Gaddafi donation to LSE may have come from bribes, inquiry finds
Inquiry criticises decision by London School of Economics to accept donation from Libyan dictator's son, Saif al-Islam Gaddafi
The London School of Economics accepted a 1.5m donation from a charity run by Saif al-Islam Gaddafi, which may have been money paid to the dictator's son as bribes, an official inquiry has found.
The report by Lord Woolf finds a "disconcerting number of failures in communication and governance" in the LSE's relations with the Libyan regime.
The report said: "It is a matter of real regret that the question of the Libyan gift proceeded to council [the LSE's governing body] when due diligence remained, at best, embryonic."
The inquiry report says it was an LSE academic, Professor David Held, who "first approached Saif about the possibility of funding his centre for Global Governance in December 2008".
This was after the dictator's son had been awarded his PhD by the LSE but before the formal graduation ceremony.
The gift offered was of 1.5m in tranches of 300,000 over a five-year period. Periodic payments were to be made annually.
The report says: "This was not a one-off donation but the founding of a relationship between the school and the donor, which is not unusual. However, bearing in mind the volatility of the Gaddafi regime, the gift involved a substantial risk because of the length of the relationship."
A decision was made that the gift would not come from Saif directly but from "private sector sources".
This step "became essential to Professor Held's presentation of the gift. Unless the money could be shown as coming to the foundation from private sources it could have been seen as unacceptable money from the Libyan state."
Lord Woolf's report says that the "private aspect of this gift was particularly troublesome".
He writes: "I am not satisfied (and it could not have been demonstrated to council) that the money which was ! the sour ce of the donation to the LSE from Saif's foundation was not the result of payments to influence Saif to look upon private companies with favour."
He quotes a former British ambassador to Libya saying that it was common knowledge that Saif was "deep into acting as an intermediary for major business interests in Libya".
Woolf said the LSE's director at the time, Sir Howard Davies, bore "responsibility for what went wrong".
Davies resigned in March after the university's reputation was battered by its links with Libya.
Held, professor of political science at the LSE, was an academic adviser to the toppled dictator's son when he studied at the London university. Held was director of the research programme funded by Saif al-Islam's charity.
Saif al-Islam was allowed to lay out "objectives and expectations" for the programme, according to leaked LSE documents.
Woolf writes: "I come to no conclusions as to whether there was or would have been excessive influence by the donor over the use of the funds from Saif's foundation. However, what has been made plain is that proper structures of governance are needed to protect academic integrity against influence from the interests of private donors."
The funding was accepted despite internal protest. Fred Halliday, a distinguished Middle East expert at the LSE before his death, criticised the donation in a letter that described the country's rulers as a "secretive, erratic and corrupt elite".
Muammar Gaddafi's son is now in custody in Libya after being captured in the country's southern desert earlier this month.
Held has extensive ties to Saif al-Islam. The academic, who is leaving the LSE in January, was appointed to the board of the Gaddafi foundation on 28 June 2009, a few days after the gift was discussed and! accepte d by the university's governing body. He subsequently resigned from the charity on the LSE council's advice.
The donation of which 300,000 was received was paid to a research centre LSE Global Governance, of which Held was co-director.
In an interview with reporters from the LSE's student newspaper, The Beaver, Held described the dictator's son as "much like an American liberal".
Held said: "He used to say there is nothing wrong with American democracy promotion in the Middle East I'd be horrified by that statement because Arabs should promote democracy themselves."
A separate inquiry has been conducted into allegations of plagiarism in Saif al-Islam's PhD thesis by the University of London, which awarded the degree. This has concluded that the PhD should not be revoked.
The North Africa Research Programme was suspended when the Libyan uprising began this year, while LSE Global Governance was closed at the end of July. The LSE has agreed to put 300,000 equivalent to the cash it has received from the Gaddafi foundation to set up the research programme into a scholarship for north African students.
In a statement issued before the inquiry report was published, Alex Peters-Day, general secretary of the LSE students' union, said: "We know that a broader and more diverse range of people need to be involved in decision-making within the school. The school receives considerable sums of money through donations and gifts, and only a new era of transparency and student involvement will restore confidence in how the school is run"
The LSE has appointed a new director, the US sociologist Craig Calhoun, who starts next September.
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