Audit Clears State Department In Keystone Pipeline Review WASHINGTON - The State Department's internal watchdog has cleared the agency of any impropriety in its review of a permit for a controversial pipeline that that would carry Canadian oil across the continental United States. In a report released to Congress on Thursday, the department's inspector general said it found no evidence that State Department employees were improperly influenced by proponents of the Keystone XL pipeline, including the applicant TransCanada. Opponents of the pipeline, which was ultimately rejected by President Obama after a bitter political battle with congressional Republicans, had alleged that TransCanada had an inappropriately cozy relationship with some State Department employees conducting the review, which included an environmental impact statement. The inspector general "determined that the department did not violate its role as an unbiased oversight agency," the report said. It "found no evidence that communications between department officials, TransCanada, the Canadian government, proponents, and opponents of Keystone XL deviated from the department's obligations under federal law," it said. Specifically, no records existed showing that department officials had made inappropriate commitments on behalf of the department to TransCanada or to the Canadian Government. The report said the department had fully complied with its responsibilities in conducting the review and had incorporated relevant concerns from other federal agencies but expressed concern that its limited resources and expertise impacted the process.