University admits failings in accepting cash from Gaddafi charity

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The head of the London School of Economics (LSE) has said a report criticising its acceptance of a £1.5m donation from Libya showed “failings in our governance and management”.

Colonel Muammar Gaddafi’s most high-profile son, Saif al-Islam, studied for a doctorate at the school from 2002 until 2008.

In 2009 the LSE received £300,000 from the Gaddafi International Charity and Development Foundation (GICDF), prompting protests from students and widespread criticism. The payment was the first of a proposed five donations totalling £1.5m, but the others were never received.

In March, Sir Howard Davies resigned from his post of LSE director over the university’s links to the Gaddafi family.

A comprehensive report by Lord Woolf, published yesterday, found “the links which the LSE developed with Libya have clearly brought to light shortcomings in communication and governance within the LSE”.

LSE director Professor Judith Rees said: “It’s a fairly forensic exercise. Obviously it’s very hard hitting, it’s very detailed, and it does show that there were clear mistakes made, and failings in our governance and management. It’s sad, and certainly very painful reading for someone like me who has spent most of their career at the school.”

Lord Woolf’s report said: “Mistakes and errors of judgment were made and they contributed to the damage caused to the LSE’s reputation. Some were individual errors that no system can prevent from occurring from time to time.

“Here, however, the mistakes and errors of judgment go beyond those that could be expected from an institute of the LSE’s distinction.”

The inquiry set out a number of failings, but criticised the school’s management and the lack of an all-embracing code of ethics.

“The LSE is behind the standard of many global companies,” he wrote.

“It falls down on the first hurdle for not having an embedded ethics code, adopted by the institution, which sets out clearly the values, principles and procedures with which everyone associated with the school ought to comply.”

The report praised the Philosophy Department for not prejudicing al-Islam because of his father, but said it had an “element of idealism” because in educating him it considered it was doing “a great deal of good”.

Of the donation, Lord Woolf found: “If what the LSE was told by Saif about the source of the donation is taken at face value, the due diligence obtained on the gift should have raised real concerns.On the available information the source of the donation could have been payments made to gain Saif’s favour.”