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E-mails fuel charges of 'complicity' between State, TransCan

Demonstrators for the Keystone XL pipeline, right, and a demonstrator against the pipeline meet outside Pershing Auditorium near the state Capitol in Lincoln, Neb., Tuesday, Sept. 27, 2011.

Nati Harnik/Nati Harnik/Associated Press

Critics of the TransCanada Corp. Keystone XL project are raising new questions about the U.S. State Department's review of the controversial pipeline, after a second batch of internal documents showed an Ottawa-based U.S. official cheering on TransCanada.

The relationship between Paul Elliott, a TransCanada lobbyist, and various State Department employees is at the heart of the hundreds of pages of internal correspondence released to environmental groups as part of a Freedom of Information Act request. Many are e-mails between Mr. Elliott, and Marja Verloop, the State Department's counsellor for energy and environment at the U.S. embassy in Ottawa.

In an interview with The Globe and Mail, Mr. Elliott defended himself and those he corresponded with as upstanding workers who did nothing wrong.

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But in one striking missive to Mr. Elliott, Ms. Verloop appears to celebrate after TransCanada secured the support of Montana Senator Max Baucus.

"Go Paul!" she wrote in the e-mail. "Baucus support holds clout."

She also cheered when an initial request to release those e-mails was declined, and appeared to speak for TransCanada in an e-mail to David Jacobson, then U.S. Ambassador to Canada. She says in it the company is "comfortable and on board" with certain steps in the regulatory process.

The new e-mails raise questions about how the State Department has handled the review of Keystone XL, a controversial $7-billion pipeline that would bring Canadian oil sands crude and northern U.S. crude to the Gulf Coast. These documents follow an earlier release that critics also said suggested a cozy relationship between TransCanada and State.

"What we see here is not only bias, it's complicity. It's the fact that the State Department is not acting as an oversight and regulatory entity, but as a facilitator for TransCanada's business interests," said Damon Moglen, director of the climate and energy program with Friends of the Earth, one of the groups that petitioned for the documents.

"There is a growing sense of scandal around the State Department's handling, or I should say mishandling, of this."

But the documents also show a bureaucracy wary of according TransCanada too much priority. At one point, State Department workers decline a company request for a follow-up meeting with Jose Fernandez, assistant secretary for economic, energy and business affairs, saying "it would be unusual" to do so.

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The State Department did not reply to a request for comment, but told other news organizations it is "committed to a fair, transparent and thorough process."

In a statement, TransCanada said: "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."

In an interview, Mr. Elliott argued that he has not had improper influence. Though he is paid as a lobbyist – and is still working for TransCanada – he said the approval process for Keystone XL is so vast and complex that "it's hard to see how ... one person might be able to influence this process.

"That's not realistic. It's not practical and it's not honest."

Mr. Elliott said he has not communicated directly with Secretary of State Hillary Clinton, on whose presidential campaign he worked, since beginning work for TransCanada. He accused Keystone's opponents of being politically motivated. "The emails don't prove anything, in my opinion," he said.

He said he has a "professional association," not a personal relationship with Ms. Verloop, whom he called a "good, decent human being" and defended against allegations of bias.

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"To say that because we are people who respect each other and value each other's thinking that somehow she's tainted or her agency is tainted – I don't know how one draws that connection," he said.

Still, it's clear the connection between Mr. Elliott and Ms. Verloop is a warm one. At one point, when he fails to attend an event, she writes: "No show last night," and follows it with a sad face emoticon. She compliments him, saying, "It's precisely because you have connections that you're sought after and hired." He, in turn, praises "the hard work you do and the sacrifice you make."

In another e-mail, Mr. Elliott expresses condolences over the death of Ms. Verloop's 17-year-old family cat.

"I'm really sorry to hear about the passing of your kitty; I hope the little ones weren't too broken up by the occasion," he said.

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About the Author
Asia Bureau Chief

Nathan VanderKlippe is the Asia correspondent for The Globe and Mail. He was previously a print and television correspondent in Western Canada based in Calgary, Vancouver and Yellowknife, where he covered the energy industry, aboriginal issues and Canada’s north.He is the recipient of a National Magazine Award and a Best in Business award from the Society of American Business Editors and Writers. More

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