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Former US diplomat Peter Galbraith denies
oil dealings influenced views
15.10.2009
By Farah Stockman
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Peter Galbraith said his business dealings in
Kurdistan are not a conflict of interest because he
was a private citizen. Galbraith helped Iraqi Kurds
keep rights to fields.
October
15, 2009
WASHINGTON, — Peter Galbraith, a former
American diplomat who has been among the most
forceful advocates for Iraqi Kurds to retain control
over the oil in their region, acknowledged yesterday
that he has had business dealings involving oil
companies in Iraqi Kurdistan since 2004.
But Galbraith, a key adviser to Iraqi Kurdish
politicians who also helped shape US public opinion
on Iraq with his writings, said his business
relationships did not drive his support for the
Kurdish cause, or present a conflict of interest,
because he was working as a private citizen at the
time.
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Peter Galbraith, a former State Department Official and
former U.S. ambassador to Croatia. |
“The business interest,
including my investment into Kurdistan, was
consistent with my political views,’’ he told the
Globe. “These were all things that I was promoting,
and in fact, have brought considerable benefit to
the people of Kurdistan, the Kurdistan oil industry,
and also to shareholders.’’
It is not illegal or unheard of for former US
officials to do business with people they worked
with during their time in government. But ethical
questions often arise when such dealings become
public.
Some analysts said yesterday that Galbraith stood to
gain personally from language that he helped draft
for the Iraqi Constitution when he was advising
Kurdish leaders during negotiations with Iraqi and
US officials in 2005. They said his business ties
should have been publicly disclosed at the time.
“Galbraith has been such a central person to the
shaping of the Iraqi Constitution, far more than I
think most Americans realize,’’ said Reider Visser,
a historian of southern Iraq and who edits the
Iraq-focused website, www.historiae.org. “All those
beautiful ideas about principles of federalism and
local communities having control are really cast in
a different light when the community has an oil
field in its midst and Mr.
Galbraith has a financial
stake.’’
Galbraith said in a telephone interview that Kurdish
leaders knew of his oil interests, but he was not
under any obligation to tell the US and Iraqi
officials involved in the negotiations.
The controversy is the latest twist in a high-stakes
struggle between Iraq’s Kurds and the central
government over oil, the biggest source of the
nation’s wealth. In December, the government plans
to auction 10 undeveloped oil fields believed to
contain reserves worth about $3 trillion at current
prices.
It is also another chapter in the storied life of a
man who has played many powerful roles.
Galbraith, the son of famed Harvard economist John
Kenneth Galbraith, lives in Vermont and mulled a run
for governor there earlier this year. Instead, he
took a job as a top United Nations official in
Afghanistan, but was fired late last month after
accusing his boss of covering up election fraud to
protect President Hamid Karzai.
Iraq has been a main focus of Galbraith’s career.
His ties to Iraqi Kurdistan date back to the 1980s,
when he traveled there as a staffer for the Senate
Foreign Relations Committee to research Saddam
Hussein’s genocidal attacks on Kurds. Galbraith’s
research bolstered support for a US no-fly zone that
allowed Iraqi Kurds to set up their own de facto
government. In 1993,www.ekurd.netGalbraith
was appointed US ambassador to Croatia, where he
became even more deeply convinced that some ethnic
minorities should be allowed to govern their own
affairs.
In late 2002, as the Bush administration began
preparing to invade Iraq, Galbraith worked as a
professor at the Naval War College and gave advice
to then-Deputy Defense Secretary Paul Wolfowitz on
how to handle problems in Kurdistan. But within
months of the invasion, Galbraith left the US
government and became one of its critics.
In speeches, meetings with US officials, and
articles in the New York Review of Books, Galbraith
said Kurds should be given maximum autonomy and
should have the right to develop their own oil
fields, free of control by Iraq’s central
government.
But the same time, Galbraith was quietly entering
into business deals that gave him a financial stake
in the positions he was advocating. In late 2003 and
early 2004, he worked as a paid consultant to
Kurdish politicians, advising them on legal language
they should seek to insert into Iraqi laws to keep
future oil development under their control. Later,
in 2005, he advised them again on an unpaid basis.
On June 23, 2004, Galbraith and his son, Andrew,
registered a Delaware partnership called Porcupine,
which entered into a business arrangement with DNO,
a Norwegian oil company, according to company
documents and a statement recently circulated by
Porcupine.
Two days after Porcupine was established, the
Kurdistan Regional Government signed a contract to
develop Kurdistan’s first oil field with DNO,
ushering in a potential economic windfall for the
semiautonomous region. DNO eventually struck oil,
and currently owns a 55 percent stake in the Tawke
field.
But Iraq’s central government has refused to accept
the legality of its agreement, creating a heated
standoff that has stopped the flow of oil from
Kurdistan in recent days.
Rumors of Galbraith’s financial dealings in Iraq
have swirled for years. But the level of his
involvement was not publicly known until last
weekend, when Dagens Naeringsliv,www.ekurd.netNorway’s
largest business newspaper, reported that Porcupine
was seeking compensation from DNO in a closed-door
arbitration proceeding in London.
Ben Willey, a DNO spokesman, said the company had
been “introduced to the Kurdistan opportunity back
in 2003 and 2004 by a third party’’ he declined to
name. He said the Kurdistan Regional Government gave
that third party a 5 percent stake in the DNO deal
in 2004, but that the contract was renegotiated last
year and “somebody lost out.’’
Now, Willey said, that third party is asking for
compensation from DNO, which is set to export
roughly 43,000 barrels a day from Kurdistan, earning
approximately $30 million annually.
Dagens Naeringsliv, said
that besides Porcupine, a wealthy Yemeni businessman
is also seeking compensation.
Juan Cole, a University of Michigan professor who
closely follows Iraq, said the DNO deal could pose
an ethical problem because Galbraith “played a
significant role’’ in helping to draft
constitutional provisions that gave the Kurds
control over 100 percent of new oil development.
But Galbraith said yesterday his role in the
constitutional negotiations was unpaid and informal,
and therefore he was under no obligation to disclose
his business interests to the US or Iraqi
governments. He also said confidentiality agreements
prevented him from publicly disclosing details of
the business.
Galbraith said he did make a full disclosure to the
UN before his recent job in Afghanistan. A UN
official, however, said he was hired over the
objections of some officials who believed he was too
close to Kurdish leaders seeking to break away from
Iraq, a UN member state.
Copyright, respective author or news agency,
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