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Governance expert resigns over finances

A renowned Yale economist and corporate governance expert is stepping down as a result of financial misconduct, university officials said Monday.
/ Source: The Associated Press

A renowned economist who headed Yale University's International Institute for Corporate Governance is resigning as a result of financial misconduct, university officials said Monday.

Florencio López-de-Silanes, who advised governments and companies around the world on the best corporate practices, will resign June 30 "as a result of financial misconduct and irregularities" as director of the institute, said Yale spokesman Tom Conroy.

Conroy would not comment further, other than to say, "Appropriate corrective actions have been taken and he will be on unpaid leave until his resignation is effective."

But a source familiar with the matter, who spoke on condition of anonymity, confirmed a report in The Wall Street Journal on Monday that Lopez-de-Silanes allegedly double-billed the New Haven, Conn.-based institution for about $150,000 in business-travel expenses since mid-2001.

López-de-Silanes, 38, issued a statement acknowledging an error.

"I made a mistake and I deeply regret any unintended harm," he said. "I have taken appropriate corrective steps with all affected parties and I can offer no excuse except the intensity of my focus on my work. I am leaving Yale because it is the right thing to do for the institute and all concerned."

The World Bank is conducting a separate inquiry into contracts awarded to López-de-Silanes, according to spokesman Damian Milverton.

López-de-Silanes has worked for the World Bank and the International Monetary Fund on issues of corporate governance and advised the governments of Russia, Mexico, Egypt, and several other countries "on issues of financial markets' regulation, corporate and bankruptcy law reform, industrial policy, and privatization," according to his Yale Web site.

One of his working papers he co-authored was titled, "Theft Technologies."

López-de-Silanes was wooed from Harvard's Kennedy School of Government to open Yale's corporate governance center in 2001.

He has won many awards, having been honored by the Switzerland-based World Economic Forum as one of the world's 100 outstanding global leaders.

"It is sad and ironic -- more sad than ironic -- that a young star teaching governance ends on in this predicament," said Douglas Rae, a professor of management at Yale.