Home Dominion Power Three-Time Sellout: Terry McAuliffe’s Secret Mountain Valley Pipeline Deals and The Smoking...

Three-Time Sellout: Terry McAuliffe’s Secret Mountain Valley Pipeline Deals and The Smoking Gun They Reveal

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by Jon Sokolow

On Friday, February 2, we published “Secret Sellout or Pay to Play?,” a Blue Virginia exclusive.  Our article exposed what until then in Virginia had been a secret Memorandum of Understanding signed in December by the administration of then Governor Terry McAuliffe with political power broker Dominion Energy regarding the Atlantic Coast Pipeline.  As we explained, in return for a payoff of $58 million (paid to various entities), Terry McAuliffe gave Dominion a full and complete release from any and all damage to Virginia’s forests and water from the Atlantic Coast Pipeline” and he did so before the pipeline has even been approved – it still has not been approved – much less built.”

We also showed that Dominion’s $58 million payoffis exactly what it looks like – a good old fashion pay-to-play scheme – exactly like the one now being roundly criticized, even by pipeline supporters, in neighboring North Carolina.”

Since the Blue Virginia article, which you can read here, appeared, more than 18,000 people have read about the sickening details of the Dominion deal.  Governor Ralph Northam’s Communications Director Brian Coy (who also held that position with Terry McAuliffe) was forced to take to Twitter to deny the story, which he did simply by ignoring what the agreement actually said. And he fed the same untruth to an Associated Press reporter.  When he was asked to address the exact language in the agreement, Northam’s spokesman went quiet.

But Friday’s Blue Virginia piece was only half of the story.

It turns out the full story is much worse.

Because we now know that McAuliffe made not one, not two, but three secret pipeline agreements in late December.  A second agreement, which Blue Virginia is now publishing here exclusively for the first time (see below), gives the builders of the Mountain Valley Pipeline the same full waivers for damage to Virginia’s forests and water resources as were given to the ACP.  For only $27.5 million – that’s all Terry McAuliffe thought our natural heritage in the affected counties was worth – the MVP companies bought their way out of any further responsibility for any damage that their $3.5 billion pipeline may cause to Virginia’s forests and water resources:  Paragraph 2 – the forest damage payoff “fully satisfies any and all mitigation responsibilities related to and otherwise fully offsets the direct or indirect forest-related impacts of the Project in Virginia;” Paragraph 3(a)(i) – the water resource damage payoff “fully satisfies any and all mitigation responsibilities related to and otherwise fully offsets all water quality impacts of the Project.”

A third secret agreement, which we also now publish here exclusively (also see below), concedes that the Mountain Valley Pipeline “will result in an adverse effect to historic properties” and has the MVP companies paying $2.5 million (possibly a bit more) in return for – you guessed it – a full release from any future responsibility.

But that’s not even the worst part of this story.

For anyone who cares about clean and transparent government, for anyone troubled by the outsized influence Dominion Energy has over politics – and politicians – in Virginia, you need to sit down and take a deep, deep breath.

Because the real scandal is what the Mountain Valley agreements, both signed on December 22, tell us about the Atlantic Coast Pipeline agreement that was signed six days later, on December 28. 

And what they tell us is this:

Terry McAuliffe sold Virginia’s permit approval for the Atlantic Coast Pipeline for $58 million in a blatant pay-to-play scheme. 

Smoking guns are like unicorns – often discussed but rarely seen.  But in this case, the smoking gun is right there, hiding in plain sight.  All you have to do is read these three agreements side by side.

The December 28 ACP agreement was, in most respects, modeled on the two December 22 MVP agreements.  All three agreements start with a series of “Recitals,” followed by “Agreement” paragraphs.  In content and style, the three documents are largely the same, except where the details specific to each deal are discussed.

But there is one huge difference. 

Both Mountain Valley Agreements – but not the ACP agreement – contain express denials that the payments being made were in exchange for regulatory approval:

No Guaranty of Regulatory Approvals. For clarity, this Agreement provides no guaranty, right or entitlement of any kind that the Commonwealth (including any of its administrative agencies or other instrumentalities) will grant any or all required permits, certifications, consents, authorizations or other approvals of any kind that may be required for the Project (the “State Approvals”). Any required State Approvals shall be an entirely separate matter to be considered by the relevant authorities in full compliance with applicable laws and regulations.

Recital G, MOU for Comprehensive Mitigation of Virginia Resource Impacts of MVP.

Now, to be sure, these “guarantees” in the Mountain Valley deals were more a fig leaf than anything else.  By December 22, when the MVP agreements were signed, the Virginia State Water Control Board already had given its crucial unconditional approval – that happened on December 7.  So the “guarantees” were largely meaningless.

In contrast, the Atlantic Coast Pipeline had not received unconditional final approval from the Water Control Board by 12/28, when that agreement was signed, and it still has not received that approval.  But when it came time to sign the ACP deal, the “no guarantee of regulatory approvals” provisions had disappeared, as if by magic – the same magic that creates those rarely seen unicorns.

Absent was any assurance that Dominion’s $58 million payoff provided “no guaranty…that the Commonwealth…will grant any or all required permits.”

Gone was the statement that “any required State Approvals shall be an entirely separate matter to be considered by the relevant authorities.”

Think about that for a second.

Terry McAuliffe refused to tell Dominion what he had just told the MVP companies six days earlier – that the payments provided no guarantee that the ACP would be approved and that the permit process “shall be an entirely separate matter.” 

Instead, Terry McAuliffe gave Dominion exactly what it wanted: a “guarantee” that Virginia would approve the ACP in return for a payoff.  McAuliffe sold Virginia forests and water – and worse, he sold the State’s permitting process – to Dominion for $58 million.

Perhaps this is not surprising.  McAuliffe, after all, is a longtime pipeline cheerleader who has a well-deserved reputation for never having met a dollar bill he didn’t love.  But surprising or not, selling a permit to Dominion, a lavish contributor to politicians (including McAuliffe) in both political parties, is exactly why people do not trust politicians these days to actually represent their interests.

We now know three of Terry McAuliffe’s dirty little secrets. There likely are others.  What we don’t know is this: did McAuliffe offer to delete the “no guarantee of regulatory approval” provisions to induce Dominion to cough up $58 million, or did Dominion demand that concession in return for its payment? And we don’t know what Ralph Northam knew and when he knew it, or who else was involved.

Fortunately, Virginia’s Freedom of Information Act allows any citizen to get access to any public record.  This would include emails, draft agreements, telephone logs, notes, visitor logs, and calendars of any public official or employee involved in drafting or discussing these three agreements.  If just a small fraction of the 18,000 people who have read Blue Virginia’s original story file FOIA requests, we can find out answers to all of these questions and more.

But FOIA requests will not answer the most important questions of all.  Will Governor Northam allow these agreements to stand?  Will members of the Virginia’s legislature – regardless of where they stand on the pipeline – tolerate these taxpayer-funded, corporate welfare rip-offs?

For every elected official in Virginia, the simple question is this:  Which side are you on?

MVP Comprehensive Resource Impacts Agreement by Lowell Feld on Scribd

MVP Historic Resources Agreement by Lowell Feld on Scribd

  • RobertColgan

    This so reminds me of former Pennsylvania DEP chair John Hanger’s decision to permit fracking in PA without first having environmental oversight such as an Impact Study because Hanger personally believed that natural gas was better for the environment than coal. (Scientists disagreed because of the immense greenhouse gas threat it poses.)
    Yet his role as Secretary of the DEP meant that his beliefs were not the criteria for that decision and he acted unilaterally, unwarrantedly without first consulting the people in the shale play areas and the Legislature.

    McAuliffe may have been guided by similar belief when he endorsed that pay to play for pipeline and energy company domain in VA. . . . .and without serious scientific oversight evaluation his decision does NOT honor the people of Virginia whose lives, lifestyles, health, and that of future generations are the true issue here: not corporate rights, but the rights of the people.

    McAuliffe may have done this based on what he thought was best for Virginia——-but as a populist Democrat politician, he knew, or should have known damn well that this was NOT HIS decision to make without first disclosing full details the terms of the contract to the people, without having FULL citizen input, including qualitative analysis such as an Environmental Impact Study to determine both short and long-term risk and to provide clear data for Virginians to assess so that THEY, not he alone regardless his titled position, have the final say on a matter regarding their energy and health future.

    • dirich

      Let’s make sure we don’t give McAuliffe any excuses…nor Molly Ward. Sorry Dems they are.

    • autmwnd

      Populist?? YFKM! He has shown he is anything but a populist.

      • Agreed; there was nothing populist about TMac; he was corporate all the way.

  • dirich

    The question is whether Northam has any backbone. I fear not.

    • autmwnd

      Hear,hear.

  • Jason Rylander

    Another question, why is Dominion-backed David Paylor apparently still chair of DEQ?

  • Video: Del. Sam Rasoul on “Bombshell Revelation” About Pipelines, “Immunity”

    https://www.youtube.com/watch?v=D4JswRr0hHg