Bidding For Palin Pipeline Contract Flawed
Contract To Build Alaska Natural Gas Pipeline Awarded Through Process That Narrowed Field To Company Tied To Administration
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Republican vice presidential candidate, Alaska Gov. Sarah Palin speaks at the University of Findlay in Findlay, Ohio, Wednesday, Oct. 22, 2008. (AP Photo/Madalyn Ruggiero)
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Palin Presses On
Republican vice presidential nominee Sarah Palin on the campaign trail.
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Sarah Palin
Alaska's youngest and first female governor tabbed to be McCain's running mate.
Beginning at the Republican National Convention in August, the McCain-Palin ticket has touted the pipeline as an example of how it would help America achieve energy independence.
Despite Palin's boast of a smart and fair bidding process, the AP found that her team crafted terms that favored only a few independent pipeline companies and ultimately benefited the winner, TransCanada Corp.
And contrary to the ballyhoo, there's no guarantee the pipeline will ever be built; at a minimum, any project is years away, as TransCanada must first overcome major financial and regulatory hurdles.
In interviews and a review of records, the AP found:
Instead of creating a process that would attract many potential builders, Palin slanted the terms away from an important group - the global energy giants that own the rights to the gas.
Despite promises and legal guidance not to talk directly with potential bidders, Palin had meetings or phone calls with nearly every major candidate, including TransCanada.
The leader of Palin's pipeline team had been a partner at a lobbying firm where she worked on behalf of a TransCanada subsidiary. Also, that woman's former business partner at the lobbying firm was TransCanada's lead private lobbyist on the pipeline deal. Plus, a former TransCanada executive served as an outside consultant to Palin's pipeline team.
Under a different set of rules four years earlier, TransCanada had offered to build the pipeline without a state subsidy; under Palin, the company could receive a maximum $500 million.
"Governor Palin held firmly to her fundamental belief that Alaska could best serve Alaskans and the nation's interests by pursuing a competitive approach to building a natural gas pipeline," said McCain-Palin spokesman Taylor Griffin. "There was an open and transparent process that subjected the decision to extensive public scrutiny and due diligence."
There were never more than a few players that could execute such a complex undertaking - at least a million tons of steel stretching across some of Earth's most hostile and remote terrain.
TransCanada estimates it will cost $26 billion; Palin's consultants estimate nearly $40 billion.
The pipeline would run from Alaska's North Slope to Alberta in Canada; secondary lines would take the gas to various points in the United States and Canada.
Building such a pipeline had been a dream for decades. The rising cost and demand for energy injected new urgency into the proposal.
When Palin was elected governor two years ago, she vowed to take on Exxon Mobil Corp., ConocoPhillips and BP, the multinational energy companies that long dominated the state's biggest industry.
Palin ousted fellow Republican Gov. Frank Murkowski, who negotiated a secret pipeline deal with the "Big Three" energy companies. That deal went nowhere.
The new governor tackled the pipeline issue with gusto, meeting with representatives from all sides and assembling her own team of experts to draw up terms.
Palin invited bidders to submit applications and offered the multimillion-dollar subsidy. Members of her team say that without the incentive, it might not have received any bids for the risky undertaking.
Palin's team was led by Marty Rutherford, a widely respected energy specialist and veteran of state government. Rutherford solidified her status when, in 2005, she joined an exodus of Department of Natural Resources staff who felt Murkowski was selling out to the oil giants.
What the Palin administration neglected to mention in its announcement of Rutherford's appointment was that in 2003, Rutherford left public service and worked for 10 months at the Anchorage-based Jade North lobbying firm. There she did $40,200 worth of work for Foothills Pipe Lines Alaska, Inc., a subsidiary of TransCanada.
Foothills Pipe Lines Alaska Inc. paid Rutherford for expertise on topics including state legislation and funding related to gas commercialization, according to her 2003 lobbyist registration statement.
Palin has said she wasn't bothered by that past work because it had occurred several years before. But Rutherford wouldn't have passed her new boss' own standards: Under ethics reforms the governor pushed through, Rutherford would have had to wait a year to jump from government service to a lobbying firm.
Rutherford also has downplayed her work for Foothills.
"I did a couple of projects for them, small projects," she told a state Senate committee examining the TransCanada bid earlier this year. While a partner, Rutherford said, she "realized that my heart was not in the private sector, it was in the public sector."
At one point, Palin's pipeline team debated Rutherford's role, but concluded there was no problem, said Revenue Department Commissioner Pat Galvin, another team member.
Patricia Bielawski, Rutherford's former partner at Jade North, spent last summer in Juneau, the state capital, serving as TransCanada's lead private lobbyist. While the Legislature debated
and ultimately approved - the TransCanada deal, Bielawski met with lawmakers and sat in on the public proceedings, several legislators said.
Bielawski told AP that Rutherford never directly lobbied the Legislature for Foothills, and that Rutherford broke no rules.
But others say it's a legitimate question.
"I'm not saying someone's getting paid off for a sweetheart contract, but it's very hard to ignore that this is your former partner and your former client standing there before you," said Republican Sen. Lyda Green, a Palin critic who in August voted against awarding TransCanada the license.
Tony Palmer, the TransCanada vice president who leads the company's Alaska gas pipeline effort, rejects the suggestion that his company benefited.
"We have gained clearly no advantage from anything that Ms. Rutherford did for Foothills some five years ago on a very much unrelated topic," he said.
Rutherford did not respond to interview requests. But McCain-Palin spokesman Griffin said Rutherford "had no decision-making role or authority," and contended that such matters were handled by others on the Palin pipeline team.
TransCanada also had a connection to the team hired by the Palin administration to analyze the bid. Patrick Anderson, a former TransCanada executive, served as an outside consultant.
In January 2007, Palin spoke the first of at least two times to Vice President Dick Cheney, the Bush administration's point person on energy issues, according to calendars obtained by the AP. Cheney's staff pressed the Palin administration to draw in the energy companies, said current and former state officials involved in those discussions.
As the governor's approach unfolded in the spring of 2007, Palin said she saw problems if the firms that own the gas also owned the pipeline. They could manipulate the market or charge prohibitive fees to smaller exploration firms, discouraging competition.
Several important requirements in the legislation were unpalatable to the big oil companies. In the talks under Murkowski, the firms asked that the rates for the gas production tax and royalties be fixed for 45 years; Palin refused to consider setting rates for that long.
Under her process, pipeline firms had an advantage because they simply pass along taxes paid by oil and gas producers.
Oil company officials warned lawmakers they wouldn't participate under those terms. Still, in a near unanimous vote, the Legislature passed the Alaska Gasline Inducement Act in May 2007, as generally written by Palin's pipeline team.
Once the state issued its request for proposals on July 2, 2007, the level of communication between the government and potential bidders was supposed to decrease drastically. State lawyers advised public officials to keep their distance, and bidders were told to submit questions on a public Web site.
But Palin had conversations with executives at most of the major potential bidders during that period, according to her calendars, which indicate that the pipeline was the subject of the discussions, or that the conversations occurred immediately after a briefing with Palin's pipeline team.
TransCanada's Palmer described communication with state officials as nonexistent.
According to the governor's official schedule, however, Palin called TransCanada President and CEO Hal Kvisle on Aug. 8, 2007. Palmer said the call was to clarify the bidding process.
Griffin said that in keeping with legal guidance, Palin never spoke in any of the meetings about the competitive bidding process.
By the Nov. 30 submission deadline, there were five applications. But the state disqualified four for failing to satisfy the bill's requirements.
That left TransCanada.
The Canadian giant had been pursuing an Alaska pipeline since at least 2004, when the company negotiated a deal with Rutherford that the state ended up shelving. While the details remain confidential, six people familiar with the terms told the AP that TransCanada was willing to do the work then without the large state subsidy.
In testimony this July before the state Senate, Rutherford described the 2004 deal as presenting different trade-offs.
Others who reviewed the deal think much of the $500 million will be wasted money.
"Most definitely TransCanada got a sweetheart deal this time," said Republican Sen. Bert Stedman, who voted against the TransCanada license. "Where else could you get a $500 million reimbursement when you don't even have the financing to build the pipeline?"
© MMVIII The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.





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See all 64 CommentsJohn McShame surrounds himself with......Sarah Failin, Joe the Plumber, and his brother Joe.
Be afraid.
there is no guarantee that any of the gas will make it to the lower 48 (but BILLIONS in federal loan guarantees for Alaska)
the line ends in the Alberta tar sands (oil shale drilling - environmentally devastating but now VERY lucrative for the oil companies
http://www.dailykos.com/storyonly/2008/9/8/12517/55971
There is a non-competition clause in the contract that states that if Alaska "faciliates" a contract with a competitive firm - the state owes TransCanada
what they would have expected to get in on-going revenues based on the expected volume to flow through the pipeline. Since the state has been unable or unwilling to estimate the volume this is an OPEN ENDED non-competition clause.
Being as democrats are proponents of both animal rights and gay rights.......I''ll leave your ignorant post alone.
Just keep in mind that if it wasn''t for the "Elite Liberal Media".........you wouldn''t have a venue in which to post your hateful comments.
You are a posterchild for the McShame/Failin ticket.
I volunteered to serve my country, and put my life on the line to protect and defend the constitution, including your right to babble nonsense. What you believe doesn''t concern me. Your intolerance towards your fellow American does. Let me remind you, this country by founded by people fleeing intolerance.
SURPRISE!
Resembles Iraq, now we know why she was picked for VP.
Corrupt to the bone.
You are the only trash on this site-why don''t you go back where you came from the ghetto slum you bi((-you want someone to kiss your arse? Are you sure you have one you miserable old lonely desperate for a d(( -a man is what you need. Maybe Todd can find you one from the AIP-I''m sure you would keep each other good company. Who gives a s(( who you won''t vote for-you''re so illiterate you wouldn''t vote for yourself IF you were on the ballot. You get on here and spew your racist views when you should be sitting in that demonic church you praise over and over. Do you even have a conscience? Your PHILOSPHICAL ARSE needs to see a psychiatrist and by the way, get your philosphical spewing hate racist idiot arse off this site. Your restless nights are coming ***. Are you in a Ph.D program? Yea right, you''re a McCain reject and a Ph.D. wanna be. Anyone out there a shrink? This fool needs to see you ASAP. Obama doesn''t need or want your vote you ********! Go back into your hole and come out in 2010-it''ll be a nice reflection period for you after your visit with the shrink. You''re ghetto KKK trash so what''s the difference, Professor
Where is that ghetto trailer you live in? You''re a ********* who wants someone to kiss/his/it''s arse-since you are poor from the slum you probably don''t have much of one. Obama the Muslim will be just fine WITH OR WITHOUT YOUR IGNORANT ARSE. After the election, you and GetRealTex and McCain should go and see that SHRINK together! My ARSE will be LMAO all day and night! Tissue for this idiot. The slime will be McFlip and Lying Sarah in a few days. Contact your shrink wiccan-things are looking good for the Muslim you abhorr!
And too bad your Oslime-a wouldn''''t even know how to begin to bid out a contract for an oil pipline that would help get the energy we need down to the lower 48.
Especially since the bastward wants to keep us funnelling billions to his Arabic/Muslim brethern so they can get strong enough to get a nuke!
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Posted by FromTexwLove at 06:02 PM : Oct 25, 2008
Re-distribute the wealth my arse! That the first article of the communist manifesto...coming straight out of the mouth of this Arabic-Mulim piece of trash from the worst political ghetto in the US.
Posted by FromTexwLove at 06:07 PM : Oct 25, 2008
You wouldn''t know a Communist if one jumped up and bit you! Enough of the Joe McCarthy Look Alike Garbage! We MUST and WILL change! I know you don''t like that but hey that''s always been the problem with you "NEVER change the way we do anything" Folks! By the way Capitalist LOVE communism Sparky... just ask the ones doing business in China!!
Where in the world do you get Barrack Obama being a muslim? He''s a Presbyterian. Why don''t you knock off al the rhetoric about "Muslim, "birth certificates," and Ayres, and just admit to yourself and everyone else that you''re a racist? Try it. Go ahead. Just look in the mirror and say, "I am a racist and proud of it." Now, give yourself the finger, go drink a beer and then untie the rope holding the door of your trailer shut and go for a nice walk. Afterward, come home, fry a steak, have four or five more beers and go to sleep. Oops... don''t forget to tie the door shut.
Apparently you CAN''T READ I was responding to a message FromTexWLove
This part was from FromTexwLove
And too bad your Oslime-a wouldn''''''''t even know how to begin to bid out a contract for an oil pipline that would help get the energy we need down to the lower 48.
Especially since the bastward wants to keep us funnelling billions to his Arabic/Muslim brethern so they can get strong enough to get a nuke!
THIS WAS MY RESPONSE TO FromTexwLove
Where is that ghetto trailer you live in? You''''re a ********* who wants someone to kiss/his/it''''s arse-since you are poor from the slum you probably don''''t have much of one. Obama the Muslim will be just fine WITH OR WITHOUT YOUR IGNORANT ARSE. After the election, you and GetRealTex and McCain should go and see that SHRINK together! My ARSE will be LMAO all day and night! Tissue for this idiot. The slime will be McFlip and Lying Sarah in a few days. Contact your shrink wiccan-things are looking good for the Muslim you abhorr!
You need to READ THE MESSAGE THOROUGHLY before you respond to something you apparently know NOTHING about. You continue to being the RACIST you admit you are. As for the beers and such, no I''ll leave that up to you-I''m certain you do a much better job while you''re kickin'' it with your racist buddies. Check out the full story NEXT TIME!
This one oversees the State of Alaska sending checks to every Alaskan, every year for energy royalties and then has the chutzpah to call Obama''s tax refunds policies Socialist. Of McBush/Palin, she has the bigger ones.
PALIN THE REFORMER?
What a joke!
Now you''''re about to get the shiv between the ribs.
Serves you right, you idiot.
You gambled, and now you''''ve lost.
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Posted by johnbrown888
And how do you think Obama got into politicis to begin with? Here''s a clue....if it''s a politician it knows how to bite and scratch and claw to get what it wants. But when it comes to Obama the mantra is ''may the best man win''! Get over it. Obama is not squeaky clean....by any stretch of the imagination. The press has just signed an oath to make him look like that until it''s too late to do anything about it.
The McCain Camp versus The Palin Camp
Got to love Country First politics...
Just where have you been, hiding in FAUX NEWS'' ***? The relatinships you mentioned have been addressed over and over.McFlip turned the script-
TAKE ONE OF YOUR WEEKLY SHOWERS and hear me well-the relationship with Ayers was a Board appointed by Annenberg, a rethug such as yourself.Obama wasn''t the ONLY member of the board that had an education focus.Rev. Wright was SO RIGHT in his condemning American because he as well as I were raised during the Civil Rights era where BLACKS HAD NO RIGHTS. Separate pisses, separate water fountains, separate churches so he was ABSOLUTELY CORRECT in his assertions of racism-you act as though racism just started when Rev. Wright preached it in his pulpit. *** dude the man KNOWS FIRSTHAND about racism just like you. As for Rezko and your FOX NEWS junkies, Obama ALSO addressed this. You see, Rethugs such as yourself HEAR ONLY what you want to hear.
I need you to prepare yourself to read the article coming out in the NY Times about the Making and Remaking of John McCain. What about the Alaskan Independence Party? What about Ethics violations? What about Keating 5?
What about the rape scandal/library scandal in Alaska? What about the b**ch refusing to meeting with the NAACP? What about no minorities in her cabinet in Alaska? Need I go on? You''re speaking BS compared to Ken and Barbie. Take a good shower next time-but again you''re a typical RETHUG who wants to continue to want answers to the questions that have ALREADY been answered.Do you wonder why the one-armed man doesn''t mention ACORN anymore? He spoke to the group a few years ago AND it appears the Rethugs were fradulent in registering voters, not the Democrats. Get your facts straight, O''Reilly WANNA BE
Like it ain''t-it seems you have NOTHING else to hold on to. Why hasn''t SP turned over her medical records after saying she would. You must be the DUMBEST person in the world-do you HONESTLY believe that anyone including you can run for President UNLESS they''re a naturalized citizen of the U.S.? Tell O''Reilly he''s making you look like an illiterate lonely person for lying to you. Stay the hell off FOX NEWS and these TROLL buddies of yours. SP went to 6 colleges in 5 years do you have her transcript? What about her birth certificate? What about her marriage license-she got married the had her first child two months later-looks like a who*re to me-what about McCain first wife-the woman waited for him but he went for someone 17 years younger who was much hotter and LOADED. Oh that''s the same reason he chose dummy pailin-that''s right, isn''t it? You are dumb! A Harvard Law degree just may be the answer for you
Palin 2012!!!
When the Republicans seek to accuse Obama of links to corruption, they have to make stuff up about ACORN and on and on.
When the Democrats seek to accuse McCain of links to corruption, all they have to do is grab any newspaper and point at Palin''s picture.
Hope this doesn''t destroy McCain''s faith in the Republicans'' ability to scam America....
As the governor''s approach unfolded in the spring of 2007, Palin said she saw problems if the firms that own the gas also owned the pipeline. They could manipulate the market or charge prohibitive fees to smaller exploration firms, discouraging competition.
Several important requirements in the legislation were unpalatable to the big oil companies. In the talks under Murkowski, the firms asked that the rates for the gas production tax and royalties be fixed for 45 years; Palin refused to consider setting rates for that long" seems to me she took on big oil and gave the contract to someone else. Actually impressive if you read the article.
Posted by likeitis5050 at 09:13 PM : Oct 25, 2008
still banging that drum about the birth certificate lie......check out snopes....and those general "high profile anti-americans he swears he doesn''t know."
Specifically who?? And don''t bring the same old Ayers *** which holds no water. Want to get specific? Al Queda endorsing McCain...there''s your terrorist connection.
Posted by holdfam1 at 12:30 AM : Oct 26, 2008
and what party would be the fiscally responsible party? The one that got us into an irresponsible war AND currently has this country over $800 Billion in debt on an economy bailout alone.....now throw in the $$ spent on the war.....if you plan on voting republican, then you are an absolute fool!!
McSame
McShame
This story by the AP, however, is hack journalism, and has the history of the Alaska Gasline Inducement Act (AGIA) and the Transcanada bid all wrong. In truth, the petroleum producers - ConocoPhillips and British Petroleum - have dominated Alaska politics for years through corrupt political practices. By going out to open bid for the natural gas pipeline, Alaska forced the petroleum producers to bid on a level playing field with natural gas transporters. ConocoPhillips and British Petroleum did not bid because they wanted to dictate the terms of the pipeline and the terms of taxation to Alaskans - the same old corruption scheme. In the end, Transcanada submitted a compliant bid to an open public process, and cleanly won the contract. The problem is, this is the first time Alaska has done business this way , through an open public process, and it was unfamiliar and awkward first time. Though it hurts my lips to say it, due to all the other *** Palin has totally wrong, Palin got this one right. What a cheap shot from the Associated Press.
********** How else would she be able to custom tailor the conditions of the bid to suit the target company? Give a girl a break...
"The leader of Palin''s pipeline team had been a partner at a lobbying firm where she worked on behalf of a TransCanada subsidiary. Also, that woman''s former business partner at the lobbying firm was TransCanada''s lead private lobbyist on the pipeline deal. Plus, a former TransCanada executive served as an outside consultant to Palin''s pipeline team."
********** But Palin says as long as she personally doesn''t benefit financially, it''s OK to violate Ethics Law.
Maaaaybe we should look closer to ensure Palin doesn''t have another massive lakefront home miraculously spring up, without the required permits and accountability.
"Under a different set of rules four years earlier, TransCanada had offered to build the pipeline without a state subsidy; under Palin, the company could receive a maximum $500 million."
There''s a maverick for ''ya *wink* Well, if she can''t get elected and provide massive tax breaks for Big Oil, this is the next best thing!
It would be awful to have her in power committing these sorts of unscrupulous actions on the national stage.
Alaskans should also kick her out. They deserve better.
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