Friday, November 13, 2009

The Gall of Peter Galbraith

Is Peter Galbraith a corrupt thug?

Even if he's not, he sure sounds like one to me, judging from this account in Vermont's Rutland Herald. The ex-US official appears insensitive to the appearance of corruption, as well as unapologetic about reports in yesterday's front-page NY Times article that he stands to gain over $100 million from oil deals between Kurdistan and a Norwegian oil company:
He said he had done nothing wrong and didn't have a conflict of interest by having business and political dealings with the Kurds. "It was a straightforward business transaction," he said.

The New York Times estimated that Galbraith's oil interests in Kurdistan could net him more than $120 million, a figure that Galbraith disputed. "These numbers, I wish they were true," he said.

Galbraith said he had left his work for the Senate Foreign Relations Committee and was working as a private citizen when he started working for the Norwegian oil firm DNO in 2004.

Later, in August 2005, Galbraith said, the Kurds, knowing of his relationship with DNO, asked him to advise them as Iraq wrote its constitution, which dealt in part withon how to divide its oil wealth.

"I was not a negotiator. I gave them advice," he said.

Galbraith said he had always been supportive of Kurdistan's self-determination, which meant having control over its oil fields and establishing a Kurdish oil industry. Kurdistan is the northern, oil-rich section of Iraq.

His positions have always been "congruent," he said, that Kurds should control their own natural resources.

He said the news of his Kurdish oil interests had first been made public a week after he was dismissed by the U.N. and the stories first surfaced in Norway and were later picked up by American press.

He said he had no proof that it was payback for his criticism of Eide, a top ranking Norwegian diplomat, but he was suspicious about the news of the Kurdish oil interests first becoming public a week later. "I can't prove anything," he said.

Galbraith was speaking to a sympathetic audience: the Windham World Affairs Council of Vermont. He has spoken to the organization for the past seven years in the fall, he said.

He had no plans to address them this fall until he lost his diplomatic posting in Afghanistan over his criticism of the fraudulent elections in that country.

Galbraith, who spoke for more than an hour about the situation in Afghanistan and Pakistan, later answered questions from the audience. Of the 50 or so questions, only a handful dealt with Thursday's Times article.

But Galbraith said he had hoped to defend himself to his "friends and neighbors," and said that the financial estimates used by the Times were grossly overstated.

As an example of other mistakes he cited in "These numbers — I wish they were true," he said. The Times estimated that Galbraith stood to reap about $120 million from the 5 percent interest he held in a Kurdish oil field.
There's a similar account in the Brattleboro Reformer.

Blogger SouthFloridaLawyers says Galbraith sounds "almost...pathological":
Galbraith's defense was basically that there is no conflict -- his investments in Kurdish Oil are entirely consistent with his advocacy of Kurdish autonomy and control over their oil fields.

I couldn't help but think how disingenuous this is, and how often we see this in legal briefs nowadays.

Remember in law school how there was some loose governing feature which reigned in absurd or ridiculous arguments -- the "red face" test. You just weren't supposed to make an argument that you knew yourself was preposterous.

Yet Galbraith did just that -- the issue was not whether he personally has an inner conflict between his business investments and his public advocacy. That has nothing to do with anything.

The issue is whether it was unethical for Galbraith to pretend to be an "independent expert" and hold himself out as a disinterested observer yet fail to disclose he would personally and financially benefit from the policies he advocated.

Any moron can see this, yet Galbraith very happily and vigorously acted as if what he was saying made perfect sense.

We see arguments like this all the time in the law nowadays -- non sequiturs that have nothing to do with the issue at hand yet sound superficially appealing and noncontroversial in the abstract. Listening to Galbraith this morning I almost felt he was pathological -- he was utterly convinced that what he was saying was entirely logical and reasonable, yet it was totally irrelevant to the issue at hand.
Meanwhile, The Times of London ran this:
Not public at the time was the fact that Mr Galbraith stood to profit from the provisions through his arrangement with a Norwegian oil company, DNO. Months later, DNO discovered the large Tawke oil field in northern Iraq. The disclosure of Mr Galbraith’s stake fuelled Iraqi complaints that influential people in the Western powers that launched the 2003 war were trying to take control of Iraq’s oil.

Feisal al-Istrabadi, a former Iraqi diplomat and legal advisor, said the revelation cast doubt on Iraq's fragile constitutional order.

“The idea that a foreign oil company was in the room drafting the Iraqi Constitution has me reeling,” he said. “It casts a tremendous pall on the legitimacy of the process. We do not let Shell draft the constitution of Nigeria.”
Mr Galbraith acted as a go-between for the Norwegian oil company with the Kurdish regional government until its oil contract was signed in 2004. He continued to be paid by DNO while advising the Kurds in negotiations on the Iraqi Constitution.
My question is: Why is Galbraith allowed to have any stake in oil deals at all? Aren't there any US anti-corruption, anti-insider trading, or anti-conflict-of-interest laws that might apply? Couldn't the Kurds use his commission to feed their people?

At least the NY Times realizes something is wrong here, judging from today's Editor's Note:
On Thursday, a news article in The Times reported on the ties between Peter W. Galbraith, a former United States ambassador, and a Norwegian oil company that operates in the Kurdistan region of Iraq. According to the article, Mr. Galbraith “received rights to an enormous stake in at least one of Kurdistan’s oil fields in the spring of 2004.”

Since that time, Mr. Galbraith has written several opinion articles for the Op-Ed page in support of Kurdish independence and security. These articles should have disclosed to readers that Mr. Galbraith could benefit financially from an independent Kurdistan that would not have to share oil revenues with Iraq.

Like other writers for the Op-Ed page, Mr. Galbraith signed a contract that obligated him to disclose his financial interests in the subjects of his articles. Had editors been aware of Mr. Galbraith’s financial stake, the Op-Ed page would have insisted on disclosure or not published his articles.
In other words, this note apparently charges that Galbraith filed a false declaration with the NY Times.

UPDATE: In National Review Online, Michael Rubin points out an alleged connection between Galbraith and a reputed Iraqi arms smuggler:
The Other Partner in the Galbraith Oil Scandal [Michael Rubin]
The Norwegian press has been doing great work in investigating the Norwegian oil firm DNO's somewhat questionable dealings in Iraqi Kurdistan, during the course of which they identified former ambassador Peter Galbraith as a claimant to a share of the Tawke oil field.

The other claimant is Shahir 'Abd-al-Haq, a Yemeni businessman, who had handled DNO's business in Yemen and, at some point, also bought shares in Tawke. It is uncertain whether Galbraith and 'Abd-al-Haq were formal partners, or were just thrown together by mutual interests and holdings in the same field. What is not disputed, however, is that they are co-plaintiffs in court proceedings in London seeking compensation from DNO for having been ousted from the contracts.

'Abd-al-Haq has appeared on the U.S. radar screen before, as he helped Iraqi president Saddam Hussein subvert U.N. sanctions and import weapons. So now we have Peter Galbraith, who was an outspoken advocate for Kurdish rights in the wake of Saddam's ethnic cleansing becoming a partner with a man who helped arm Saddam. Greed makes strange bedfellows.
More on "Tawke-gate" from Walid Khaddui's Oil in a Week blog:
In any case, Galbraith succeeded in concealing information regarding his million-dollar investments in the Tawke oil field Production Sharing Agreement, signed between the KRG and DNO - a small Norwegian oil company. This continued to be the case until the leading Norwegian business newspaper “Dagens Næringsliv” exposed Galbraith’s involvement, through a series of investigative reports focused on DNO’s shareholders, after having obtained information about them directly from the Oslo Stock Exchange.

In fact, the importance of what the Norwegian newspaper has published lies in the many questions these articles have added to the ones we already had regarding the lack of credibility in the slogans adopted by the Bush administration, in what concerns fairness and transparency in the Middle East (insofar as being its aims behind the occupation of Iraq). This is in addition to raising questions about the intentions and objectives of one of the most prominent advocates of ending the Iraqi state, and about how he, Galbraith, abused his political power and engaged in questionable practices to further his business interests. Dagens Næringsliv’s reports also helped shed light on the role of American diplomats and individuals theorizing for the U.S occupation of Iraq, who exploited their political posts to have stakes in the Iraqi oil wealth.

Moreover, the reports published in the Norwegian Newspaper revealed that a “third party”, who was not initially named, was between 2004 and 2008 a partner in the production sharing agreement of the Tawke oil field in northern Iraq, and which was signed between the Norwegian company and the KRG. It was also revealed that this third party was excluded from signing the new agreement in early 2008, and that a new partner, the Turkish company “Genel Enerji”, was given a stake in the agreement. This prompted the third party to sue DNO for 500 million dollars for the losses suffered it had suffered.

It soon became evident that this third party was none other than Peter Galbraith. DNO then admitted that Galbraith, along with his Yemeni partner Shaher Abdulhak, were that third party, and that they had a 5 percent share in the Tawke oil field contract, through Porcupine, a company registered in the American state of Delaware in 2004. To validate this information, DNO then published several documents issues by Porcupine, and which bore the signature of Mr. Galbraith. Also, it should be mentioned here that Porcupine had entered in arbitration with DNO.

Moreover, the Norwegian Economic Crime Division “Økokrim” is currently investigating DNO’s transactions, which means that there is still more room to obtain more information before the end of the investigation. Meanwhile in Erbil, the “change” opposition bloc at the Kurdish Parliament called on Mr. Ashti Hawrami, the Minister of Natural Resources in the KRG, to appear before the parliament to respond to the charges made against him of involvement in a deal to sell 30 million dollar stocks to the Turkish company “Generl Enerji.”
Huffington Post article here.

PLUS THIS, from Christopher Dowd in the Boston Examiner:
Galbraith's massive financial stake in the war in Iraq and in war generally is par for the course for the entire Beltway elite. His corruption is nothing special. From generals with massive investments in "defense" firms given time on air as "military analysts" to ex CIA directors being given cushy sinecures on the boards of MIC companies to "journalists" given chairs in oil industry funded "think tanks"- from top to bottom our Beltway is a corrupt cesspool of incestuous back room deals, nepotism, back scratching, bought and paid for pens for hire, and talking heads willing to say anything on air as long as the price is right...
UPDATE: Someone I know points out that the American Enterprise Institute blog has had a post up on Peter Galbraith's Kurdistan oil connection for a month, already. An uncredited source for the New York Times' article? Also, the same someone provided this link to an English translation of the original Norwegian Dagens Næringsliv articles.