WASHINGTON – Susan Rice’s would-be path to the U.S. State Department hit another snag on Wednesday following revelations that she owns significant stock in Calgary-based TransCanada, the energy giant hoping to win approval from the Obama administration to build its Keystone XL pipeline.
The State Department is in charge of making a final decision on the $7 billion pipeline since it crosses an international border.
If Rice, the current U.S. ambassador to the United Nations, is tapped to be Hillary Clinton’s replacement as secretary of state — and subsequently survives the nomination process in the U.S. Senate — she’d be in a potential conflict-of-interest situation.
As first reported by On Earth, an environmental news website affiliated with the Natural Resources Defence Council, Rice holds substantial investments in several Canadian oil companies and financial institutions.
Many of them stand to gain from both the pipeline and the expansion of Alberta’s oilsands.
Financial disclosure records show that Rice, who’s married to a Canadian, owns stock valued between US$300,000 and $600,000 in TransCanada (TSX:TRP).
The records also show that about a third of Rice’s personal wealth — estimated to be as high as $43 million — is tied up in oil producers, pipeline operators and other Canadian energy companies.
Rice is married to Ian Cameron, a television producer who once worked for the CBC. Financial disclosure documents show the couple has at least $1.25 million invested in four of Canada’s biggest oil and energy companies, including Enbridge, Encana and Suncor.
Their investment portfolio, indeed, is swimming with Canadian firms, including the Bank of Montreal, the Bank of Nova Scotia, BCE Inc., Canadian Pacific Railway, Canadian Tire, Maple Leaf Foods, Research In Motion, the Royal Bank of Canada and Royal Trust Corp. of Canada.
The Royal Bank has been in hot water for years with environmentalists over its support for the development of the oilsands.
It was labelled Canada’s most environmentally irresponsible company by the Rainforest Action Network two years ago. The bank subsequently agreed to start consulting with First Nations before funding energy projects that pose environmental threats to their communities.
Ron Seifert, a spokesman for the Tarsands Blockade group, said Wednesday that Rice’s financial interest in TransCanada should raise serious alarm bells about any potential State Department nomination.
“It’s a tremendous conflict of interest,” he said.
“I wish I could say I was surprised, but from the outset this project has been rife with political collusion. This is sadly par for the course, and we hope there would be some integrity from the administration and they’d either decide against appointing her or she’d agree to divest herself immediately.”
Susan Casey-Lefkowitz of the Natural Resources Defence Council said if appointed, Rice’s situation would not be unusual.
“There are rules to ensure Senate-confirmed appointees have no conflicts of interests … there is a process for dealing with it,” she said.
“We hope Susan Rice would essentially ensure she has no interest in the companies associated with the pipeline … We trust she would divest or put these monies into some kind of closed trust if she was to be appointed.”
Indeed, if Rice ultimately got the State Department job, federal ethics officials would likely order her to sell her TransCanada stock and shares in related companies.
John Kerry, another Democrat in the running for the State job, owns no shares in TransCanada. The buzz in the U.S. capital, however, has the longtime senator headed to the Pentagon to replace Leon Panetta as defence secretary.
U.S. President Barack Obama reportedly favours Rice to replace Clinton at State; he praised her as “extraordinary” earlier Wednesday during a cabinet meeting.
But she’s facing a rough ride from Republican senators who have been maligning her for weeks for her public remarks following the eruption of anti-American violence in Libya.
Chris Stevens, the U.S. envoy to Libya, and three other Americans were killed in an attack on the consulate in Benghazi on the 11th anniversary of the terrorist attacks of Sept. 11, 2001.
Rice initially insisted the attacks were the result of a spontaneous eruption of violence over an anti-Islam video made in the U.S.; it was later determined that it was a pre-meditated terrorist attack by al-Qaida operatives.
She met with her Republican critics on Capitol Hill earlier this week in a supposed charm offensive that backfired badly when they emerged from the meeting to say they had even graver concerns about Rice’s post-attack remarks after hearing her explanation. Rice has said she was working off information provided to her by intelligence agencies.
She suffered another blow on Wednesday, when moderate Republican Sen. Susan Collins said she too had misgivings about Rice’s potential nomination. Obama would need Collins’ vote if Rice is to get confirmed by the U.S. Senate.
The re-election of Obama has put Keystone XL back on the radar in the United States. The pipeline would bring 700,000 barrels of carbon-intensive oilsands crude a day from Alberta, through six states and to Gulf Coast refineries.
The oil industry is cautiously optimistic the president will now approve the project he stalled in January, when he dismissed TransCanada’s application until after the November election.
Obama cited concerns about the risks posed to an environmentally sensitive area in Nebraska by the pipeline’s original route.
The president invited TransCanada to submit another application after rerouting the pipeline around Nebraska’s Sandhills, necessitating another State Department environmental review of the project.
After working closely with Nebraska officials to develop a new route, the company submitted another application in May.
Public hearings into the new route are scheduled for next month, and then Nebraska Gov. Dave Heineman will review it. TransCanada, consequently, could know the fate of Keystone XL in just a few months.