University keeps gift as donor's tax trial kicks off

November 8, 2002

Cambridge University has denied having any misgivings about keeping the $4 million (£2.5 million) donation it accepted from an American tycoon on trial this week for fraud and tax evasion.

Dennis Kozlowski and the Tyco Corporation, of which he was previously chairman, made the donation in 2000 via the university's American development office. It was used to establish the Robert A. G. Monks chair in corporate governance at the Judge Management Institute.

Mr Kozlowski was charged with corporate corruption in September for attempting to loot $600 million from the company since 1995. He is also under investigation for allegedly evading income tax and $1 million in sales taxes.

A Cambridge spokeswoman said: "Any chair and funding is subject to ethical scrutiny and subsequent approval by the Cambridge academic community. These processes were followed in respect of this donation."

She added: "The current board of Tyco has not made any inquiries of the university in respect of this donation, which is in the public domain."

The university's ethical guidelines on the acceptance of benefactions do not veto acceptance of donations that, among other factors, arise from tax evasion or come from unproven allegations of criminality against the potential donor.

They say that the vice-chancellor should be made aware of the situation and that "care will be exercised in accepting any benefaction where there is a risk of significant damage to the university's reputation".

There is no body that monitors or oversees private donations to universities. Decisions on whether to accept donations are up to individual governing bodies.

Universities UK has recently set up a working group to look at sensitive funding issues. With the Association of Medical Research Charities, it is looking to broaden the existing protocol, which covers only donations from the tobacco industry.

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