Don't decide on Keystone until conflict of interest probe complete

Sports, courts and auditors verifying financial reports: Across fields of activity, it is widely understood that arbiters and finders of fact must be independent of the parties they are evaluating.

Then how can it be that one of the most environmentally controversial projects in U.S. history -- the Keystone XL pipeline -- may be approved on the basis of an environmental review by a company connected to TransCanada, the company wishing to build the pipeline?

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Because it would cross the U.S.-Canada border, TransCanada needs State Department permission to construct the pipeline. Before approving the project, federal law requires the State Department to conduct an environmental review of the pipeline's risks.

To do the review, State Department officials hired a London-based firm called Environmental Resource Management (ERM). TransCanada, the company wishing to build the pipeline, helped select ERM and had a previous working relationship with the firm, but this was not disclosed on ERM’s application to the State Department for the job. The firm also did not disclose that it has worked for more than a dozen oil companies with a stake in the project and is a dues-paying member of the American Petroleum Institute, the No. 1 booster club for fossil fuel use in this country, which has spent at least $22 million lobbying for Keystone XL.

After these apparent conflicts and failures to disclose became known, the State Department's Inspector General, Steve A. Linick, launched an investigation. Linick says he anticipates concluding his investigation in February.

It should be a no-brainer for Secretary of State John Kerry to delay any final action on Keystone until release of the Inspector General’s report.  And on Thursday, 25 House members sent President Obama a letter echoing that call.

If it turns out that ERM did lie to get the job, the State Department should restart the review process -- and ERM should be disqualified from future federal contracts. There's a reason we insist that referees, umpires, judges, auditors and other arbiters and inspectors be independent: If they're tied to interested parties, opportunities for corruption abound. Perhaps even more important, the subtle effects of friendship and social obligation make it very likely that -- knowingly or unconsciously -- referees will shade decisions for the party to which they're tied.

To use a favorite term in Washington, the optics of the ERM arrangement sure look bad. In its contract application, ERM stated that it had no previous relationship with TransCanada over the past three years. But publicly available documents show that ERM and TransCanada teamed up on a proposal for the Alaska Petroleum Pipeline in 2011.

In addition to its membership in API, ERM is also a member of several other organizations that are lobbying for approval of Keystone XL. The American Fuel and Petroleum Manufacturers PAC is one of those groups. In 2012 it gave significant campaign contributions to lead advocates in the House of Representatives for expediting approval of the pipeline. AFPM PAC also spent $3.7 million lobbying for Keystone XL. ERM also belongs to the Western Energy Alliance, Western States Petroleum Association and the Louisiana Mid-Continent Oil and Gas Association, all of which have lobbied for the pipeline.

The Keystone XL pipeline has become so controversial because it threatens disruptive oil spills and leaks across the United States and, worse, to accelerate the approach of catastrophic climate change. With so much at stake, it's easy to see the wisdom of the law requiring a thorough environmental review. But the law won't do any good if the review is compromised.

Rules relating to transparency, disclosure and conflict of interest aren't just annoying bureaucratic hurdles to government action. From our nation's founding, small-d democrats have understood that openness in government is a prerequisite to good government decision-making, and ensuring that our government is of, by and for the people, not just the well-connected few. In the case of Keystone, not just the people's but the planet's well-being might be at stake.

Weissman is president of Public Citizen.