Documents reveal smoking gun regarding State Department bias

Friends of the Earth and allies have obtained internal emails from the State Department that provide definitive evidence of bias and complicity in the department’s review of the proposed Keystone XL tar sands oil pipeline.

The emails are a key part of a growing influence scandal in which the review has become corrupted by bias, lobbyist influence and conflicts of interest.

Thus far, we have received two rounds of documents from the State Department in response to a Freedom of Information Act request that was filed last year. The first round of documents provide evidence of illegal lobbying, an oily revolving door and State Department employees providing improper coaching to pipeline firm TransCanada. The second round of documents show the existence of pro-pipeline bias and complicity at the State Department — including one “smoking gun” email in which State Department employee Marja Verloop literally cheers “Go Paul!” for pipeline lobbyist Paul Elliott after he announces TransCanada has secured Senator Max Baucus’ support for the pipeline.

The most interesting emails in this second tranche are between Elliott and Verloop, a member of the senior diplomatic staff at the U.S. Embassy in Ottawa, with responsibility for energy and environment issues. In one back and forth, Elliott and Verloop discuss TransCanada’s July 2010 decision to abandon its efforts to obtain special permission to pump oil through the Keystone XL at higher-than-usual pressures. The same exchange contains a reference to reassurances from the State side that the 90-day review would “delay…State’s recommendation of a presidential permit but such a delay won’t be as long as the one advocated for by the EPA.”

The exchange indicates an understanding between the State Department and TransCanada that TransCanada would be in a position to apply for a pressure increase after getting the permit. The tacit understanding on the permit and NID timing was even relayed by Verloop to her boss, U.S. Ambassador to Canada David Jacobson, in an email where she says to him: “TransCanada is comfortable and on board.” The revelation of the understanding between State and TransCanada on the pipeline pressure issue could be unwelcome to Senator Jon Tester, who announced his support for the pipeline only after he was reassured by TransCanada’s decision to lower the pressure.

The emails between Verloop and Elliott 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 a Verloop to hand-deliver an invitation to Elliott. The emails also indicate that Elliott succeeded in securing multiple meetings between TransCanada and high-level officials at the State Department.

It is important to remember that these documents are not appearing in a vacuum. Rather, they enter a context in which grave concerns about State Department bias already exist. The new emails are particularly damning given Secretary Clinton’s comment last fall that she was “inclined” to approve the pipeline as well as the existence of a Wikileaked document indicating State Department officials “alleviated” Canadian officials’ concerns and provided them with “messaging” advice. We must also remember that the firm hired by the State Department to run the environmental impact statement process as well as this and next week’s hearings – Cardno Entrix – recently listed TransCanada as one of its “major clients.” And of course there are the indications of coaching and provision of inside information to TransCanada that appeared in the first batch of documents we obtained via our FOIA request.

Additional indication of bias is provided by the lopsided contents of the various environmental impact statements that have been produced by the State Department. These documents tend to repeat TransCanada talking points while downplaying input from independent experts. One example: the “final” environmental impact statement released by State in August included an appendix written by TransCanada employees who were not identified as such. The appendix was a response to a report by John Stansbury, Ph.D., about what the worst Keystone XL spills could look like. Of course, while the TransCanada-authored response to Stansbury was included in the FEIS, Stansbury’s report itself was not.

We have now received documents from four State Department offices. We expect more documents from other offices to be forthcoming, but it is already clear that there is a preponderance of evidence indicating the existence of pro-pipeline bias and complicity at the State Department. It is equally clear that cozy relationships with lobbyist Paul Elliott, who was acting on behalf of TransCanada as an illegally unregistered lobbyist for more than a year, represented a serious and unacceptable conflict of interest. As a result, it is our view that the State Department no longer has credibility on the Keystone XL question, and that the State Department simply cannot be trusted to make a national interest determination that actually aligns with what is in the public interest. If President Obama remains true to his campaign promise that his election would mean an end to the days of lobbyists setting the agenda in Washington, he has no choice but to rescind the executive order delegating to the State Department the authority to sign a presidential permit for this pipeline. If the pipeline decision is made in the White House, rather than at the biased State Department, and if President Obama undertakes a fair and impartial analysis of the evidence, we believe he will reject this pipeline.

Excerpts from the emails from this second tranche that provide the most cause for concern follow.

EXCERPTS FROM SECOND TRANCHE OF DOCUMENTS

(An overview of the contents of the first tranche can be found here.)

July 26, 2010, 2:31 p.m. – document 09 – Verloop asks Elliott for intel and tells him an EPA news release caused chaos at State

After Paul Elliott forwards a letter to a BCC list, Marja Verloop replies directly to him, saying she’s been on vacation, and that it was “Good to see you on the 4th.” Verloop asks, “What are you hearing on your end?” She then notes the “ internal chaos created by [an] EPA press release 🙂 ”

Presumably Verloop was referring to the EPA’s response to the State Department’s draft environmental impact statement for the Keystone XL. On July 16, 2010, the EPA gave State’s analysis a failing grade of “Category 3-Inadequate.”

July 26, 2010, 2:52 p.m. – document 09 – Elliott replies with lots of information, including news that pressure in pipeline will be reduced

Elliott replies. After telling Verloop “It was great seeing you” on the 4th and that he hopes she enjoyed her vacation, Elliott reports back on a phone call he has had with Matt McManus and Michael Stewart of State and Robert Jones and Jim White of TransCanada.

“I just got off the phone,” Elliott writes, saying that TransCanada informed State that it would “withdraw our request for a special permit to operate KXL at higher pressure.” After explaining more about the decision, Elliott tells Verloop that “We are hoping to coordinate going public with the decision with Nebraska Senator Ben Nelson.”

Elliott then outlines his understanding of part of the review process for the requested Keystone XL pipeline permit: “We were informed by Matt that [the] 90-day window that the cooperating agencies have to consult on the pipeline’s national determination will start on the day that State publishes the final environmental impact statement. That does guarantee a delay (maybe 45 days) on State’s recommendation of a presidential permit.”

No doubt Elliott would claim he was typing quickly so nothing should be read into his exact wording, but his language read plainly appears to indicate he expects State will end up recommending a permit.

Elliott concludes his email writing that TransCanada meetings with State the previous week were “informative and productive.”

July 26, 2010, 3:00 p.m. – document 06 – Verloop asks if pipeline pressure could later be raised

Verloop replies to Elliott’s comment that TransCanda has abandoned its request to operate the Keystone XL pipeline at a higher than normal pressure with a question: “I take it withdrawing the request does not preclude TCPL [TransCanada Pipelines] from re-submitting in the future?”

July 26, 2010, 3:07 p.m. – document 06 – Elliott acknowledges pressure can later be raised

Elliott replies that Verloop is “correct” that “withdrawing our request for a special permit at this time, allows TransCanada to submit a request for a special permit at a later date. The process for consideration would start from scratch and include an environmental assessment done by PHMSA.”

This exchange indicates that TransCanada saw the dangerously high pressure it initially proposed as a political liability that might prevent the pipeline from being built. The exchange illustrates State’s understanding that TransCanada planned to raise the pressure after the pipeline had been constructed, when opposition might be less organized and intense. One clear example of the political value of TransCanada’s saying in summer 2010 that it would reduce the pressure was Senator Jon Tester’s announcement that as a result, he would support the pipeline.

The existence of this email should serve as a warning to anyone interested in pipeline safety that if the pipeline is built, regardless of TransCanada’s withdrawal of an application for a special permit in 2010, oil could end up being pumped through it at dangerously high pressures.

July 27, 2010 – document 09 – Verloop forwards part of exchange to Ambassador

The next day, in response to an email (not in our possession) from the U.S. Ambassador to Canada, David Jacobson, Verloop forwards part of the previous day’s exchange with Elliott. She explains that the 90-day window is not in response to EPA action, and assures Jacobson and another energy-focused embassy staffer, Lonzell Locklear, that “TransCanada is comfortable and on board.”

We are unclear on why Jacobson or Verloop felt it necessary or proper to seek or provide assurance of TransCanada’s “on board” status. Would they have pursued a different process had TransCanada not approved of the process State was following? 

September 10, 2010, 5:48 p.m. – document 016 – Verloop cheers TransCanada’s pipeline push

In the most disturbing document we have thus far obtained via the Freedom of Information Act, senior State Department staffer Verloop provides clear evidence that she sees herself as being on TransCanada’s side and supports pipeline approval during the time period when the State Department is supposed to be conducting an impartial evaluation.

After Elliott forwards a news release announcing Senator Max Baucus’ support of the pipeline to a BCC list, Verloop replies directly to Elliott and makes clear whose side she’s on: “Go Paul! Baucus support holds clout.”

These two sentences can only be read one way: Verloop is literally cheering Elliott on as he works to secure support for the pipeline.

In the same email, Verloop then evaluates TransCanada’s President Hal Kvisle’s performance at an unspecified event the day before, saying that while he “took some tough questions” … “he also had some great handouts/reports.”

September 10, 2010, 7:53 p.m. – document 016 – Elliott responds to Verloop’s cheering

Elliott replies to Verloop, and says lobbying “is a grind but when the grind pays off with support it makes it worth while.” He says he likes working for Kvisle and finishes his email with the peculiar sentence, “I’m a fan of Canadians, if you can’t tell.”

December 14, 2010 8:35 a.m. – document 019 – Verloop invites Elliott to visit winter wonderland

Verloop forwards Elliott an E&E news story about environmental groups raising concerns about his ties to Secretary of State Clinton. (Elliott was previously a top Clinton campaign aide.) Verloop’s odd subject line, given the contents of the news story she is forwarding: “Pleased to see your name in print 🙂 ”

In the body of the email, above the news story, Verloop asks Elliott to visit: “When are you coming up to visit? It’s a snowy winter wonderland here this morning.” Verloop then informs Elliott that she “oversaw” Secretary of State Clinton’s visit to Ottawa for a trilateral meeting of North American governments. “KXL was not raised, but [Canadian Ambassador to the U.S.] Doer flew back on plane with her.”

December 14, 2010, 10:10 a.m. – document 019 – “I have to try to find a way back to Ottawa so that we might catch up”

Just under two hours later, Elliott responds to Verloop’s forwarding of the E&E story with a rambling, personal reply (ellipses are Elliott’s) in which he indicates he might travel to Ottawa for the purpose of seeing Verloop:

ldquo;Friends tell me I should be flattered from the attention of a story like this but I shake the sick feeling in my stomach … I imagine Ottawa is idyllic this time of year … I have to try to find a way back to Ottawa soon so that we might catch up … I hope you guys get treated to a holiday blow out party … seems only fair for the hard work you do and the sacrifice you make … ”

December 14, 2010, 12:27 p.m. – document 019 – Verloop tells Elliott he was hired for his connections

Verloop replies, perhaps attempting to make Elliott feel better, with the shocking acknowledgment that “it’s precisely because you have connections that you’re sought after and hired.” She also tells him that she’s not attending a holiday blowout – “ just a meeting with [TransCanada president] Hal [Kvisle] on Thursday 🙂 ”

January 12, 2011 – document 020 – Elliott’s FOIA “achievement” and his bucket list

In a bizarre message sent after news appeared that the State Department had decided to deny our FOIA request, Verloop forwards an E&E story about the denial. Verloop’s only comment is in the subject line of the email, where she writes, “A new achievement! Subject of a FOIA request, was this on your bucket list?? ”

It’s unclear what Verloop intended to achieve with the email, but it seems weird of her to congratulate Elliott for being the subject of a FOIA. There was no record of a reply from Elliott in the documents we were provided by the State Department.

February 16, 2011 – document 026 – Evidence of cozy lobbyist ties beyond Elliott

This email provides evidence that Verloop’s cozy relations with Keystone XL lobbyists extend beyond Elliott. Scotty Greenwood, a lobbyist for McKenna Long & Aldridge (a lobbying firm hired by TransCanada) forwards an email about Senator Lugar’s support for Keystone XL to Verloop along with other lobbyists: McKenna Long & Aldridge partner Gordon Giffin, Susan Carter, who works on federal relations for ExxonMobil, and Elliott.

April 7, 2011, 1:03 p.m. – document 031 – Elliott’s evening no-show

In response to an innocuous-appearing email in which Elliott forwards a letter from Texas Governor Rick Perry to a BCC’d list, Verloop replies directly to Elliott, complaining simply: “No show last night 🙁 ”

April 7, 2011, 1:07 p.m.  – document 031 – Explaining the no-show

Elliott quickly replies that he was diverted by work, adding: “I’m sure it was a lot more fun in Ottawa. I hope you are doing well.” It is unclear what event occurred in Ottawa on April 6, 2011 that Elliott missed.

June 15, 2011 – document 040 – Hand delivery of invitations to Elliott and colleague

In an email with subject line “Two more 4th invites” Verloop asks colleagues to “print out invites” for Elliott and Peter Kruselnicki, “both with TransCanada,” to an unspecified event. “I will hand deliver as they are both outside Ottawa and flying in.”

The invitations could have been to an (American) Independence Day party, which seems likely given that in an email sent July of the previous year (excerpt above), Verloop referenced having seen Elliott “at the 4th.” It’s not clear why a State Department employee would invite a firm with a major proposal pending before the department to join State Department staff at a social event. The offer to hand deliver the invitations is also notable, with State employee Verloop going out of her way to do TransCanada a favor.

Download and view the documents of the second release | Read our memo about the documents from the first release