Krycek sells information from the DAT tape to the more offering. The French use it to try to salvage the downed UFO in the Pacific but all they return with is Black Oil, trapped there since WWII. It's radioactive and passing from host to host it tries to reach its UFO. Skinner is shot for not obeying the CSM and Scully finds the murderer of her sister, Luis Cardinal. Through Krycek, the Black Oil gives the DAT tape back to CSM and reaches its UFO, stored by CSM in North Dakota.
Krycek causes two attempts to salvage a UFO in the Pacific
Ratboy Krycek succeeded in breaking the digital tape's copy protection and translating the documents. Now he knows as much of the Syndicate's plans and doings as the conspirators themselves, he's becoming 'a player'. He survived in the select milieu of intelligence and governmental secrets by selling the information on the tape and cutting deals to the most offering. Of course he's precautious and in the case of the Piper Maru and the french government, he uses Jerry Kallenchuk as the "middle man" (woman); he never deals directly with the buyer.
From the discussions at the Syndicate's HQ at 46th Street, New York, we can understand that CSM moved a "salvaged UFO" from Washington to North Dakota. All the events of the 2 episodes are about something at the bottom of the Pacific Ocean. In 3X09: Nisei, Mulder witnesses what he believes is a UFO salvaged by the Talapus from the Pacific, in Newport News, Virginia, close to Washington.
The story of the UFO
There were many cover stories for this UFO that were created in 50 years: the Japanese sub or the Russian nuclear sub (Nisei), and now "a B-29 carrying an atomic bomb". But the truth, as we see it in the flashbacks, is that during World War II in the Pacific, a UFO was taken down by the US Air Force; a P-51 Mustang (the one with "Drop Dead Red" tagged on it, referenced JTTO 111470) was among the planes that went down with it ("We'd found the sunken squadron", "downed by American fighter pilots in the second World War"). The Black Oil occupying the craft left it and infected the pilot of the downed plane; it mixed itself with the "diesel oil" of the plane. But it was stuck there since the UFO had sunk.
The submarine Zeus Faber was sent to try and salvage the UFO; this was its secret mission, unknown to its crew -- they were told they were "sent to recover an A-bomb". But as it arrived on the site, the Black Oil entered the sub, mixed with its oil too and wanting to salvage its UFO it took control of the highest ranking officer, Captain Sanford (probably the only person onboard aware of the sub's true mission). The downed UFO leaked radioactivity, which caused the burns on the victims (see also 4X17: Tempus Fugit) -- the Black Oil seems to emit a radioactive flash only when it chooses to. "As the X.O. I urged the captain to return to port but against all reason and good sense, he refused to leave the area.": the Black Oil wanted to complete the secret mission. Mutiny saved Johansen and 7 other officers; the Black Oil lost control of the sub and of the Captain's body and returned "back to the sea".
A fight for knowledge of the Black Oil
UFOs were called "Foo Fighters" during WWII, but it's not until Roswell, 1947, that 'the world' really learnt what they really were. Then the US government started gathering people from many agencies, creating a top secret team that investigated the presence of ETs. People like Bill Mulder and the CSM were among them: Fox's father is not only involved, he's one of the founding members. On August 19, 1953, one of the irradiated officers of the sub, the last one to die because of the cancers created by the UFO's radioactivity, is interviewed by Bill Mulder, CSM and a third man. (It has been discussed that this third man is Deep Throat but there's nothing to support that, it could very well be the First Elder or any other elder for all we know.) 40 years later, the Syndicate still doesn't know what killed the crew
The Black Oil, a black and thick fluid, moves like it's got a purpose, it has intelligence. It seems it is partly alive (the "alien virus" later established in 4X09: Tunguska) and partly made of other organic molecules, hydrocarbons (such as oil). It can cross anything, from plane cockpit glass to submarine hull and waterproof diving suit. It takes control of a person by infecting his brain, and a black film occasionally appears in the eyes of the infected. It exits the body from the facial features (mouth, nose, eyes), leaving back some of its non-essential oil over the body of the previous host. It can emit intense radioactivity that does not harm the body of its host but instantly neutralizes its enemies -- like the invisible entity in 1X09: Fallen Angel. It has access to the knowledge of the host (inside Krycek, it knew where the digital tape was, and how to contact CSM). The Black Oil will turn out to be the main alien antagonist of the show; note that it's not named in these 2 episodes; the fandom later named it the 'Oilien'.
The Piper Maru salvage attempt
When the French got hold of the coordinates of the downed UFO, they send the Piper Maru to salvage it, telling the crew that they're looking for a WWII plane squadron. The Piper Maru left from San Diego, the same port from which the Talapus, the ship that really salvaged the UFO (Nisei) left from; San Diego is the USA's main port giving to the Pacific.
The Black Oil in the pilot of the P-51 Mustang had kept him in stasis for 50 years, waiting for an opportunity to return to the surface; this ability of the Black Oil to extend the host's life in stasis immersed in liquid is seen again in Fight the Future. With the Piper Maru, it finally has an opportunity to return to the surface, and spends its time looking for a way to get back in its craft: from Gauthier and his paperwork (Gauthier himself didn't remember the name of the salvage broker company that dealt with the French) to his wife (infected-Gauthier's behaviour was too strange for the Black Oil to leave her free to report Gauthier to the police now that she had seen him).
CSM had to move the UFO from the highly exposed hangar in Virginia to 'abandoned' silos in North Dakota to ease Krycek's contact with the UFO; and CSM tells the conspirators he moved it for security reasons. This elevated suspicions from the Syndicate elders, but WMM is the only one to discover Krycek's alive and that the digital tape was still at large -- exactly the contrary from what CSM had told them in 3X02: Paper Clip.
Meanwhile, the French also seek the person who's responsible for the death of an entire ship crew. These are the French Secret Services, government officials who have no idea the Syndicate exists. Which doesn't mean that the Syndicate doesn't extend to France: like in the USA, there is a difference between government secrets and Syndicate doings.
Luis Cardinal and Skinner's assassination attempt
The Syndicate wants to have the investigation on the murder of Melissa Scully stopped, and don't find it very difficult to exasperate Scully with the slowness of the police and FBI. Skinner was willing to help Scully and pushed the investigation while his orders from the CSM were clear: to ignore her. This cost him a warning and later an assasination attempt. Scully finds the shooter was "Luis Cardinal, native of Nicaragua, School of the Americas alumni, career mercenary, apparently impressed a lot of people with his marksmanship during the Iran-Contra deal", and appearantly CSM's bodyguard. Note that the black ops team in 2X25: Anasazi were also from the School of the Americas. His arrest would be ruinous for the Syndicate and WMM advises CSM to get Luis Cardinal out of the country. CSM chooses to finish off Skinner instead, having Skinner removed from the hospital and having Cardinal making his hit on the moving ambulance. Scully describes Cardinal as "the man who shot my sister", but the conspirators are the only ones to know the real shooter was Krycek, and Cardinal the second man (the car bomb in Paper Clip aimed at killing Krycek, "Scully's would-be assassin" (CSM)). Cardinal's arrest results in his murder staged as suicide in prison, before any court hearing could be made, and Scully gets only a half-closure. See 3X21: Avatar for more on the elimination of Skinner. On a side note, the driver of Skinner's ambulance is one of the men who warned Skinner earlier in the café, and another of them, the Grey-haired Man, appears again (4X01: Herrenvolk, 4X15: Memento Mori); they both resurface against Skinner in 3X21: Avatar.
Scully: "I'm just constantly amazed by you ... you're working down here in the basement, sifting through files and transmissions that any other agent would just throw away in the garbage."Apocrypha
Mulder: "Well that's why I'm in the basement, Scully."
Mulder: "Looks like the fuselage of a plane."
Scully: "It's a North American P-51 Mustang."
Mulder: "I just got very turned on."
Johansen: "We bury our dead alive, don't we?"
Scully: "I don't know if I understand."
Johansen: "We hear them everyday. They talk to us, they haunt us. They beg us for meaning. Conscience...it's just the voices of the dead, trying to save us from our own damnation."
Zeus Faber Sailor: "That thing... is still down there! The navy will deny it... but you've got to make sure the truth gets out. I can trust you to do that, can't I, Mr. Mulder?"
Young CSM: "You can trust all of us."
Doctor: "...giving rise to the onset of massive and malignant cancers." (and CSM lights his cigarette)
CSM: "Have the bodies destroyed."
Doctor: "But... but sir...these men aren't dead yet!"
CSM: "Isn't that the prognosis?"
(Mulder uses a pencil to reveal writing on the envelope)
Langly: "Your sci-crime guys at the Bureau have a laser there that can measure any change in a surface down to a few nanometers."
Byers: "Actually they can lift a perfect impression using magnetic toner and a sheet of mylar. An electrostatic device is applied to the specimen, and renders the information, by drawing the toner from the indentation to the mylar surface."
Frohike: "Actually --"
Mulder: "Actually, it's a phone number, New York City area code (212), 555 1012. Now don't drop that [pencil], that's a finely calibrated piece of investigative equipment. I gotta make a phone call."
Frohike: "I'll be damned."
Mulder's distrust of the government: "I didn't sign any disarmament treaty."
Scully: "You know I thought...when we found him, this man that killed Melissa, that...that when we brought him to justice, I would feel some kind of closure. But the truth is no court...no punishment is ever enough. [...] I think the dead are speaking to us, Mulder, demanding justice. Maybe that man was right. Maybe we bury the dead alive."