By Reidar Visser
In comments to the US newspaper The Boston Globe today, Peter Galbraith appears to admit his relationship to the Delaware-based Porcupine company as well as having "interests" in the Kurdish oil sector. At the same time, however, a statement from his Porcupine company fails to clarify the exact nature of his contractual relationship with DNO, the Norwegian oil firm involved in the affair, although for the first time the existence of some kind of economic relationship is publicly acknowledged.
That Galbraith did have an economic interest in the Kurdish region is now perfectly clear. Galbraith told the Boston Globe, "The business interest, including my investment into Kurdistan, was consistent with my political views. 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". Also for the first time, DNO comments publicly on its role in the Boston Globe story. The paper quotes Ben Willey, a company spokesman, who explained how "[DNO was] '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." Just to confuse matters somewhat, in the Norwegian press today, a press release from Porcupine has been reproduced, to the effect that Porcupine "confirms the existence of a contractual relationship to DNO" while at the same time saying the company "does not have and has not had any third party interests in DNO's PSA in Iraqi Kurdistan". However, Dagens Næringsliv today also reproduces a full document from 2006 explicitly showing Porcupine listed as a 5% partner in the Tawke oilfield project. The document relates to the approval of expenses for test drilling.
Predictably, perhaps, Galbraith's comments are focused on clearing his name in an American context and from a legalistic point of view. According to the Boston Globe, "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."
From the ethical and above all the Iraqi point of view, however, what must be more significant is the role of Galbraith in shaping the new political structure of Iraq in the years between 2003 and 2005, in particular with regard to the highly decentralised constitution. Today's explicit admission by Galbraith that his American shareholders received economic "benefits" from his work to push the Iraqi constitution in a certain direction may perhaps not incriminate him before American courts, but it will certainly add to the growing confusion about where some of the more unusual aspects of Iraq's highly decentralised post-2003 institutions of government really came from. It remains somewhat unclear whether it was Galbraith, the Yemeni businessman, or both who were originally given interests in the PSA by the KRG back in 2004 as a reward for having introduced the Norwegian company to the "Kurdistan opportunity" as Ben Willey called it, but the fact that the two are now involved in arbitration against DNO in London makes it perfectly clear that some kind of economic interest does exist, and that the stakes are high.
