POLITICS
10/03/2011 11:00 EDT | Updated 12/03/2011 05:12 EST

New emails spark fresh controversy over Keystone XL pipeline

WASHINGTON - Emails between a senior diplomat at the U.S. Embassy in Ottawa and the chief lobbyist for Calgary's TransCanada suggest a chummy relationship as the company tries to win approval from the U.S. State Department for its Keystone XL pipeline.

"Go Paul!" read one email written a year ago from Marja Verloop, a State Department employee working in Ottawa on energy and environmental matters, to Paul Elliott, the lobbyist who was a key figure in Secretary of State Hillary Clinton's failed presidential bid in 2008.

The emails were released Monday following a freedom-of-information request from Friends of the Earth, an environmental group that alleges correspondence between Elliott and State Department officials proves the approval process for the pipeline is corrupt. The State Department will decide whether to green-light Keystone XL in the coming weeks.

Verloop sent the email after learning that Montana Sen. Max Baucus had thrown his support behind the proposed pipeline. Keystone XL will transport millions of barrels per week of oilsands crude through six U.S. states if it's approved.

"Baucus support holds clout," Verloop assured Elliott.

During another exchange of emails, Elliott commiserates with Verloop about "the passing of your kitty."

Last December, Verloop asked Elliott: "When are you coming up to visit? It's a snowy winterland here this morning."

He responded: "I have to try to find a way back to Ottawa soon so that we might catch up."

That exchange was part of a volley of emails in which Verloop congratulated Elliott about being featured in a story by E&E Publishing about his close ties to Clinton.

"Pleased to see your name in print," she wrote with a smiley-face emoticon.

Elliott replied that he had a "sick feeling in my stomach," illiciting a response from Verloop that included a frowning emoticon and her comment: "At the end of the day, it's precisely because you have connections that you're sought after and hired."

The emails also show Verloop obtaining invites to a Fourth of July party for TransCanada officials this year at the U.S. Embassy in Ottawa.

An earlier release of emails illustrated Elliott's efforts to capitalize on his political connections to nail down meetings with high-level State Department officials while attempting to ease any concerns about the safety and environmental impact of the $7 billion pipeline.

State Department officials argued that those emails simply showed Elliott has been unable to secure meetings with key agency decision makers, and has instead been repeatedly redirected to lower-level staff with no sway over the approval process.

The Keystone brouhaha was a key topic of discussion at the State Department daily briefing on Monday as spokeswoman Victoria Nuland made a similar argument about Verloop's influence.

"The Friends of the Earth have requested copies of communications between the Department of State and Paul Elliott, so from our perspective, they're only looking for emails on half of her work, not her full docket there," she told the daily news briefing.

"Her conversations were far broader than that. That said, she did not play a role in either the development of the environmental impact statement nor will she play a role in the secretary's ultimate decision."

One reporter noted that Elliott's email correspondence with Verloop seemed far chummier than his messages to and from other State Department officials in Washington, and asked about the history of their acquaintance.

"I can't speak to whether they had a relationship before she took up her posting in Ottawa or before he went to work for TransCanada," Nuland said.

Friends of the Earth insisted the emails prove the State Department has a pro-pipeline bias.

"The emails between Verloop and Elliott are extremely friendly and illustrative of a cosy and complicitous relationship," the group said in a statement on Monday.

"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. The emails also indicate that Elliott succeeded in securing multiple meetings between TransCanada and high-level officials at the State Department."

Terry Cunha, a spokesman for TransCanada, said the emails simply show a lobbyist at work, adding that Elliott is just a small piece in the puzzle in terms of whether Keystone XL ultimately gets approval.

"It's absurd to suggest that any one person might influence a process that includes the involvement of areas of government that includes the Department of Homeland Security, the Department of Transportation, the Department of Defence, the Department of Justice and many others," he 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."

He said TransCanada was challenging Friends of the Earth and other environmental groups to release emails from their dozens of lobbyists to and from State Department and the Environmental Protection Agency officials.

"The environmentalists continue to use sound bites over substance and facts, attacking anyone who disagrees with their point of view," he said.

Keystone XL has galvanized the environmental movement in the United States following last year's failed federal climate change legislation. Hundreds of people were arrested this summer in protests outside the White House aimed at convincing U.S. President Barack Obama to put the brakes to the pipeline.

The pipeline's opponents argue the project is a disaster waiting to happen as it traverses environmentally fragile areas of the U.S. Midwest, pointing to a series of recent spills along oil pipelines.

Proponents, meantime, say the pipeline will create much-needed jobs and help end American reliance on Middle Eastern oil.

Friends of the Earth have called upon the Justice Department to investigate whether Elliott violated the Foreign Agents Registration Act, requiring anyone "acting as agents of foreign principals in a political or quasi-political capacity to make periodic public disclosure of their relationship with the foreign principal, as well as activities, receipts and disbursements in support of those activities."

Friends of the Earth alleged in a letter to the department last week that Elliott failed to register.

The environmental group, along with the Center for International Environmental Law and Corporate Ethics International, sued Clinton earlier this year after it was thwarted in repeated attempts to obtain correspondence between Elliott and State Department officials.

By August, however, State Department officials started to hand over emails. More documents are expected to be released in the weeks to come.