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Rendell, Newspaper Criticized for Not Disclosing Industry Ties

ProPublica, a nonprofit corporation that pursues investigative journalism on matters of public interest, is criticizing former Pennsylvania Gov. Ed Rendell and the New York Daily News for failing to disclose Rendell's ties to natural gas-related businesses in a pro-industry editorial.

Last Wednesday, the newspaper published a Rendell editorial that urged New Yorkers, and New York Gov. Andrew Cuomo, to embrace high-volume hydraulic fracturing (HVHF) in their state (see Shale Daily, March 28).

According to ProPublica, Rendell has been paid about $30,000 a year by private equity firm Element Partners since he left office in 2011 (see Shale Daily, Jan. 20, 2011). Element's website discloses that it has an investment with 212 Resources, a company that treats wastewater for the oil and natural gas industry.

New York City-based ProPublica also said Rendell, a Democrat, is a senior adviser to Greenhill & Co. Inc., an investment bank that the organization said has conducted "several large transactions involving natural gas companies."

ProPublica reported Sunday that it interviewed Rendell on the day his editorial appeared. The former governor said he should have disclosed to the Daily News his ties to Element and Greenhill, and that the newspaper should have, in turn, published that disclosure along with his editorial. But he appeared to reject the idea that there was a conflict of interest.

"The only conflict would be if I had a pecuniary interest in the natural gas industry doing well, and I certainly don't," Rendell told ProPublica. "I have no brief for industry."

Kevin Moody, general counsel for the Pennsylvania Independent Oil and Gas Association, told NGI's Shale Daily that Rendell should have disclosed his ties to the industry.

"What he's saying may be technically correct, but I don't think the public is going to see it that way," Moody said Monday. "I think he's trying to downplay [his ties] a little bit."

Shortly after leaving office, Rendell agreed to return to the Philadelphia office of the law firm Ballard Spahr, and was hired by NBC News as a political analyst (see Shale Daily, Jan. 28, 2011).

Pennsylvania's current governor, Tom Corbett, has also been accused of being too cozy with the oil and gas industry. On March 22, John Hanger -- a Democratic candidate for governor in 2014 and, under Rendell, a former secretary of the state Department of Environmental Protection -- accused Corbett of having accepted more than $20,000 in gifts from the industry (see Shale Daily, March 25).

With the future of HVHF in New York in question, Cuomo has started to take a political beating from Republicans, most of whom support fracking for the jobs it would create. Fracking supporters and their GOP allies have also pointed out that while New York continues to debate the issue, Pennsylvania is reaping the economic benefits (see Shale Daily, March 20; Feb. 28).

If New York decides to allow HVHF, development would likely occur in the Southern Tier, in counties along on or near the Pennsylvania border. Last June, Cuomo administration officials hinted that HVHF could first be allowed in five Southern Tier counties -- Broome, Chemung, Chenango, Steuben and Tioga -- which overlie the Marcellus Shale (see Shale Daily, June 14, 2012). Cortland, Otsego and Tompkins counties are also believed to contain significant shale deposits.

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