Revealed: American Diplomat's Troubling Role in Iraqi Oil Politics

WASHINGTON, Oct 17 (IPS) -- In 2003, U.S. diplomatist Peter Galbraith resigned at the end of a distinguished, 24-year government career. Over the years that followed, he worked as a contract-based adviser to leaders in Iraq's Kurdish community, while also arguing passionately in public media that Iraq's Kurds should be given maximum independence from Baghdad -- including full control over any new sources of oil.

But in June 2004, more quietly, Galbraith also established a small, U.S.-registered company, Porcupine, that held a five percent stake in a newly exploited oilfield in Iraqi Kurdistan, a Norwegian daily revealed last Saturday.

The daily, Dagens Næringsliv, had been investigating the increasingly troubled relationship between Porcupine and a privately-owned Norwegian firm, DNO, which partnered with Porcupine in the Kurdish-Iraqi oil project. Journalists at the daily said that discovering that Porcupine's hitherto secretive owner was Galbraith came as a complete surprise.

Galbraith also won international headlines in another recent Norway-related story. In late September, he broke publicly with Kai Eide, the Norwegian head of the United Nations Assistance Mission in Afghanistan (UNAMI), over how to respond to allegations of fraud in Afghanistan's August election.

Galbraith had been working as Eide's deputy since March. He resigned in late September, accusing Eide of trying to hide evidence of large-scale fraud committed during the election.

There are many parallels between the constitutional/legitimation challenges the U.S. occupation force and its allies face in Afghanistan today and those faced by the U.S. and its allies in Iraq, 2003-08.

One key challenge for U.S. decision-makers is how to generate a local "host nation" government using the democratic processes that most U.S. citizens say they want -- but one that is also prepared to work very closely indeed with Washington, which most citizens of the occupied countries are reluctant to do.

Prior to the 2003 U.S. invasion of Iraq, Peter Galbraith was a strong voice advocating the invasion. Immediately after the invasion, he was one of three or four high-level U.S. officials and advisers who started designing a completely new Constitution for the country.

(The Fourth Geneva Convention of 1949 specifies that an occupation force should keep existing governance and constitutional arrangements in place, as far as possible, until it withdraws.)

Galbraith had long been a strong sympathizer of the Iraqi Kurds' desire for strong autonomy or even complete independence from Baghdad. In his 2006 book The End of Iraq, he wrote that he started consulting with the Kurdish leaders on constitutional issues "two weeks after the fall of Saddam Hussein".

He continued those consultations through the time of the U.S.'s promulgation of a "Transitional Administrative Law" (TAL) in March 2004 and the adoption of a more permanent new Iraqi Constitution in October 2005.

Adoption of the Constitution was achieved through an Iraq-wide referendum, conducted under the control of the U.S. military.

In both the TAL and the 2005 Constitution, provision was made for any one of the country's 18 provinces, or a group of them, to declare the formation of a "region" that would have extra powers of self-governance. In practice, the only "region" that has formed is the Kurdish Regional Government (KRG), comprised of Iraq's three majority-Kurdish provinces.

In the TAL, the principles for dividing the country's oil revenues were left vague. In the 2005 Constitution, it stated that revenues from the country's existing oil fields, many of which were nearing depletion, would continue to be controlled by Baghdad. It said the "regions" could have a lot more control over any new oil fields to be developed -- though the extent of that control was still left vague.