The inquiry comes a day after thousands of activists protested Sunday. State to review Keystone XL analysis

The State Department’s inspector general has agreed to do a “special review” of whether the department’s analysis of TransCanada’s Keystone XL pipeline project has been done properly.

Deputy IG Harold Geisel — the highest-ranking official in the department’s IG office — will look into the matter amid allegations of bias, influence peddling and conflicts of interest raised by environmental activists and more than a dozen congressional Democrats.


In a memo Friday to Deputy Secretary of State William Burns, Geisel said he will grant a request from 14 members of Congress to conduct a review.

One of those members, Sen. Bernie Sanders (I-Vt.), said in a statement Monday that he appreciates Geisel’s “willingness to treat this important matter, and the allegations of conflicts of interest, with the seriousness it deserves.”

“This is a critically important issue for our environment and the energy future of our country,” added Sanders, who caucuses with Democrats. “At a time when all credible scientific evidence and opinion indicate that we are losing the battle against global warming, it is imperative that we have objective environmental assessments of major carbon-dependent energy projects.”

Geisel’s memo, which was obtained by POLITICO, said the “special review” will aim “to determine to what extent the Department and all other parties involved complied with Federal laws and regulations relating to the Keystone XL pipeline permit process.”

The review “will be conducted at appropriate bureaus and offices” at the department, including those involving the economy, energy, oceans, the environment and the Office of the Legal Adviser. It will include “interview of appropriate officials and an assessment of pertinent documents,” according to the memo.

Fourteen lawmakers — led by Sanders and Rep. Steve Cohen (D-Tenn.) — asked Geisel last month to do the investigation.

The lawmakers also sent a letter to President Barack Obama asking him to hold off on a decision on the $7 billion, 1,700-mile pipeline project until after the IG’s office probe is completed.

The IG inquiry — which comes a day after thousands of activists protested Sunday against the pipeline project — adds to the growing list of recent signals suggesting that it may be a while before Obama announces a decision on the pipeline.

The EPA has yet to submit its comments regarding the final supplemental environmental impact analysis that the department released in August, which said the pipeline project would create minimal harm. That analysis largely mirrored earlier ones from the department, which the EPA and some congressional Democrats criticized as insufficiently addressing potential harm to air and water quality, wildlife and climate change.

Activists and Democrats are raising eyebrows at the use of Cardno ENTRIX to handle that review after the company listed TransCanada as a “major client” on its website.

The department has already issued a detailed defense of its analysis to Sanders and Sens. Ron Wyden (D-Ore.) and Patrick Leahy (D-Vt.), saying among other things that Cardno ENTRIX works for the department and not for TransCanada.

Sanders, Wyden and Sen. Sheldon Whitehouse (D-R.I.) asked for the IG review.

Secretary of State Hillary Clinton has also denied any problem with the department’s review, telling The Associated Press last month that she has “no reason to believe” that the department is biased in favor of the project.

Senate Environment and Public Works Chairwoman Barbara Boxer sent her own letter to Clinton on Friday asking the department for details proving that the review of the pipeline project was done properly under the National Environmental Policy Act.

This article first appeared on POLITICO Pro at 12:56 p.m. on November 7, 2011.

CORRECTION: A previous version of this story misstated the number of lawmakers requesting a review. There were 14.

CORRECTION: Corrected by: Bridget Mulcahy @ 11/07/2011 02:35 PM CORRECTION: A previous version of this story misstated the number of lawmakers requesting a review. There were 14.