By Karla Adam
Washington Post Foreign Service
Friday, March 4, 2011; 12:51 PM
LONDON - The head of the London School of Economics resigned his post late Thursday, citing damage to the institution's reputation caused by its ties to the Libyan government.
Howard Davies told a BBC radio program Friday that the university would recover from the controversy but added, "It will recover more quickly if I accept the responsibility for two errors of judgement."
Although he insisted that its academic independence had not been compromised, Davies conceded he gave the school "poor advice" regarding its decision to accept a donation from a charity run by Saif al-Islam Gaddafi, Col. Moammar Gaddafi's political heir and an alumnus of the school.
He also said he regretted acting as an economic envoy to Libya, saying that in doing so, he had "muddled" his previous experience in the financial sector with his role as director of the school.
The scrutiny directed at the London School of Economics' financial ties with Libya's embattled government intensified Thursday following publication by the WikiLeaks Web site of a leaked U.S. diplomatic cable. The cable indicated that Libya had agreed to pay the school $3.6 million - $2.4 million of which has been received - to train 400 Libyan professionals and government employees.
Davies denied wrongdoing on that point. "To say that we will not train officials in developing countries because of things their regimes might or might not do I think is very curious," he told the BBC.
Nestled between narrow streets in central London, the London School of Economics has a large international student body and is widely regarded as one of Britain's leading universities.
On Thursday evening, the school announced it was launching an independent inquiry to examine its relations with Libya, as well as allegations that Saif Gaddafi had plagiarized his PhD thesis, accepted by the school in 2008 and titled "The Role of Civil Society in the Democratisation of Global Governance Institutions."
The Monitor Group, a consulting firm based in Cambridge, Mass., said in a statement earlier in the day that it had provided "research support" for the dissertation, a step it described as "ill-considered."
On Tuesday, the London School of Economics said it plans to redirect the $488,000 research donation it received from the Gaddafi International Charity and Development Foundation to a scholarship fund for students from North Africa.
David Held, an academic adviser to Saif Gaddafi, described his student in a statement as "a young man who was caught between loyalties to his family and a desire to reform his country." He added: "My support for Saif al-Islam Gaddafi was always conditional on him resolving the dilemma that he faced in a progressive and democratic direction."
Davies, who will stay on until a successor is found, has been a popular figure at the school since taking up his post in 2003. A respected economist, he is a former head of London's Financial Services Authority and a former deputy governor of the Bank of England.
In a statement Thursday evening, 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."