Schaffer’s role in Iraqi oil deal questioned

By John Schroyer

Republican U.S. Senate candidate Bob Schaffer, whose poll results are still feeling the impact from negative media reports about a 1999 junket to the Northern Marianas, has a new controversy on his hands.

As a vice president for business development for Aspect Energy, Schaffer traveled to the Iraqi province of Kurdistan last year on fact-finding mission to assess the potential for oil production in the region. Although Schaffer didn’t participate in the negotiations, the contract between Aspect and the Kurdish regional government signed in November runs afoul of U.S. State Department policy.

That policy strongly discourages deals not overseen and approved by the Iraqi central government in order to avoid exacerbating tensions among Iraq’s three Islamic populations.

The trip, first reported July 9 by The Grand Junction Sentinel, led to criticism by a pair of international relations experts interviewed in a conference call on July 11.

“The guidance is absolutely clear from the State Department: ‘We strongly discourage any company from concluding any contract with the KRG,’” said Rand Beers, a former member of the National Security Council under presidents Ronald Reagan, George H.W. Bush, Bill Clinton and George W. Bush. “(Schaffer), in his position, might have given some strategic advice to the company that he was working for, that perhaps this wasn’t a very good idea. He doesn’t seem to have done that.”

According to the U.S. Government Accountability Office, which issued a report on Iraq’s stability on June 23, Kurdistan has signed 25 separate oil deals that the ICG says are illegal. Aspect’s deal is one of them, and is thus contributing to the regional instability, Beers said.

Larry Korb, who served as an assistant secretary of defense under President Reagan, added, “This is kind of a ticking time bomb … One would have to question the judgment and the motives of people who would get involved in something like this.”

Taylor West, communications director for Schaffer’s Democratic opponent, Mark Udall, argued that Schaffer’s role in the oil deal undermines the mission of American troops in Iraq. Schaffer supports a continued American military involvement in Iraq until the ICG is strong enough to stand on its own.

“As a candidate, he says we can’t bring our troops home until their mission is complete, and now he’s engaging in these business activities that make it harder for the troops to accomplish that mission,” West charged.

Schaffer campaign manager Dick Wadhams rejected the claims of both Korb and Beers as motivated by partisan politics.

“Spare me,” Wadhams said when asked about the comments. “They happened to work in some Republican administrations, but Beers worked for (Democratic U.S. Sen. John) Kerry, and now he’s an adviser to (Democratic presidential candidate Barack) Obama. (Korb) works for one of the most liberal foreign policy think tanks in the world. They are clearly to the left, and they both left Republican administrations because they so strongly disagreed with the administrations.”

Korb is a senior adviser to the Center for Defense Information and a senior fellow at American Progress, which was founded by John Podesta, a former chief of staff to President Clinton.

Aspect Energy had no idea it was going against the wishes of the State Department when it began brokering the Kurdistan deal, said Todd Neugebauer, chief investment officer for Aspect.

“We are checking our files, but to our knowledge we did not receive a letter from the State Department asking us not to do a deal with the KRG,” Neugebauer said in an e-mail.

But Beers said the responsibility for getting permission from the State Department “falls to the company.”

“The State Department can’t go chasing after everyone who might be thinking about doing business overseas,” Beers said.

Neugebauer added that Schaffer’s role in the deal was minimal, and stressed that it was a fact-finding trip, not an integral part of the negotiations between Aspect and the KRG.

He further pointed out that Aspect was essentially acting on behalf of the nation by bidding on resources that other countries are setting their sights on as well.

“At a time when energy exploration is as much a national security concern as it is an economic one, Americans need to decide if they would rather have American companies exploring on these licenses or Iranian, Russian and Chinese,” Neugebauer said.