Adviser Sees No Conflict In Kurdish Oil Deals Former U.S. diplomat Peter Galbraith talks to Melissa Block about accusations of conflicts of interest when he advised the Kurdish government about the drafting of Iraq's Constitution. He says that when he entered a business relationship with a Norwegian oil company, the Kurds knew about the relationship, and there was no conflict of interest.

Adviser Sees No Conflict In Kurdish Oil Deals

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An American diplomats business interests in the oil fields of Kurdistan landed him on the front page of todays New York Times. Peter Galbraith is an influential player in diplomatic circles. Hes a former U.S. ambassador to Croatia, but hes probably best known for his long advocacy on behalf of the Kurds in Iraq. Most recently, he made news when he was fired by the U.N. special representative in Afghanistan.

Galbraith was an adviser to Iraqs Kurds as they pushed for autonomy under Iraqs new constitution and won control of their oil fields. Its now been revealed, first by a Norwegian newspaper, that Galbraith also had a stake in a Norwegian oil company, DNO, that struck oil in a Kurdish field in 2005. And thats raised questions about a conflict of interest, since he would benefit handsomely from oil profits under constitutional language that he helped draft. The New York Times says Galbraiths stake could amount to $100 million or more. And Peter Galbraith joins us to talk about this. Thanks for being with us.

Ambassador PETER GALBRAITH (Adviser): Good to be with you.

BLOCK: And Ambassador Galbraith, the criticism here, as you know, is that at the same time that you were advising the Kurds pushing for their autonomy for control of the oil fields, you also had a financial stake in that through your connection with this oil company DNO.

Amb. GALBRAITH: Yes, but there was no conflict of interest here. First, the positions that the Kurds wanted were their positions. Incidentally, they put them forward and I helped in the drafting of the document in February of 2004. That was before there was any discussion of any business 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, in fact, other clients. So they knew of my business activities. They sought my advice anyhow.

And let me also be clear that what I did in the business field and what they wanted politically were 100 percent (unintelligible). They wanted autonomy. They wanted control over their natural resources. They wanted to have an oil industry in Kurdistan, and I helped them on all those things, but this was their choice of agenda, not mine.

BLOCK: Well, there was reaction today in The New York Times from some Iraqis who were not pleased by this news. The vice chair of the oil and gas committee in the Iraqi parliament said your interference was not justified, illegal and not right. Your financial interests have been merged with the political interest. How do you respond to that?

Amb. GALBRAITH: Well, again, the activity in question was simply to offer advice on constitutional issues to a party in the negotiations. I want to emphasize that I myself did not participate in the negotiations. I wasnt a negotiator. I provided advice to people who knew that I had business interest.

BLOCK: And Ambassador Galbraith, youve been on our program many times before, youve published many op-eds, youve written books, why not disclose your business ties before this, put this out in the open, if it is so benign, as you say.

Amb. GALBRAITH: Well, its obviously quite common for people to be in government, to be in private business. And it is the nature of private business that the precise arrangements are often confidential and indeed some of my arrangements were subject to confidentiality agreements. But I did disclose that I was in business and that I had corporate clients with interest in Iraq. So, I think people did know that I had these interests.

BLOCK: And Ambassador Galbraith, do you see how this business connection, your connection with the oil company in Kurdistan, would fuel the anger that U.S. interests in Iraq are purely about oil and about profit?

Amb. GALBRAITH: Well, I can understand that there would be politicians that would want to use that as part of their debate with the Kurds. But, frankly, I was a private citizen at the time. I had no role in the U.S. - with the U.S. government. The U.S. government did not in any way facilitate any of my visits to Iraq. So, I was like many other former government officials who have become private citizens and who and generally the practice - do not disclose what clients they may have in their business activities.

BLOCK: Peter Galbraith, thank you for talking with us.

Amb. GALBRAITH: Very good talking with you.

BLOCK: Peter Galbraith is a former diplomat and long-time adviser to the Iraqi Kurds. He faces accusations of conflict of interests because of his financial dealings in Iraqi Kurdistan.

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