LSE under probe over Libya link

An independent investigation into the London School of Economics’ (LSE) links with Libya has been ordered after the university’s director resigned over the controversy.

Sir Howard Davies said the university’s reputation had suffered because of its ties to the regime of Colonel Muammar Gaddafi, and that it had been a mistake to accept £300,000 research funding from a foundation controlled by the dictator’s son Saif.

He admitted he made a “personal error of judgment” in travelling to Libya to advise the regime on how to modernise its financial institutions.

The investigation, to be conducted by former Lord Chief Justice of England and Wales Lord Woolf, will look in particular at the university’s links to Saif Gaddafi, who studied for an MSc and PhD there.

There are claims he plagiarised his PhD thesis, which was awarded in 2008, using a ghost writer and copying parts of it from other material.

In a statement, Sir Howard, a former head of the Financial Services Authority and deputy governor of the Bank of England, said: “I have concluded that it would be right for me to step down even though I know that this will cause difficulty for the institution I have come to love. The short point is that I am responsible for the school’s reputation, and that has suffered.

“I advised the council that it was reasonable to accept the money and that has turned out to be a mistake. There were risks involved in taking funding from sources associated with Libya and they should have been weighed more heavily in the balance.

“Also, I made a personal error of judgment in accepting the British government’s invitation to be an economic envoy and the consequent Libyan invitation to advise their sovereign wealth fund. There was nothing substantive to be ashamed of in that work and I disclosed it fully, but the consequence has been to make it more difficult for me to defend the institution.”

Sir Howard, who has been director of LSE for eight years, will stay in the role until a successor is found.

A key part of the inquiry will be the financial links between LSE and Libya. Lord Woolf is expected to investigate the acceptance of a £1.5 million donation from the Gaddafi International Charity and Development Foundation (GICDF) in 2009, £300,000 of which has been received so far.
Source: Press Association