Keystone XL: Newly released documents show State Dept. tried to hide consultant's conflict of interest

Keystone XL: Newly released documents show State Dept. tried to hide consultant’s conflict of interest

Friends of the Earth: Sec. Kerry must throw out scandal-ridden environmental review

WASHINGTON, D.C. – The State Department knew the consulting firm hired to review the proposed Keystone XL tar sands pipeline had ties to pipeline builder TransCanada and oil companies with a stake in the project, but accepted the consultant’s claims that it had no conflict of interest and tried to cover up the truth, government documents reveal. 

The Huffington Post reported today that the documents, released by the State Department to the Sierra Club under the Freedom of Information Act, show that Environmental Resources Management, the London-based consultants who conducted the review of the pipeline’s environmental impacts, had “conflicts of interest that should have prevented it from winning the contract for the analysis of the controversial pipeline.”

The new documents put a spotlight on the State Department’s complicity. They show that the State Department made no effort to verify ERM’s false claims of no conflict of interest and later tried to cover up evidence of ERM’s ties. And these revelations are not likely to be the last: in response to a FOIA suit by Friends of the Earth, the State Department agreed Tuesday to release more documents on pro-pipeline lobbying by the Canadian government and by former aides and colleagues of President Obama, Secretary of State John Kerry and his predecessor Hillary Clinton. 

“Once again, we see undeniable evidence that ERM’s review of the Keystone XL pipeline was tainted from the beginning by lies, lobbying and cover-ups,” said Ross Hammond, senior campaigner for Friends of the Earth. “There is no way President Obama should rely on ERM’s review as a basis for his decision on the pipeline. Secretary Kerry should fire ERM and throw out their propaganda masquerading as an unbiased review. Then he and the president should look at the facts and end this Keystone XL nightmare.”

Research by Friends of the Earth has previously shown that ERM lied on its conflict of interest disclosure forms when it said it had not worked for TransCanada or other businesses which would benefit if Keystone XL is approved. In fact, ERM and TransCanada have worked together since 2011 on the Alaska Pipeline Project, and ERM’s own publicly available documents show that the firm has business with over a dozen companies with operating stakes in the Alberta tar sands. Those revelations led to an investigation by the State Department inspector general, expected to be complete by February. 

Among the revelations in the newly released documents:

  • A July 13, 2012, action memo signed by Assistant Secretary of State Kerri-Ann Jones states that “ERM is the only candidate that has not worked for TransCanada or its subsidiaries or affiliates.” The memo raises the question of whether Jones knew the statement was false or if lower-level State Department employees hid the fact from her. 
  • An August 3, 2012, official State Department press guidance to employees coaching them on how to respond to media inquiries on the selection of ERM asserted that ERM had never worked for TransCanada or its subsidiaries. Three days later, the press guidance was amended, striking the part about ERM never working for a TransCanada subsidiary.
  • In none of the documents is there any evidence that State Department employees attempted to independently verify ERM’s claims that it had no ties with TransCanada or other companies that would benefit if Keystone XL is approved, when ERM’s own publicly available documents make clear its extensive work with TransCanada and other oil and gas companies. The State Department’s failure to catch ERM’s lies violated its own conflict of interest screening guidelines, issued by the inspector general last year after members of Congress complained that the previous Keystone XL environmental review was plagued by bias and conflicts of interest. 

“In a memo coaching State Department staff what to tell the press, they’re told to say they’re committed to conducting the pipleline’s environmental review in a ‘rigorous, transparent, and efficient manner,’” said Hammond. “In fact, since Day One the review has been polluted by conflicts of interest, insider lobbying and the influence of the oil industry. If ERM and TransCanada lied about the most basic things and the State Department either didn’t bother to check or helped cover up the truth, how can President Obama or the American people believe anything ERM’s study says?”


Ross Hammond, (415) 559-5082, [email protected]
Bill Walker, (510) 759-9911

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