Former UN diplomat who advised Kurds defends oil interests in northern Iraq

By JOHN CURRAN , Associated Press

Last update: November 14, 2009 - 1:43 PM

MONTPELIER, Vt. - A former U.S. ambassador who served as a private advisor to Kurdish leaders in Iraq defended his financial stake in oil fields in the country's north, insisting Saturday there was no conflict of interest.

"I was a private citizen engaged in appropriate business activities that have provided very substantial benefit to the people of Kurdistan and to the shareholders of the companies with which I have worked," Peter Galbraith said.

"I had no affiliation, no association, received no assistance from the U.S. government at the time these activities took place," he said in a telephone interview from his home in Townshend, Vt.

The Kurds have been locked in dispute with Iraq's central government over control of oil and some territory in parts of northern Iraq, particularly in the city of Kirkuk. The region gained autonomy after rising up against former Iraqi leader Saddam Hussein in 1991.

Galbraith, the 58-year-old son of economist John Kenneth Galbraith, is a former U.S. ambassador to Croatia who served recently as the top-ranking American in the U.N. mission in Kabul.

He was fired in September after claiming that Kai Eide — the top U.N. official there — was not aggressive enough in preventing fraud in Afghanistan's first-round presidential vote.

At issue now is Galbraith's interest in oil fields in Kurdistan, which The New York Times reported Thursday stood to net him more than $100 million. The newspaper said he was paid by Norwegian oil company DNO to negotiate a drilling contract with the Kurds in 2004.

In 2005, Galbraith served as an adviser to the Kurdish regional government and drafted a part of the Iraq Constitution that gives Kurds control over internal affairs that could result in their control over new oil finds in northern Iraq.

"I assisted the Kurds as an unpaid adviser in the constitutional negotiation in 2005," he said Saturday. "I did not participate in those negotiations. They, of course, knew full well of my business ties. They made a decision to ask me for advice."

He called it "absurd" to suggest that he influenced the Kurds on the oil issue, and said U.S. and Iraqi government officials knew he was involved with DNO.

But he wouldn't disclose the size of his stake, other than to say his breach-of-contract claim against DNO is now the subject of arbitration in London that began last year. Of the $100 million figure, he said: "Oh, I wish."

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