provided a bit of context. He said that we have to be prepared for the fact that underwater attacks are now part of the arsenal of modern warfare. His service therefore informs the British government about its own Achilles' heels, adding that there are quite a few of them. "Seabed warfare," as such underwater operations are called in military jargon, is not just about pipelines for oil and gas. The power lines of offshore wind farms and especially undersea internet cables are also targets – and potentially even easier to destroy since you don't need explosives, just the right tools.

On September 23, three days before the explosive charges went off, the Andromeda returned to its home port in Rostock. The saboteurs, it is assumed, packed their things, handed in the boat key at the Mola Yachting charter base and walked away via Pier G.

It was one of the most amazing twists in this criminal case, at least at first glance. Why not just sink the boat, including the explosive residue and DNA traces?

Reporters from DER SPIEGEL and the public broadcaster ZDF in July 2022 aboard the Andromeda

Presumably because the investigators would have the been on the trail of the commando much sooner than three months later, because it was precisely such anomalies that they initially searched for: things like rented dive boats. Or charter boats that had suddenly disappeared. But the Andromeda remained just one yacht for hire among hundreds, long since back in port when the seabed shook. And the saboteurs had more than enough time to leave the country and cover their tracks.

Nine months later, on a Saturday afternoon in June, German Interior Minister Nancy Faeser (SPD) was standing at the harbor quay in Rostock's Warnemünde district. In the background, the masts swayed in the marina; in the foreground the BP84 Neustadt ship towered over everything, 86 meters long, with a 57 millimeter shipboard gun. The Neustadt is the Federal Police force's newest ship. It's also in part a response to the Nord Stream attack.

German Interior Minister Nancy Faeser with Federal Police head Dieter Romann (left) in front of the vessel Neustadt .

"Increasingly, the lines between internal and external security are becoming blurred, and nowhere is that more conspicuous than here," the interior minister said. She explained that the attack showed how vulnerable we are. "The Baltic Sea has become a geopolitical hotspot."

In the background, the Federal Police Orchestra played the maritime anthem "Save the Sea." It was time for the vessel's christening. Faeser pulled on a rope and a champagne bottle swung toward the Neustadt . The bottle hit the ship's hull with a dull clonk, without breaking. A murmur went through the crowd. Sailors believe it is bad luck if the bottle doesn't break.

Correction: In an earlier version of this story, CIA-Chief William Burns was called "Richard Burns”. We corrected the mistake.

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