In short, D is too strong. The author does not conclude that any project favored by Mayor Smith should be sanctioned. We are talking specifically about the nuclear plant at Littletown. Also, D misses part of the argument. The author is not persuaded only by Mayor Smith's support for the project. It was her previous opposition to nuclear power that is critical to the argument.
In general, we need to focus on the argument itself rather than the person making it. No facts are presented in support of this project other than the fact that Mayor Smith endorses it. This is why E is the correct answer. Determining the validity of an argument based only on the person making it is a common logical error on the test.