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State Department accused of cozy ties with Keystone XL lobbyist

October 4, 2011 |  3:30 pm

The lobbyist for a Canadian company trying to build a new 1,700-mile oil pipeline across the U.S. got quiet support, including boosterish emails and an invitation to an official Fourth of July celebration, from employees at the U.S. State Department while the agency was deciding whether to approve a permit for the pipeline, some of the nation's top environmental groups alleged Tuesday.

The Trans-Canada Corp. lobbyist, Paul Elliott, is a former top campaign aide for U.S. Secretary of State Hillary Rodham Clinton, and appeared to use his connections inside the department to promote Trans-Canada's bid to build the proposed Keystone XL pipeline, the groups said in a complaint to the White House.

A series of emails released this week as a result of a Freedom of Information Act request filed by Friends of the Earth reveal that Elliott was in regular communication with an employee at the U.S. Embassy in Ottawa who not only extended social invitations but congratulated him when U.S. Sen. Max Baucus (D-Mont.) endorsed the pipeline.

The pipeline, which would carry oil extracted from the tar sands of northern Alberta to refineries along the Texas Gulf Coast, would also take oil from fields in Montana, North Dakota and South Dakota.

"Go Paul! Baucus support holds clout," Marja Verloop, identified as a member of the senior diplomatic staff at the embassy, told Elliott in a September 2010 email.

In distributing the emails this week, conservation leaders said communiques such as these suggest a breach in the State Department's obligation to impartially review Trans-Canada's application for a presidential permit to build the pipeline across the international border. They want the White House to remove the State Department from the decision-making process and ultimately reject the pipeline application.  

"These two sentences can only be read one way: Verloop is literally cheering Elliott on as he works to secure support for the pipeline ... [and] sees herself as being on TransCanada's side ... when the State Department is supposed to be conducting an impartial evaluation," Friends of the Earth said in a summary of the documents it obtained.

"The emails ... are extremely friendly and illustrative of a cozy and complicitous relationship. They are filled with emoticons and contain an invitation to visit Ottawa's 'winter wonderland,' acknowledgment that Elliott obtained his job as a lobbyist 'precisely' because of his connections, and an offer by Verloop to hand-deliver an invitation to Elliott, apparently for the embassy's Fourth of July celebration, the statement said.

The State Department has said there was no unusual relationship between Elliott, who was a deputy campaign director for Clinton during her 2008 presidential race, and employees reviewing Trans-Canada's permit application.

Spokeswoman Victoria Nuland told reporters Tuesday that the State Department met with a variety of interest groups associated with the pipeline application. The department will produce documentation “to show broad engagement with [the] government of Canada, with industry, with NGOs, with the environmental community, with public interest advocates on all sides of this issue,” she said. 

Trans-Canada officials said Elliott was one of many lobbyists working on the Keystone XL project and that he did not engage in any activities that environmental lobbyists do not also pursue.

Company spokesman Terry Cunha said it was "absurd" to think Elliott's work could influence a process in which at least 10 federal agencies are involved, not just the State Department. The department recently finished a round of contentious public hearings along the route of the proposed pipeline and is expected to make a decision on the permit by the end of the year.

"Mr. Elliott was and is simply doing his job -- no laws have been broken.  His role is very similar to the job the over 60 registered D.C. lobbyists for 10 environmental groups perform," Cunha said in an email to The Times.

Elliott himself told Politico this week that Verloop was someone he had "come to know and respect" during his work in government and that he maintained communication with her as a result. "There’s nothing illegal here. There’s no wrongdoing. Supposedly, these emails are supposed to show I was having undue influence on Secretary Clinton. And I don’t know that they’ve established that."

The communications were not limited to those with Verloop.

Another batch of emails released last month suggested that other State Department employees coached Trans-Canada in how to get approval for an environmental impact statement for the project, which conservationists fear could result in damaging oil spills and boost greenhouse gas emissions by promoting production of the carbon-intensive tar sands oil.

A May 2010 email exchange between Elliott and Nora Toiv, a former campaign colleague who had become a special assistant to Clinton's chief of staff, revealed that Trans-Canada's former president and chief executive, Hal Kvisle, had received "insight" from the State Department's former coordinator of international energy affairs, David Goldwyn, "on what he'd like to see by way of on the record comment during this public comment period of this Keystone XL draft environmental impact statement."

"We are working with our stakeholders, shippers and vendors to deliver on the insight David shared with us and to do so by the June 15 deadline," Elliott told Toiv.

Goldwyn subsequently left the State Department and went to work as an energy consultant, and in that role testified before Congress on behalf of the Keystone XL project, Friends of the Earth alleged in its report on the emails.

"Tell me how it is that someone can go from being on Hillary Clinton's staff to working for a foreign corporation directly lobbying her," Rebecca Tarbotton, executive director of the Rainforest Action Network, one of 17 groups that sent the letter of complaint to President Obama, said in a conference call with reporters Tuesday.

"What we've seen throughout this public process is a pattern of manipulation, distortion and the kind of crony capitalism that we grew to expect from [former President George] Bush and [former Vice President Dick] Cheney, but not from this administration. We'd hoped for something different," said the Sierra Club's executive director, Michael Brune.

Also included in the newly released emails are discussions of Trans-Canada's decision to abandon its controversial application for a waiver to run oil through the pipeline at pressures higher than those now used on oil pipelines in the U.S., resulting in a lower margin of safety.

Facing staunch opposition from conservationists, the company abandoned its application, but the new emails reveal that State Department employees were made aware of Trans-Canada's intention to reapply for the higher-pressure permit later.

"I take it that withdrawing the request does not preclude [Trans-Canada Pipelines] from resubmitting in the future?" Verloop wrote in July 2010. Elliott said that she was "correct," but that any new application would include an environmental assessment.

Cunha told The Times in a January interview that the company was leaving the door open to apply later for permission to operate the pipeline at 80% of the pressure it is designed for, as the company does in Canada, rather than the 72% it has agreed to operate under, at least initially, in the U.S.

"The 0.8 level is something that's been accepted in Canada for the past many years," he said in that interview. "Right now, we've decided to remove the special permit request just to focus on ensuring that all our partners are comfortable with our operations, and perhaps at a later time we'll revisit the application to apply for a special permit."


Proposed Keystone XL project draws a divisive line

Plan to pipe in tar sands oil angers Texas landowners 

Environmental study by State Department removes barrier to pipeline

-- Kim Murphy in Seattle

Photo: Protesters opposing the Keystone XL pipeline carry a mock pipeline in front of Pershing Auditorium in Lincoln, Neb., Tuesday, Sept. 27, before a public hearing began inside. Credit: Nati Harnik / Associated Press