
Mary Williams Walsh, New York Times, November 17, 2009
"The Federal Reserve Bank of New York gave up much of its power in high-pressure negotiations with the American International Group's trading partners last year, according to a government report made public on Monday....
"The New York Fed, led then by Timothy F. Geithner, who is now the Treasury secretary, therefore had little leverage in the negotiations, according to a post-mortem of what has emerged as the most inflammatory episode in the rescue of A.I.G.
"The Fed 'refused to use its considerable leverage,' Neil M. Barofsky, the special inspector general for the Troubled Asset Relief Program, wrote in a report to be officially released on Tuesday, examining the much-criticized decision to make A.I.G.'s trading partners whole when people and businesses were taking painful losses in the financial markets.
"There have been suggestions that the Fed chose to negotiate weakly, Mr. Barofsky said, to give a 'backdoor bailout' to A.I.G.’s banks. He said Mr. Geithner and the Fed’s lawyers had denied this, but added that 'irrespective of their stated intent,' there was no doubt about the result: 'Tens of billions of dollars of government money was funneled inexorably and directly to A.I.G.'s counterparties.'"
James Glanz and Walter Gibbs, New York Times, November 12, 2009
"Now Mr. [Peter] Galbraith, 58, son of the renowned economist John Kenneth Galbraith, stands to earn perhaps a hundred million or more dollars as a result of his closeness to the Kurds, his relations with a Norwegian oil company and constitutional provisions he helped the Kurds extract.
"In the constitutional negotiations, he helped the Kurds ram through provisions that gave their region — rather than the central Baghdad government — sole authority over many of their internal affairs, including clauses that he maintains will give the Kurds virtually complete control over all new oil finds on their territory....
"Some officials say that his financial ties could raise serious questions about the integrity of the constitutional negotiations themselves. 'The idea that an oil company was participating in the drafting of the Iraqi Constitution leaves me speechless,' said Feisal Amin al-Istrabadi, a principal drafter of the law that governed Iraq after the United States ceded control to an Iraqi government on June 28, 2004. In effect, he said, the company 'has a representative in the room, drafting.'"
See Also:
An Inside Iraq panel about the Galbraith scandal on Al Jazeera English
An interview with Peter Galbraith on National Public Radio
Roula Khalaf, Financial Times, November 9, 2009
"Senior Bush administration figures including Zalmay Khalilzad, former US ambassador to Baghdad, and Jay Garner, the retired general who led reconstruction efforts immediately after the war, are leading a new business push into Iraq.
"The two one-time senior officials are among a raft of former US soldiers and diplomats either leveraging their war experience helping foreign companies to enter the Iraqi market or starting businesses there themselves."