Iraq and Gulf Analysis

New DNO Revelations: While He Was Influencing the Shape of the Iraqi Constitution, Peter Galbraith Held Stakes in an Oilfield in Dahuk

Posted by Reidar Visser on Saturday, 10 October 2009 10:12

It is widely known that the former US diplomat Peter Galbraith has been one of the most prominent figures in shaping the state structure of Iraq in the period after 2003, especially with his vocal advocacy of various forms of partition solutions for Iraq’s political problems that are reflected in his books and numerous articles in the New York Review of Books, especially in the period from 2004 to 2008. Until now, however, it has generally been assumed that Galbraith’s fervent pro-partition propaganda was rooted in an ideological belief in national self-determination and a principled view of radical federalism as the best option for Iraq’s Kurds. Many have highlighted Galbraith’s experience as a former US diplomat (especially in the Balkans in the 1990s) as key elements of his academic and policy-making credentials.

Today, however, it has emerged that the realities were rather different… Full story here.

27 Responses to “New DNO Revelations: While He Was Influencing the Shape of the Iraqi Constitution, Peter Galbraith Held Stakes in an Oilfield in Dahuk”

  1. John Eadie said

    Why the surprise? Peter Galbraith is an American. Being for an independent Kurdistan is part of the American overall plan of dividing and ruling oil-bearing or oil-pipeline areas so that the US retains or increases it’s overall wealth. That he should personally gain from promoting the overall plan is quinessentially American. He’s not at all like his Dad, whose ideas are old-fashioned Canadian.

  2. Alexno said

    Do we know, Reidar, how much the 5 per cent is worth? It sounds to me like a kick-back, compensation for services rendered, that is, for “arranging” the deal for DNO. No doubt illegal under Norwegian law – as it would be under British law.

  3. Al-daraji said

    Wow! I knew there was money involved. Because nobody advocates for something stupid unless they are benefiting from it’s consequenses or they are stupid, and Peter G. Is not stupid

  4. Reidar Visser said

    Alex, briefly, and please note that I’m a little reluctant to say much about the purely financial aspects as it’s the politics of this I know most about, but, anyway: the 5% stake is currently tied to a demand for around USD 250,000,000, supposedly reflecting the value of the stake. As I understand it, the Yemeni also has 5% and so their total demand is around 500 million USD. According to the financial press, even analysts sympathetic to DNO tend to consider that evaluation a little over the top.

    I wouldn’t want to speculate too much as to the possible background. As you hint at, the chronology is a bit suggestive of a possible kickback, as the stake did materialise at the end of quite intensive efforts by Galbraith to help the Kurds with the TAL. On the other hand I think Abd al-Haqq is a businessman by profession, so that could suggest a more purely economic dimension.

  5. Alexno said

    So, whatever the figure, if it is a kick-back, would it be legal under Norwegian law?

    I am certain it would not be under British law. There is a big issue at the moment in UK about kick-backs from Saudi contracts. That is widely accepted in UK, though not legal.

  6. Reidar Visser said

    To be honest, I’m not sure. I specialise in aspects of Iraqi political history! I have no experience from the financial world, whether here or elsewhere, and really wouldn’t want to comment on the finer aspects of that issue. For sure, it sounds corrupt and illegal, but who knows whether there are established ways to circumvent the legal system with respect to international deals? You probably need a legal expert to provide a crystal-clear answer.

    I’m really more concerned about what Galbraith has done to Iraq.

  7. FNTC said

    His demand would imply that DNOs 55% of Tawke is worth 18NOK per DNO share. It currently trades at around 5NOK, and they have more than just Tawke. Either Galbraith and Farouk’s claims are way out of proportion, or DNO is extremely underpriced, partly due to attacks from NUPI and the like.

  8. Reidar Visser said

    FNTC, I don’t know much about pricing but would be really surprised if comments from researchers at NUPI had any influence on the evaluation of an entire company! Personally, I am working on a research project on federalism and centre-periphery relations in Iraq and DNO becomes part of this picture only very occasionally, not least since there has been so much standstill since 2005. Back then I wrote an op-ed about my concerns about how DNO’s operations influence Iraq’s constitutional process; I feel those arguments by and large remain relevant today.

    What I find to be missing when I sometimes listen in on the current DNO debate in Norway is the lack of a realistic assessment of a completely new dynamic in Baghdad since at least 2008: the returning strength of Iraqi nationalism and the concomitant decline of Kurdish influence in the Iraqi capital and even in Washington. Based on what you say I realise that making this general point may conceivably be interpreted as “attacks” on DNO but I think it would be more correct to see it as a call for greater realism that could create better understanding and more realistic expectations among Kurds, other Iraqis and foreign companies alike – and thereby more sustainable solutions for the future too.

  9. Reidar,
    Wow. Let me congratulate you on this revelation. I was getting second thought about Peter Galbraith after his stand against fraud in Afghanistan, I guess the afghanis don’t have oil so Galbraith wants to give them democracy! This revelation tells me that Galbraith doesn’t really care about the welfare of the Kurdish people, but what really puzzles me is the intended result of an independent Kurdistan carved with hostility to all its neighbors, doesn’t anybody realize that such a situation will be a huge financial and military burden on the U.S.?

  10. Chris Baker said

    With Democrats in the US Congress focused primarily on US combat forces departing Iraq as scheduled, the concern seems to be mostly about the KRG co-operating better with the central government. Also John Kerry from Massachusetts is now the chairman of the Senate Foreign Relations committee, Joe Biden’s old platform. Kerry’s father served in the US Foreign Service and he seems to have less tolerance for special interests dominating US foreign policy, as tended to happen when Biden ran the committee. Kerry seems particularly concerned about how to better prevent foreign meddling in Iraq by Iran, Syria, and Sunni Arab governments. Also there is an online video of a Sept. Senate hearing Kerry chaired on Iraq here: http://foreign.senate.gov/hearings/2009/hrg090910p.html

  11. If anyone needed to know, this sordid story shows the need for transparency in Kurdish regional governance, as claimed by Gorran and other opposition groups. I comment in Norwegian at my blogsite:
    http://vindheim.wordpress.com/2009/10/11/kurdernes-godt-betalte-venn/

  12. Osama Al-Zand said

    Unlike his dad, John Kenneth, Peter Galbraith wanted to join “The Affluent Society” by tapping on Iraqi oil by dividing the country for easy profiteering and black marketing, what a shame. I have recently seen Peter Galbraith arrogantly protesting his firing from the UN mission in Afghanistan, I guess in times of excessive greed, people in glass houses are fully entitled to throw rocks.

  13. Faisal Kadri suggests something very interesting, which is the timing of the Dagens Næringsliv story shortly after Galbraith ripped Eide in public for Eide’s alleged failure to address fraud in Afghanistan. The allegations about Galbraith need to be evaluated on their own, but this should not be used as an excuse to hide the problems of Eide in dealing with the Afghan elections.

  14. Reidar Visser said

    Sherman, I wouldn’t get too conspiratorial about the timing of this. DN have been investigating DNO for many months and their first revelations antedated the Eide-Galbraith conflict. My own criticism of Galbraith relates to his soft partition ideas about Iraq. That is a separate track as well, which I have been covering since 2006.

  15. Reidar Visser said

    Jan, on the subject of Kurdish reform, I just came across an article in Hawlati (which I think is published in Sulaymaniyya) in which a “Change” politician criticises the nomination of Hawrami pending clarification of his role in the DNO affair. He asks for a clarification of his role and hints at possible vote-of-no-confidence threat. Quite intetesting.

  16. Coetze said

    When it comes to money it is important not to forget that Reidar Visser and his organisation,NUPI, is founded by the biggest owner of Statoil, which in these days is asking oilminister Sharistani for a favour.
    Visser fight for an arabic ruled Kurdistan , but forget that the kurdish provinces of Iraq never were ruled by the arabs, except for the time of the genocide.
    And one of the few western protest of the genocide came from Peter Galbraith. I guess Kai Eide was preparing for his career in those days. Visser is of course innocent in that case as he still was a young student.

  17. Sherman, “The allegations about Galbraith need to be evaluated on their own”
    I couldn’t agree more, the DNO story has been brewing for a long time, that’s a trend, it carries more weight than one event of pro-democracy position. I was not suggesting conspiracy, just double standards of applying the values of democracy. More ideas re Kurdistan in my blog: http://www.montrealiraqi.com.

  18. Salah said

    comments by Yusif Amin

    The Three Most Hated Mafia Families —Zebari-Barzani-Talabani

    Dindar Zebari, KRG Coordinator to the UN and other NGOs in Kurdistan , claims to have been awarded the degree Doctor of Philosophy from the University of Westminster University in London . Close source indicates that Zebari did not completed his Bachelor Degree in Iraq but with kickbacks he was able to be accepted at Westminster university in London however, after his return to Kurdistan, the officials did not accept his PHD until he proves he has a Bachelors degree therefore, Zebari had not choice but to attend university in Kurdistan to obtain his Bachelor. Talk about corruption in Kurdistan with the Zebari’s and Barzanis. Whatever happened to the $9 million dollars that Dindar Zebari claims that was allocated by the State Department?

    Kurdistan has become the property of ONLY the Zebari’s Barzani’s and Talabani’s. The three tribes have become the Italian like Mafia.

    Unless you’re a Jash, KDP or PUK , you are not recognized in Kurdistan . There are numerous qualified men and woman like in United States and United Kingdom who can run offices much better but because they are not members of any of the above parties, they have been condemned.

    Who is Nazanin Mohammad Waso, Chinar Sadulla or Shireen Amedi? What do they know about running ministries? Nasreen Al-Barwari was removed because she was a competition and KDP fears competition and fights those that are smarter than them.

    What I am trying to say is that Kurdish people are to be blamed. They are the voices and they should fight back these totalitarianism regime. Who says they are any better than the previous regime? What is the different between the current leadership and the previous regime of Saddam Hussain? In fact, I prefer the old regime over the current one. At least then people were recognized for their hard work, loyalty and their education.

    KDP leadership is not fond of education; they rather have submissive people like the current folks put in charge to represent the KDP and the KRG in US and in UK .

    No wonder 95 percent of PUK members in Washington metropolitan have switched parties and have joint GORAN List. And we urge that the smart KDP members will follow their footstep and together we can over though the leadership and build a functional government that is for all citizens not just the three mafia families.

    Concern Citizen

  19. Dave Jurin said

    There is no one in Washington who has known Peter Galbraith over the past thirty years who has not also known that he was a personally corrupt person. Corrupt in a moral sense.

    That he was also corrupt in a financial sense is no big surprise.

  20. Thanks Reidar. I am not surprised, since the gorran-supporters I have talked with about this all see the whole story as just what they would expect from the present leadership. But as I dont read Kurdish😦 what was the name of the Gorran politician?

  21. Reidar Visser said

    Coetze, the idea that the Galbraith revelation was somehow caused by an unholy web of interests supposedly linking NUPI, the Norwegian foreign ministry, Statoil and the Iraqi oil ministry is absurd.

    Just to make things clear, NUPI’s main financial backer is not the Norwegian foreign ministry and not Statoil. We get our money mainly from the ministry of education. It is true that we receive part of our funding from the Norwegian Research Council, and that they in turn receive support for some of their specialised programmes from various Norwegian industry sources, including Statoil. But that in itself does not mean that we automatically become their loyal servants!

    Please look more carefully at the record here: I have publicly warned Statoil about premature investments in Iraq at least twice (just as I did with regard to DNO earlier), the last time I did this was three months ago. My main argument remains the same, regardless of whether it is DNO or Statoil: Iraq should complete its process of transition and its constitutional process before foreign oil companies are allowed to be all over the place. My reason for making this point is very simple. Oil is the mainstay of Iraq’s economy and it is therefore vital that legislation affecting oil is adopted in a credible political process where all Iraqis are able to make their voice heard and where international oil companies are out of the picture. This is also the reason I have previously criticised the Iraqi oil ministry for the ways it handled the first licensing round .

    Also, the contention that I somehow “fight for an Arabic-ruled Kurdistan” is just outrageous. On the contrary, I have suggested in the past that the Kurds would do themselves a great favour by concentrating more on their historical demands for self-rule. Last year I worked with a group of Iraqi nationalists who proposed the Kurds should seek international guarantees for their existing autonomy so that they received an “autonomy plus” status in Iraq similar to the Åland Islands within Finland (an idea which in turn originated with Liam Anderson, who is very sympathetic to the Kurdish cause). The whole idea would be to give the Kurds some kind of guarantee that could convince them to abandon some of their policies that are souring politics in the rest of Iraq, including their attempt to impose federalism outside Kurdistan and to annex Kirkuk. It is the maximalist policies of the PUK and the KDP I criticise, not the idea of a fully autonomous Kurdistan.

    Jan, I don’t read Kurdish either, it’s from the Arabic section of Hawlati. Many Kurds, especially those aged 35 or older, speak Arabic fluently. What’s more I picked it up from a pro-Maliki website. It is very interesting to see pro-reform Kurds reaching out to those forces in Baghdad that try to define themselves in broader, national terms.
    The link is here: http://www.hawlati.info/Ar/NewsDetailN.aspx?id=11559&LinkID=79 and the name of the politician is كويستان محمد
    I think that might be Kwestan Muhammad, but not totally sure about the transliteration of the first name since it is not an Arabic name.

  22. Salah said

    كويستان محمد، التي استقالت من منصبها كرئيسة لقائمة حزب الاتحاد الوطني الكردستاني بزعامة الرئيس جلال طالباني في الدورة الثانية للبرلمان قبيل بدء الحملة الإعلامية في الانتخابات النيابية والرئاسية التي جرت في 25 يوليو (تموز) الماضي، جرت تسميتها رئيسة لكتلة التغيير بعد استقالة رئيسها نوشيروان مصطفى مباشرة، باعتبارها الأكثر خبرة في شؤون البرلمان من الأعضاء المنتخبين حديثا، وبعده بأيام قليلة فقط بادرت الكتلة الكردستانية إلى تسمية النائبة سوزان شهاب نوري رئيسة للكتلة في البرلمان باعتبارها أيضا الأكثر خبرة وكفاءة.

    وتقول كويستان محمد التي تعتبر من أقدم الكوادر النسوية في صفوف الاتحاد الوطني الكردستاني، إن كتلتها تواجه مصاعب وتحديات جمة في البرلمان لكنها مصرة على مواصلة مهامها بكل حزم حتى تحقق الأهداف «السامية التي انبثقت من أجلها»، على حد تعبيرها. وأضافت في حديثها لـ«الشرق الأوسط» لقد «نجحنا في الجلسة الأولى في إلغاء لجنة تشريع القوانين في البرلمان، وتحويل جهاز الأمن ـ الاسايش إلى لجنة الشؤون الداخلية، كما ألغينا لجنة شؤون النساء التي كانت قد تشكلت بهدف تقليص وتحجيم الحقوق المقررة للنساء، ولكننا فوجئنا في الجلسة الثانية بأن الكتلة الكردستانية تواجه بالرفض كل مشاريعنا وطروحاتنا حتى لو كانت تخدم المصالح العليا للشعب، والحالة الغريبة والفريدة التي لاحظناها هي أن الكثير من نواب الكتلة الكردستانية أيدوا وبشدة طروحاتنا أثناء الجلسة، لكنهم بادروا إلى التصويت ضدها فيما بعد في حالة غريبة وغير مسبوقة تجسد ظاهرة سلبية جدا تعكس غياب الإرادة بالمرة».

    http://www.mowatinat.org/articles/index.php?news=1169

  23. bb said

    Have to say the revelations of the perfidies of Norwegian oil companys have been most illuminating given the Norwegians propensity for high mindededness, eg the recent Nobel peace prize.

    Tell me, did Norway get much of a mention in the UN Oil-for-food scandal?

  24. Reidar Visser said

    Bb, for the sake of the quality of the discussion here, if you think there was any Norwegian link to the oil-for-food scandal, would you be kind enough to provide a name, a link or some other kind of evidence that has at least a tangential relationship with the real world to back up your thinking around this? That would make it a lot easier to respond as well.

  25. Steve Connors said

    Reidar,
    Welcome to the world of Web 2.0 where those hiding behind the veil of anonymity become so brave in launching their attacks.

    Thank you for your tireless effort in keeping us so well informed.

    I provided a fuller comment over at JWN

    S

  26. Fanatic said

    I searched here: http://www.aftenposten.no/nyheter/iriks/article3316246.ece

    The Norwegian government’s sovereign wealth fund (“Statens pensjonsfond utland”) owns shares in:

    -Niko Resources
    -Heritage Oil
    -WesternZagros
    -Addax Petroleum
    -Sinopec
    -Lundin Petroleum
    -Talisman Energy
    -TNK-BP
    -OMV
    -Reliance
    -MOL
    -Oil Search

    All of these companies have PSCs in Kursdistan.

    Yet NUPI with Thune and Visser continue to bash DNO and to discourage foreign investments in the Kurdistan region.

    Double standard? Hypocracy?

  27. Reidar Visser said

    On the general subject of foreign investments in Iraq’s oil sector I can only repeat what I have said earlier, which is that I think foreign companies should remain on the sidelines until Iraq has completed its constitutional revision, regardless of whether this is in Kurdistan or the rest of Iraq. In July I specifically warned Statoil about taking part in the first licensing round for this reason, see http://historiae.org/statoilhydro.asp. I understand that some want to make a distinction between the PSCs of Kurdistan (which generally involve a greater degree of foreign investments) and the technical service contracts for the rest of Iraq (whose terms haven’t been particularly lucrative to foreign companies so far, to say the least). But the way the first licensing round was structured made it problematic in itself, and we are now getting so close to the elections that I think it would be both prudent and ethically more correct to remain on the sidelines.

    For an overview of my writings on oil/federalism in Iraq from 2005 until today, see http://historiae.org/oil_Iraq.asp
    I trust you will find that I have been equally critical of DNO, StatoilHydro and the Norwegian Foreign Ministry.

    The news about the investments by the Norwegian sovereign wealth fund was entirely new to me. I think it should be subject to exactly the same criticism as that referred to above, i.e. undue interference in Iraq’s constitutional process during a sensitive process of transition. I don’t know much about Norway’s sovereign wealth fund since I don’t specialise in economics, but I fear that if you dig deeper you may well find additional contradictions in Norway’s so-called “ethical” foreign policy.

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