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LSE Director steps down

It is with great regret and reluctance that the Council of the London School of Economics and Political Science announces that it has accepted the resignation of Sir Howard Davies as Director. The Council has asked him to stay on until arrangements for a successor have been resolved.

The Council has commissioned an independent external inquiry into the School’s relationship with Libya and with Saif Gaddafi and into related matters.

The inquiry will be conducted by Lord Woolf, former Lord Chief Justice of England and Wales and former Chairman of the Council of University College London.

Sir Howard Davies 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’s letter of resignation can be found below.

Peter Sutherland, Chairman of the Court of Governors, said: “Howard has been an outstanding director of the LSE these past eight years and his achievements here will endure long after the current controversy has died away.

“We accept his resignation with great regret and reluctance but understand that he has taken an honorable course in the best interests of the school.”

The Council and Lord Woolf have agreed the following terms for his inquiry:

An independent inquiry to establish the full facts of the School’s links with Libya, whether there have been errors made, and to establish clear guidelines for international donations to and links with the School. Lord Woolf is to make recommendations to the LSE Council as soon as possible. He is to have total discretion as to how he conducts the inquiry, and as to the matters on which he is to report.

The issues the Council will suggest he investigates include, but are not limited to, the following:

- The agreement to accept a £1.5 million donation from the Gaddafi International Charity and Development Foundation (GICDF) in 2009 to LSE Global Governance, £300,000 of which has been received to date

- The acceptance of $50,000 paid to the university in return for Sir Howard’s advice to Libya’s sovereign wealth fund in 2007

- The academic authenticity of Saif Gaddafi’s PhD thesis, awarded in 2008

- The agreement of a £2.2 million contract between LSE Enterprise and Libya’s Economic Development Board to train Libyan civil servants and professionals, £1.5 million of which has been received to date and payment of £20,000 for tuition of the head of the Libyan Investment Authority

- The acceptance of an award from GICDF of £22,857 to support travel costs, mainly airfares, for academic speakers to travel to Libya

Furthermore, the Council notes that LSE staff have co-operated with an investigation of an allegation of an assault during a protest at the LSE on 25th May 2010 when Saif Gaddafi visited the School to make a speech. This alleged assault, involving one of Gaddafi’s associates and a protestor, is currently sub judice and no further comment can be made.

Finally, the Council will carry out its own investigation of the administration of LSE Global Governance.

The members of the LSE Council can be found here|.

LSE press office +44 (0)20 7955 7060 pressoffice@lse.ac.uk|

Notes to Editors:

About the London School of Economics and Political Science

The London School of Economics and Political Science (LSE) studies the social sciences in their broadest sense, with an academic profile spanning a wide range of disciplines, from economics, politics and law, to sociology, information systems and accounting and finance.

The School has an outstanding reputation for academic excellence and is one of the most international universities in the world. Its study of social, economic and political problems focuses on the different perspectives and experiences of most countries. From its foundation LSE has aimed to be a laboratory of the social sciences, a place where ideas are developed, analysed, evaluated and disseminated around the globe. Visit www.lse.ac.uk| for more information.

About LSE Enterprise

A subsidiary of LSE, LSE Enterprise was founded in 1993 to enable commercial application of LSE's expertise and intellectual resources. It delivers tailor-made executive education, in-depth studies and consultancy reports. Clients include major businesses such as Microsoft and Citigroup UK, national government agencies like the Foreign and Commonwealth Office, charities such as Oxfam and international organisations such as the United Nations and the World Bank. All of LSE Enterprise's profits flow back into LSE each year to support the core teaching and research of the School.

About LSE Global Governance

LSE Global Governance is a leading international institution dedicated to research, analysis and dissemination about global governance. Based at the London School of Economics, the Centre aims to increase understanding and knowledge of global issues, to encourage interaction between academics, policy makers, journalists and activists, and to propose solutions.

About Lord Woolf

Rt Hon Lord Woolf of Barnes was Lord Chief Justice for England and Wales from 2000-2005.

He was appointed to the Queen’s Bench Division of the High Court of Justice in 1979, as Lord Justice of Appeal in 1986 and a Lord of Appeal in Ordinary in 1992. Between 1996 and 2000 he held the position of Master of the Rolls.

Letter from Sir Howard Davies to Peter Sutherland

Dear Peter,

When the reputational consequences for the LSE of accepting the donation from the GICDF became clear, I offered to resign my position as Director. You asked me to reconsider, and to talk first to the Council. At its meeting on Tuesday the Council offered me its support, and I was very grateful for that. But on reflection I have concluded that it would nonetheless 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 believe that the decisions we have made were reasonable, and can be justified. The grant from the foundation was used to support work on civil society in North Africa, which will have value in the future. The training programmes we have run in Libya will also prove valuable in enhancing the practical skills of many people who will be needed under whatever successor regime emerges. I should also say that I have no evidence whatsoever that anyone has behaved improperly in this whole episode. To the best of my current knowledge (though we are currently reviewing the evidence) , the degrees to Saif Gaddafi were correctly awarded, and there was no link between the grant and the degrees.

But however laudable our intentions, in the light of developments in Libya the consequences have been highly unfortunate, and I must take responsibility for that. 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 (modest and unpaid) work, and I disclosed it fully, but the consequence has been to make it more difficult for me to defend the institution than it would otherwise have been.

So I think it would be better for the institution if we announce that I intend to step down. I know this will cause some short-term disruption, but I have concluded with great sadness that it is the right thing to do. I am of course willing to help with the transition in any way I can, and to stay on for a period of time if that is helpful. I am grateful to you and your predecessor Tony Grabiner for giving me the opportunity to lead this fine University, and I wish it every success in the future.

Yours ever

Howard Davies

For further information see: statements on LSE and Libya|

Lord Woolf's inquiry into LSE and Libya|

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