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TransCanada pipeline foes allege bias in U.S. emails


A State Department official provided Fourth of July picnic invitations, subtle coaching and cheerleading, and inside information about Secretary Hillary Rodham Clinton’s meetings to a Washington lobbyist for a Canadian company seeking permission from the department to build a controversial pipeline that would carry crude from the oil sands of Canada to the Gulf of Mexico.

Emails released Monday in response to a Freedom of Information Act request filed by the environmental group Friends of the Earth paint a picture of a sometimes warm and collaborative relationship between the lobbyist for the pipeline company, TransCanada, and officials in the State Department, the agency responsible for evaluating and approving the billion-dollar project.

The written exchanges provide a rare glimpse into how Washington works and the access familiarity can bring. The 200 pages are the second batch of documents and emails released so far.

They also offer insight into the company’s strategy, not revealed publicly before. TransCanada lobbyists exchanged emails with State Department officials in July about their intention to drop their request to operate the Keystone XL pipeline at higher pressures than normally allowed in the United States to win political support, but then suggested they would reapply for the exception once the project had been cleared.

"You see officials who see it as their business not to be an oversight agency but as a facilitator of TransCanada’s plans," said Damon Moglen, the director of climate and energy projects for Friends of the Earth.

While the emails refer to multiple meetings between TransCanada officials and assistant secretaries of state, he said, such access was denied to environmentalists seeking input, who only had one group meeting at that level.

Environmental groups argue that the pipeline, which could carry 700,000 barrels a day, would result in unacceptably high emissions and disrupt pristine ecosystems.

Wendy Nassmacher, a State Department spokeswoman, disputed that the emails showed a pro-pipeline bias. "We are committed to a fair, transparent and thorough process," she said in an email. "Throughout the process we have been in communication with industry as well as environmental groups, both in the United States and in Canada."

TransCanada’s chief Washington lobbyist is Paul Elliott, a top official in Clinton’s failed 2008 presidential campaign. All of the documents involve correspondence between him and government officials.

"What differentiates this case is the potential for conflict of interest. That really raises eyebrows," said Jake Wiens, an investigator with the Project on Government Oversight in Washington.

Many of the emails released Monday are between Elliott and Marja Verloop, the counselor for energy and environment at the United States Embassy in Ottawa.

On Sept. 10, 2010, in response to an email from Elliott announcing that Sen. Max Baucus of Montana was supporting the pipeline, Verloop wrote, "Go Paul!"

In an email to David Jacobson, the United States ambassador to Canada, she described TransCanada as "comfortable and on board" with some developments in the review process.

In a fragmented exchange, Verloop wondered whether TransCanada could reapply to use higher pipeline pressures in the future, to which Elliott replied, "You are correct."

Such a request after the pipeline permitting by the State Department would require approval only by the Pipeline and Hazardous Materials Safety Administration, a small federal agency, effectively bypassing broader political scrutiny.

Shawn Howard, a spokesman for TransCanada, said Elliott lobbied the State Department officials as did lobbyists for many environmental groups. "Mr. Elliott was and is simply doing his job," Howard said. "No laws have been broken."

The State Department is tasked with permitting, according to the "national interest," pipelines that cross national borders and is weighing the environmental impact of Keystone XL against the benefit of expanding the fuel supply for the United States. Its third and final environmental impact statement, released in late August, said the pipeline would have "limited adverse environmental impacts" if operated according to regulations.

The Environmental Protection Agency, which may offer comments on such pipelines but is not empowered to rule on their authorization, sharply criticized the State Department’s previous environmental assessments as inadequate but has not yet weighed in on the August report.

While the pipeline would help ensure a stable fuel supply from a friendly neighbor, environmental groups oppose it because much of the crude would be extracted from subterranean oil sands in a process that they say results in heavy emissions and destroys the overlying forests. In addition, the pipeline would go through the Ogallala Aquifer, one of Great Plains’ principal water sources, where a spill could prove disastrous.

Some of the emails have a cozy tone of familiarity while others reveal a sometimes tense and conflicted relationship. Officials in Washington repeatedly rejected and parried requests for meetings with TransCanada executives even while trying to please Canada, a close ally; Keystone XL has the strong support of the Canadian government and would provide a lucrative new outlet for Canadian oil.

This year, for example, State Department officials struggled with how to respond to Elliott’s request for a second meeting with Jose W. Fernandez, assistant secretary for economic, energy and business affairs.

"I definitely think that Fernandez should NOT meet with TransCanada folks at this point," one email said. Another chimed in: "It would be unusual for an Assistant Secretary to meet twice with the same company in such a short time, and we wouldn’t be sending a message that we’re unwilling to meet since others of us will be meeting with them." Environmental groups have long argued that Elliott’s lobbying of the State Department is a serious conflict of interest since he served as Clinton’s deputy national campaign director and chief of delegate selection in 2008.

State Department staff members were aware of the issue, seeking guidance on how to deal with it from Philip J. Crowley, who was Clinton’s press secretary.

The department has said the decision about whether to permit the pipeline "is not and will not be influenced by prior relationships that current government officials have had."

A final decision on the pipeline is expected by the end of the year.

In the first cache of emails, State Department officials seem at times to advise TransCanada officials on how to maximize their chances for pipeline approval.

That tone continued on Dec. 14, when Verloop sent Elliott a copy of an article raising questions about his conflicts of interest with information about Clinton’s trip to Canada for a meeting of North American Foreign Ministers, noting: "Oversaw S’s trip to Ottawa yesterday for the trilat. KXL not raised, but Doer flew back on the plane with her." Gary Doer is Canada’s ambassador to the United States.

Elliot responded by saying the coverage made him ill.

Verloop replied: "Sorry for the stomach pains but at the end of the day it’s precisely because you have connections that you’re sought after and hired." For emphasis, she added a frowning emoticon.

With a judge now checking to make sure the State Department complies with Friends of the Earth’s document requests, Moglen anticipates more emails will be released.


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