FORMER CHAIRMAN of BP, Peter Sutherland, should have been told of untruthful claims by a son of Col Gadafy that part of a £1.5 million donation he offered to the London School of Economics was being funded by the petroleum company, an inquiry found.
The inquiry into the donation controversy, which forced the resignation of the LSE’s director, Sir Howard Davies, found no evidence that the company, then chaired by Mr Sutherland, knew anything of the donation offered by Saif al-Islam.
In his report, Lord Harry Woolf, said it was “a matter of particular regret” that Mr Sutherland, who also chairs the LSE’s governing council, was not told by LSE staff about the BP claim before a decision was made by the council to accept the money.
“Peter Sutherland, at the time both chairman of LSE’s council and chairman of BP, was not told that BP had been cited as a sponsor of the gift.
“He was not aware BP had been cited by Saif as a source until I told him so in interview,” said Lord Woolf.
“That is a matter of particular regret since, had Peter Sutherland known, he could have told council of the inherent unlikelihood that BP would ever make a donation to the LSE through the conduit of Saif Gadafy’s foundation,” said the former judge.
Lord Woolf said the efforts of LSE executives to develop links with the now-ousted Libyan regime “have clearly brought to light shortcomings in communication and governance within the LSE” and sharply questioned the role played by the former director of the LSE, Sir Howard Davies.
Ties between the LSE and Libya developed significantly after November 2001 until February this year, after Saif al-Islam came to study for an MSc. He later went on to do a PhD – even though there were doubts at the time about his abilities and even fears that he had sent someone to sit an exam for him.
During long-running talks with Mr Davies, who resigned in the wake of controversy about the offer, Saif al-Islam claimed the money would come from his charitable donation from payments made to it by BP, British Gas and Shell, though none of the companies had, in fact, done so.
The acceptance of the first part of the gift, which subsequently sparked protests at the LSE, was approved at its council’s June 2009 meeting, but the council was not told which three companies were to support the gift.
Mr Sutherland declared “what might be considered a conflict of interest” at the June meeting because of BP’s existing commercial interests in Libya – not because of the donation – and did not take part in discussions about the offer, although he was present.
The discussion at the meeting had centred on whether the LSE should deepen ties with the Libyan regime, and not on the source of the donations, said Lord Woolf, who quoted Mr Sutherland as saying that “every effort was being made to help Libya, so why should we resist and not take a donation, rather than it being a discussion about whether we received money”. However, the judge said that while the LSE’s council had “ultimate responsibility for the acceptance or refusal of gifts” it did not mean that that should be part of its day-to-day work because “the council is not suited to perform this task”.
“As Peter Sutherland described to me, it is clear that a body of 32 members cannot be used as a management tool. It is a body charged with making important decisions of principle,” he said.