Democrats join defense of Palin, natural gas pipeline

Lawmakers say report by Associated Press was unfair to governor

Posted: Wednesday, October 29, 2008

Alaska legislators are criticizing a story on Gov. Sarah Palin by The Associated Press that challenged Palin's top accomplishment as governor - jump-starting progress on a natural gas pipeline.

"I thought it was a pretty shoddy reporting job, honestly," said Sen. Bill Wielechowski, D-Anchorage, among many Democrats and supporters of Barack Obama who are coming to Palin's defense.

The story, written by AP reporters Justin Pritchard and Garance Burke, concluded that the Alaska Legislature used a flawed process when it chose TransCanada Corp. to develop a pipeline to bring Alaska's gas to the U.S. Midwest, and blamed Palin for the decision.

The Legislature and Palin sought to make sure the pipeline was operated as an independent pipeline, whether it was owned by one of the state's major oil and gas lease holders or an independent company.

The AP reporters called that process "flawed" and linked it to an alleged conflict of interest by a Palin administration staff member.

The AP reporters said Palin had been warned, including twice by Vice President Dick Cheney, to bring in the oil producers to the pipeline project. On Alaska's North Slope, Exxon Mobil Corp., BP and ConocoPhillips Co. produce the bulk of the state's oil and hold most of its discovered gas reserves.

The Legislature nearly unanimously established rules that required an independently operated pipeline, but allowed the producers to submit their own bid under terms resembling an independent pipeline.

The AP reporters said seeking an independent pipeline ultimately favored TransCanada and excluded the producers, which was why the process was flawed.

Sen. Gene Therriault, R-North Pole, Senate minority leader, called the story "way off base."

"We just wanted the attributes of an independently operated pipeline company, one that would protect the interests of Alaska," he said.

The Legislature spent much of the summer in special session, considering and rejecting those arguments, Therriault and Wielechowski said.

"The producers having complete control of the oil pipeline has cost the state of Alaska billions of dollars over the years; that's a fact. We've had less exploration and less drilling on the North Slope because the smaller independents have been squeezed out and because they can't pay exorbitant tariffs," Wielechowski said.

The AP story quoted only two legislators, Senate President Lyda Green, R-Wasilla, and Sen. Bert Stedman, R-Sitka, both in the minority who voted against the TransCanada deal.

Juneau Rep. Beth Kerttula said AP reporter Burke talked with her, but didn't include her defense of Palin.

"I don't believe Gov. Palin should become vice president, but I don't think this story was fair and accurate," she said.

Wielechowski called it a "hit piece" on Palin's record on the gas pipeline.

The story said the oil companies were unhappy that Palin did not support their request for 45-year tax and royalty freezes but didn't say that Palin and most legislators think that is not allowed under the Alaska Constitution.

The AP reporters also claimed the head of Palin's gas pipeline team, Deputy Commissioner Marty Rutherford of the Department of Natural Resources, may have had a conflict of interest. Under the label "ties that bind" they reported that Rutherford had in 2003 left government service to briefly work for a lobbying firm, Jade North, that later handled the TransCanada application. She soon returned to state employment.

The AP story said that was something "the Palin administration didn't tell legislators."

Therriault and others disputed that, and said that was well known to legislators.

"Marty Rutherford's limited involvement with Jade North was discussed in committee," he said.

Kerttula said that not only was Rutherford's past employment well known, it was years ago and did not amount to a conflict of interest.

"I'm really unhappy about it," she said. "It made me feel kind of sick to my stomach to see Marty Rutherford get accused" of a conflict of interest.

Juneau Sen. Kim Elton, a strong supporter of Barack Obama, questioned why the AP blamed Palin for actions that he and the majority of legislators supported.

"It wasn't something that hadn't been carefully discussed and vetted," he said.

The AP reporters, he said, apparently "parachuted in here" and jumped to a conclusion without adequate research.

Therriault said he was surprised to hear allegations that TransCanada was favored. Earlier there had been allegations that Mid-American Energy Holdings, a company owned by Warren Buffet, was favored to win the contract.

"During the debate there were lots of assertions that this was written for Mid-American," he said.

Alaska-based AP reporters who could have filled in gaps in the story seem not to have been consulted. Requests for comment from AP were either not responded to or referred to a corporate communications officer in New York who was unavailable.

The story has had wide circulation nationally and internationally. In Alaska it has run in the Fairbanks News-Miner and the Juneau Empire, the state's second and third largest papers, though not in the Anchorage Daily News, the state's largest paper.

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