Peter Galbrait, former State Department Official and
former U.S. ambassador to Croatia (Left)
Document reproduced by Dagens Næringsliv showing
Peter Galbraith signing as manager for the Porcupine
company that supposedly owned 5 per cent of the
Tawke oil field from 2004 to 2008. Photo: historiae
org
Diplomatic Corruption
New DNO Revelations: While He Was Influencing the
Shape of the Iraqi Constitution, Peter Galbraith
Held Stakes in an Oilfield in Duhok
October
12, 2009
It is widely known that the former US diplomat Peter
Galbraith has been one of the most prominent figures
in shaping the state structure of Iraq in the period
after 2003, especially with his vocal advocacy of
various forms of radical decentralisation and/or
partition solutions for Iraq’s political problems
that are reflected in his books and numerous
articles in the New York Review of Books, especially
in the period from 2004 to 2008. Until now, though,
it has generally been assumed that Galbraith’s
fervent pro-partition propaganda was rooted in an
ideological belief in national self-determination
and a principled view of radical federalism as the
best option for Iraq’s Kurds. Many have highlighted
Galbraith’s experience as a former US diplomat
(especially in the Balkans in the 1990s) as key
elements of his academic and policy-making
credentials.
Today, however, it has emerged that the realities
were probably rather different. For some time,
Norway’s most respected financial newspaper, Dagens
Næringsliv (DN), has been focusing on the operations
of DNO, a small Norwegian private oil company in
Kurdistan, especially reporting on unclear aspects
concerning share ownership and its contractual
partnerships related to the Tawke field in the Duhok
governorate. One particular goal has been to
establish the identity of a hitherto unknown “third
party” which participated with DNO in the initial
production sharing agreement (PSA) for Tawke between
2004 and 2008,www.ekurd.netbut
was squeezed out when this deal was converted to a
new contract in early 2008, prompting a huge
financial claim of around 500 million US dollars
against DNO which has yet to be settled.
Today, DN claims to present proof that one of the
two major “mystery stake-holders” involved in the
claim was none other than Peter Galbraith, who
allegedly held a five-percent share in the PSA for
Tawke from June 2004 until 2008 through his
Delaware-based company Porcupine. Galbraith’s
partner was the Yemenite multi-millionaire Shahir
Abd al-Haqq, whose identity was revealed by the same
newspaper earlier this month. DN has published
documents from Porcupine showing Galbraith’s
personal signature, and today’s reports are complete
with paparazzi photographs of Galbraith literally
running away from reporters as they confront him in
Bergen, where he is currently staying with his
Norwegian wife. He refused to give any comment
citing potential legal complications.
If proven correct, the implications of this
revelation are so enormous that the story is almost
unbelievable. As is well known, DNO has been
criticised for the way its operations in the
Kurdistan region interfere with Iraq’s
constitutional process. To their credit, though, DNO
are at the very least perfectly forthright about
their mission in the area: They are a commercial
enterprise set up to make a maximum profit in a
high-risk area currently transitioning from
conditions of war.
Galbraith, however, was
almost universally seen as “Ambassador Galbraith”,
the statesmanlike former diplomat whose outspoken
ideas about post-2003 Iraq were always believed to
be rooted in idealism and never in anything else.
Instead, it now emerges, he apparently wore several
hats at the same time, and mixed his roles in ways
that seem entirely incompatible with the capacity of
an independent adviser on constitutional affairs.
It can be useful to briefly recapitulate the extent
of Galbraith’s involvement in creating the
institutions of government in the “new Iraq”. In
fact, the best guide to this subject is Galbraith
himself, who recounted his own role in the book The
End of Iraq, published in 2006. It seems clear he
got involved on the Kurdish side early on in 2003:
“Two weeks after Saddam’s fall, I began discussions
with the Kurdish leaders on the future of Kurdistan
and what they could achieve in the new Iraqi
constitution (italics added, p.159)”. Supposedly,
according to a later book by Galbraith, he was at
this point a consultant for ABC News! Later, he
appears to have been a regular consultant for the
Kurds. While his various books only make vague
acknowledgement as far as payment is concerned (“for
a few months at the end of 2003 and the beginning of
2004 I did some compensated work for Kurdish
clients”, and in the second book from 2008 there is
reference to unspecified “corporate clients with
several of which I have an ongoing business
relationship”), it seems pretty clear from the
narrative in the book that at least some of this
refers to consultancy work for the Kurdish political
leaders in the period leading up to the drafting of
the Transitional Administrative Law (TAL) which was
adopted in March 2004.
It is Galbraith’s description of the period between
2003 and 2005 that provides the fullest account of
his influence on Iraq’s current system of
government. Two key principles of the 2005
constitution – the idea that residual powers belong
to the provinces and not to the central government,
as well as the supremacy accorded to local law over
federal law – stand out in particular. In many
centralised states (and indeed even in certain
federations), powers not explicitly granted to the
regions belong to the centre. In Iraq’s constitution
of 2005 it is the other way around, and the list of
central government powers is hilariously short when
compared to other federations of the world. This, it
seems, comes directly from Galbraith and his
influences on the Kurdish leadership back in 2003
and 2004. According to Galbraith, “after I left Iraq
in May 2003, I realised that the Kurdish leaders had
a conceptual problem in planning for a federal Iraq.
They were thinking in terms of devolution of power –
meaning that Baghdad grants them rights. I urged
that the equation be reversed. In a memo I sent
Barham [Salih] and Nechirvan [Barzani] in August,www.ekurd.netI
drew a distinction between the previous autonomy
proposals and federalism: ‘Federalism is a
“bottom-up” system. The basic organising unit of the
country is the province or state. The state or
province is constituted first and then delegates
certain powers (of its choice) to the central
government…In a federal system residual power lies
with the federal unit (i.e. state or province);
under an autonomy system it rests with the central
government. The central government has no ability to
revoke a federal status or power’…Finally I wrote
…'any conflict between laws of Kurdistan and the
laws or constitution of Iraq shall be decided in
favour of the former' (160–61).”
Later, Galbraith urged the Kurds to be maximalist
about their demands: “The Bush administration might
not like the Kurds insisting on their rights, I
said, but it would respect them for doing so (163)”.
Then, leading up to the TAL negotiations in the
winter of 2004, Galbraith worked specifically for
the Kurds in framing their demands. It is very easy
to see how the Kurdish gains in the TAL and not
least in the 2005 constitution are based on this
contribution from Galbraith. Galbraith writes, “On
February 10 [2004], Nechirvan [Barzani] convened a
meeting at the Kurdistan national assembly of the
top leaders of the PUK and KDP. I presented a draft
of a ‘Kurdistan chapter’ to be included in the
interim constitution [i.e. the TAL]… Except for a
few matters assigned to the federal government
(notably foreign affairs), laws passed by the
Kurdistan national assembly would be supreme within
the region. The Kurdistan Regional Government could
establish an armed force…The Kurdistan Region would
own its land, water, minerals and oil. Kurdistan
would manage future oil fields (and keep revenues)
but the federal government in Baghdad would continue
to manage all oil fields currently in commercial
production. Because there were no commercial oil
fields within Kurdistan as defined by the March 18,
2003 boundaries, this proposal had the effect of
giving Kurdistan full control over its own oil…The
permanent constitution of Iraq would apply in
Kurdistan only if it were approved by a majority of
Kurdistan’s voters (166–67).” Subsequent
achievements noted by Galbraith as personal
successes include staging the informal 2005
referendum on Kurdish independence (171).
The influence of Galbraith can be discerned already
in the 2004 Transitional Administrative Law (where
the principle of residual powers for the provincial
entities was put in place), even if Galbraith was
dissatisfied with the relatively long list of powers
accorded to Baghdad and blamed the “centralising”
policies of Paul Bremer and the Bush administration
generally for this “defect”. But his hand is even
more evident in the 2005 constitution, which
combines residual powers for the regions with the
supremacy of local law (albeit not if it contradicts
the constitution, a “shortcoming” Galbraith later
tried to gloss over), and which also specifically
mentions the regional right to local armed forces.
The narrative in Galbraith’s books turns somewhat
weaker in this period, and it is less clear exactly
how he continued to exercise influence – apparently
less directly now, and more through the general
advice on federalism given to the Kurds earlier. But
at one revealing point in the book, he clearly
cannot resist the urge to reveal just how
influential he was until the very last minute of the
constitutional process in 2005. On page 199, in a
footnote, he writes, “A British treasury official
serving as an advisor to his country’s embassy
nearly derailed the constitution two hours before
the final deadline. He was reading an English
translation being made as drafts of the Arabic text
became available, and realised the federal
government had no tax power. He was about to charge
into a meeting of Iraq’s political leaders when a
quick-thinking Kurdish constitutional advisor
grabbed an available Westerner – me – to explain the
situation. The omission, I told him, was no mistake
and he might want to consult with his ambassador
before reopening an issue that could bring down
Iraq’s delicate compromise”.
Almost drunk with success, it seems, and probably
truly convinced that Iraq was heading for breakup,
Galbraith could not disguise his satisfaction.
Indeed, with the new information about his supposed
economic interests, the way he engaged on specific
issues relating to oil in the US public debate at
this fateful point of transition seems utterly
reckless. In August 2005, during the final
negotiations, while he appeared to be satisfied with
the way the new constitution developed as far as
decentralisation was concerned, he did voice
scepticism to growing Islamic influences in the new
document and at one point considered the alternative
of an overhaul of the TAL to make the regions
stronger in that charter instead. He wrote again in
the New York Review of Books,www.ekurd.netthis
time stressing how “the Kurdish leaders would accept
its [i.e. the TAL's] continuation provided the text
was clarified to assure Kurdistan's ownership of
petroleum in the region and if the status of the
disputed region of Kirkuk were resolved (italics
added)”. He also expressed hope that “oil contracts
made by the Kurdistan government” (one of the few at
that time was of course Tawke, to which Galbraith
now has been linked through the PSA) could be
exempted from general federal control through
separate bilateral agreements between Baghdad and
Erbil.
As for the ramifications of these revelations, when
they become known in Baghdad, it is really hard to
predict. There has been a myriad of conspiracy
theories concerning secret schemes to partition
Iraq; while most of them are probably exaggerated
the Tawke saga seems to be the most explicit
intersection yet of international capitalism and
advocacy of a divided Iraq, embodied in Peter
Galbraith through his dual role as an alleged
stake-holder in the Tawke oilfield and intellectual
advocate of Kurdish secession from Iraq. While he
was advising the Kurds on the principles of
federalism and trying to persuade an American
Democratic audience about the virtues of partition
as an alternative to the Bush administration
policies in Iraq, Galbraith supposedly held a 5 per
cent stake in an oil field whose profit potential
was directly governed by the constitutional and US
policy decisions Galbraith was seeking to influence
(his suggestions also included the idea of a
permanent US airbase in Kurdistan). Under any
circumstances, this new development is likely to
strengthen the tendency among Iraqis to be more
critical about the details of the 2005 constitution
and not least the historical context in which it was
conceived – a criticism that even Prime Minister
Nuri al-Maliki articulated during the run-up to the
last local elections. Seemingly, Maliki’s ideas of
rectifying this towards greater centralism (i.e.
removing some of Galbraith’s pet projects from 2005)
have met with success among voters so far.
Another problem related to this issue is the close
association in the past between Galbraith and the
apparent Iraq tsar of the current Obama
administration, Vice-President Joe Biden. The two
often supported each other loyally, even as late as
in the autumn of 2008, when Galbraith described
Biden’s candidacy for vice-president as “very
encouraging” because he “has been the prime
proponent of a decentralized Iraq”. Of course,
Biden’s own initiatives to move towards a soft
partition of Iraq, though not as radical as
Galbraith’s ones, were the dominant feature of
“alternative” Iraq proposals in the US debate in the
period between 2005 and 2008, although they are not
believed to be favoured by President Obama. At one
point in the summer of 2008, other Democratic
senators including Chuck Schumer weighed in on this
issue with specific reference to oil, warning
Baghdad not to enter into any agreements with
foreign companies to ramp up production until there
had been an agreement with the Kurds, thereby also
perpetuating the anti-centralisation oil policy to
which Galbraith had contributed at a time when he is
believed to have been a stake-holder in the Tawke
field. David Brooks, an influential New York Times
columnist, declared him "the smartest and most
devastating" of the critics of the Iraq policies of
George W. Bush.
It is of course somewhat ironic that these
revelations should come at a time when Galbraith
seems to possess the high moral ground in another
controversy also involving Norwegians and Middle
Eastern conflicts: The ongoing dispute with UN
diplomat Kai Eide over Afghanistan’s elections
result. In that case one can get the impression that
Galbraith is standing up in the name of
transparency, while Eide is taking a line so
pragmatic that it may ultimately serve to divert
attention from widespread electoral fraud.
Copyright, respective author or news agency,
historiae org
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