Adviser Sees No Conflict In Kurdish Oil Deals

Former U.S. diplomat Peter Galbraith i i

Former U.S. diplomat Peter Galbraith, shown here in 2007, is a longtime adviser to ethnic Kurdish leaders in Iraq. Galbraith is defending himself against accusations of a conflict of interest over a business deal he made with a Norwegian oil firm. Tony Talbot/AP hide caption

itoggle caption Tony Talbot/AP
Former U.S. diplomat Peter Galbraith

Former U.S. diplomat Peter Galbraith, shown here in 2007, is a longtime adviser to ethnic Kurdish leaders in Iraq. Galbraith is defending himself against accusations of a conflict of interest over a business deal he made with a Norwegian oil firm.

Tony Talbot/AP

Peter Galbraith, a former U.S. diplomat and longtime adviser to ethnic Kurdish leaders in Iraq, is defending himself against accusations of a conflict of interest over a business deal he made with a Norwegian oil firm.

Iraqi officials have criticized Galbraith for having a financial stake in Kurdish oil because he served as an unpaid adviser to the Kurdish regional government while it was involved in negotiations over the drafting of a new Iraqi Constitution. The Kurds control parts of oil-rich northern Iraq, also known as Kurdistan.

In an interview with NPR's All Things Considered, Galbraith acknowledged having a financial arrangement with DNO, a Norwegian oil company that has a stake in a promising oil field in Kurdistan, but denied any conflict of interest.

"When I was asked by them to advise them on the constitutional negotiations in 2005, they knew that I was being paid by DNO and by, in fact, other clients," Galbraith told co-host Melissa Block. "They knew of my business activities. They sought my advice anyhow."

He added, "There is no conflict between the role and help I provided to the Kurds on what was their agenda, not my agenda, and the work I did helping to create an oil industry in Kurdistan."

The New York Times reported Wednesday that Galbraith received rights to a large stake in at least one Kurdish oil field in 2004 after helping DNO negotiate a lucrative drilling contract. Galbraith told the paper that he maintained an "ongoing business relationship" with the company throughout the constitutional negotiations in 2005 and later.

Reidar Visser, a research fellow at the Norwegian Institute of International Affairs, has been following the developments since the Norwegian newspaper Dagens Naeringsliv first reported the business arrangement last month.

"That is new, the fact that he actually received payment from a Norwegian company at the same time that he was sitting in on key sessions related to the drafting of the Iraqi Constitution, from which, in fact, many Iraqi politicians were excluded," Visser told NPR's Michele Kelemen. "But Galbraith participated, with his ownership share, and that is quite scandalous, certainly if you look at this from an Iraqi point of view."

The draft constitution that Galbraith was helping with included provisions that he and Kurdish officials argue gives control of oil finds in Kurdistan to Kurdish leaders rather than to the central government in Baghdad.

Galbraith told NPR that he did not have an official role in the drafting of the constitution and that he was a private citizen at the time.

"I want to emphasize that I myself did not participate in the negotiations," Galbraith said. "I wasn't a negotiator. I provided advice to people who knew I had business interests."

The oil field, which is in the Dohuk region of Kurdistan, has proven reserves of about 230 million barrels, and The New York Times estimated that Galbraith's stake could be worth more than $100 million.

Galbraith said that he could not provide any details of his arrangement because of a confidentiality agreement, but he disputed the estimate of its value.

"I wished it were true," Galbraith said.

He did acknowledge a dispute over what he calls his "business arrangement."

"There's an arbitration that's under way in London," he told NPR. "It's a confidential process. The first round has been concluded, and now the arbitration is looking at damages."

Galbraith, 58, son of the prominent 20th century economist John Kenneth Galbraith, served for many years on the staff of the Senate Foreign Relations Committee, and from 1993 to 1998 as U.S. ambassador to Croatia.

He has also been in the news recently because of his role in Afghanistan. Peter Galbraith was fired in September from a senior post at the United Nations mission there after accusing his boss of ignoring fraud in Afghanistan's recent troubled presidential election.

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