Davies quits LSE over Libyan donations
By Chris Cook 

Published: March 3 2011 21:23

http://www.ft.com/cms/s/0/de314828-45da-11e0-acd8-00144feab49a.html?ftcamp=c
rm/email/201133/nbe/BreakingNews1/product#axzz1FZuwkAf7

Sir Howard Davies has resigned as director of the London School of Economics
following mounting pressure over its relationship with Libya, which had
prompted the university to instigate an external review into its ties with
the country.

His resignation comes as the Financial Times revealed fresh details about
opposition from one of the university¹s experts on the Middle East to the
LSE¹s acceptance of donations from a charity run by Seif al-Islam Gaddafi,
the Libyan dictator¹s son and an alumnus of the university. The donations
could have been worth up to £1.5m but the university received only £300,000.

Fred Halliday, an emeritus professor of international relations who died
last year, wrote to the LSE council in late 2009 to say that Libya had made
³no significant progress in protecting the rights of citizens, or migrant
workers and refugees, and remains a country run by a secretive, erratic and
corrupt elite².

In a statement issued on Thursday evening, Sir Howard said: ³I 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.²

The university also disclosed that it had struck a £2.2m contract through
LSE Enterprise, a company owned by the university, with Libya¹s Economic
Development Board to train Libyan civil servants and professionals. Sir
Howard also acted as an adviser to the Libyan Investment Authority and
agreed to promote business in Libya.

Sir Howard said: ³I made a personal error of judgment in accepting the
British government¹s invitation to be an economic envoy and the consequent
Libyan invitation to advise their sovereign wealth fund.²

Lord Woolf, former Lord Chief Justice of England and Wales and former
chairman of the Council of University College London, will conduct the
investigation into the university¹s conduct. Sir Howard has been asked to
remain in his post until a successor has been appointed.

Sir Howard has served as a deputy governor of the Bank of England, chairman
of the Financial Services Authority, head of the CBI and the Audit
Commission. He also worked as a special adviser to Nigel Lawson, chancellor
of the exchequer, and worked at McKinsey. He sits on the board of Morgan
Stanley and advises the Government Investment Corporation of Singapore.


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