The Keystone XL pipeline protests almost prefigured the protests on Wall Street and across the country, or at least offered a glimpse into the new aggressiveness on the part of activists to stop damaging government actions. Whatever the outcome, the weeks-long highlight on the controversial pipeline has caused PR problems for the White House heading into an election year. But now they have an entirely new problem.

The State Department has been forced to admit that their allegedly independent environmental review of the tar sands pipeline had a massive conflict of interest:

The State Department has admitted their environmental review of the proposed Keystone XL tar sands pipeline was conducted by a contractor paid for by the pipeline company itself, a potentially illegal conflict of interest first reported by ThinkProgress Green. The Canadian tar sands company TransCanada has applied to construct a major pipeline through the United States to pump tar sands crude to Texas refineries for the international oil market, and is awaiting approval by Secretary of State Hillary Clinton and President Barack Obama. The State Department’s approval hinges upon a positive Environmental Impact Statement (EIS), required by the National Environmental Policy Act to assess whether the pipeline is in the national interest.

A State Department official has admitted to the New York Times that the EIS was conducted by a company chosen and paid by TransCanada itself, flouting NEPA’s conflict-of-interest rules:

[Kerri-Ann Jones, the assistant secretary of state for oceans and international environmental and scientific affairs] said that TransCanada had managed the bidding process and recommended three candidates with Cardno Entrix topping the list. The department vetted Cardno Entrix by consulting with other agencies like the Bureau of Land Management. TransCanada pays the consultant directly, but would not reveal the amount.

This fox-writing-the-environmental-impact-review-of-the-henhouse moment looks really bad. The State Department swore at the time that their review would be based on sounds science, and yet the pipeline operator provided the cash for it. And this is not the first time that Cardno Entrix has done these reviews for TransCanada; they appear to be a kind of factory for rubber-stamp reviews.

TransCanada’s alibi here was that his company doesn’t directly contract with Entrix. They just selected them and paid them for the job. Makes sense.

The White House really didn’t need to give environmental activists another reason to be skeptical of their claims about the Keystone XL pipeline.