Dealings with Gaddafi son embarrass London college

LONDON Fri Oct 28, 2011 6:46pm EDT

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LONDON (Reuters) - One of its founders was George Bernard Shaw, its professors have included Friedrich von Hayek and Bertrand Russell and among notable former students are John F. Kennedy and the current Greek prime minister.

But the London School of Economics (LSE), one of the most renowned branches of the University of London, is currently making news due to the activities of a couple of its more infamous, rather than famous, alumni - one of them named Gaddafi.

On Monday, Victor Dahdaleh, a former LSE student and businessman whose fundraising earned him a place as one of the school's governors, will appear in a London courtroom on bribery charges brought by Britain's Serious Fraud Office (SFO).

The charges relate to bribes Dahdaleh allegedly paid to officials of Aluminum Bahrain B.S.C., a smelting company whose majority owner is the Bahrain government. On Friday, the SFO confirmed a Financial Times report that one allegation is that Sheikh Isa bin Ali al-Khalifa, an advisor to Bahrain's prime minister, received nearly $6 million in bribes from Dahdaleh in 2003-2004.

Following Dahdaleh's arrest earlier this week, LSE said that it was reconsidering Dahdaleh's position as a school governor. On Friday, a spokesman for the school said that the matter was still under review but that an announcement could come soon.

Meanwhile, LSE is also awaiting, with trepidation, results of two parallel investigations into the school's dealings with Libya and with Saif al Islam Gaddafi, one time heir-apparent to his late father, Muammar and holder of a doctorate awarded by LSE in 2008.

Lord Harry Woolf, a former Chief Justice of England and Wales, was hired by LSE in March to investigate several aspects of the school's dealings with Gaddafi's Libya. Issues under scrutiny included LSE's agreement to accept a 1.5 million pounds (sterling) donation to a school think tank on Global Governance from a Gaddafi family charity; the agreement of an LSE commercial affiliate to a 2.2 million pound contract with Libya's economic development board to train Libyan civil servants, and the school's acceptance of a $50,000 donation in return for advice LSE director Sir Howard Davies gave to Libya's sovereign wealth fund in 2007.

A related investigation is being conducted by the University of London into allegations of "ghostwriting" and plagiarism in the production of Saif al Islam 's PhD thesis.

The thesis is entitled "The role of civil society in the democratization of global governance institutions: from 'soft power' to collective decision-making". It helped build Saif al Islam's reputation as a potentially enlightened successor to his eccentric father.

Saif al Islam certified that the thesis "is solely my own work other than where I have clearly indicated that it is the work of others." But allegations later surfaced that he had been aided by a ghostwriter and had copied passages of his dissertation from other people's work.

The school said in March that "no formal allegations had been made as to academic misconduct until the events of recent weeks." But now there are detailed postings on the internet highlighting portions of Saif al Islam's dissertation which he allegedly purloined.

Lord Woolf posted an announcement earlier this month on the internet saying he had finished his investigation and had submitted a report to university authorities, which he hoped would be "published as early as possible." School officials expect Woolf's report will contain criticisms, perhaps harsh ones, of LSE's handling of its contacts and dealings with Libya and the Gaddafis.

However, spokespeople for LSE said that the University of London had not yet finished its investigation into the authenticity of Saif al Islam's doctoral thesis. Because the thesis investigation was related to Woolf's broader inquiry into LSE's dealings with Libya, school officials said, the release of Woolf's report will be held up until the inquiry into Saif al Islam's thesis is also completed and ready for release.

It could be a month or longer before the reports are made public, one LSE official said.

Until now Dahdaleh had been very active in supporting and raising funds for LSE and its activities. His official on-line biography describes him as an LSE governor, a "leading donor" to the school, and a member of its "Fundraising Campaign Committee." Dahdaleh also described himself as "honorary president and chairman of the advisory board" of an LSE affiliate called LSE Global Governance, a research outfit which claimed to have "pioneered research into globalization."

LSE Global Governance was also one of the main intended recipients at LSE of money from something called the Gaddafi International Charity and Development Foundation. Although it initially agreed to accept 1.5 million pounds from the Gaddafi charity, however, in the end only 300,000 pounds were actually received.

Late last July, LSE announced that it was shutting down the Global Governance center after its directors concluded that its research "could best be pursued separately and from other academic departments."

According to accounts posted by LSE on its website, the school has been facing criticism and internal turmoil over its dealings with Libya since shortly after Libyan rebels first began their campaign to oust Muammar Gaddafi as the country's leader last February.

Within days of the first large-scale anti-Gaddafi protests, LSE acknowledged that it had begun to reconsider its links with Libya "as a matter of urgency." By February 23, some pupils at the school, which has long had a reputation for student militancy, had occupied a dining room and demanded that LSE reject the money it had agreed to accept form the Gaddafi charity. LSE eventually agreed to set aside 300,000 pounds of its own money - the same sum accepted from the Gaddafi charity - as a scholarship fund for North African students.

By the end of March, as controversy over LSE's dealings with Libya grew, Davies, the school's director, announced his resignation, conceding that his advice to school governors that it was reasonable to accept Gaddafi money "had turned out to be a mistake."

One of LSE's most awkward interactions with the Gaddafis occurred in May 2010 when Saif al Islam was invited to speak on "Libya, Past, Present and Future," as part of a lecture series dedicated to the memory of Ralph Miliband, a renowned left-wing LSE academic who died in 1994.

Miliband's son Ed now leads Britain's opposition Labour Party; Ed's brother, David, served as Britain's foreign secretary under Labour Prime Minister Gordon Brown.

LSE said in a statement on its website that the Miliband family were not consulted in advance about the plans for Saif al Islam's lecture, and that a senior LSE academic had "spoken to the family" about the event "in view of the embarrassment and distress caused to the Miliband family by the association of Ralph Miliband's name with Saif Gaddafi."

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