The school began reviewing its relationships with Saudi Arabia in October amid a global uproar over Khashoggi's killing. MIT is among dozens of U.S. universities that accept funding from the Saudi government, but it has stood out for its close relationship with the country's national oil company and other government-owned institutions.
Associate Provost Richard Lester, who led the review, criticized Saudi Arabia's role in the killing, along with its "repressive policies" in other areas, but he said none of the institutions MIT works with had any role in Khashoggi's death. Cutting ties would curb important research, he said, while doing nothing to fix the country's problems.
"These organizations are supporting important research and activities at MIT on terms that honor our principles and comply with our policies," he said in the report. "They are also providing critical resources to support the education of outstanding Saudi students and women scientists and engineers, who will surely be in the vanguard of social change in that country."
Still, Lester said the killing likely puts an end to earlier discussions about a major expansion of the school's work in Saudi Arabia. In previous conversations, he said, some at MIT suggested that by broadening ties, the institute could help steer the kingdom toward more progressive policies.
"The Khashoggi murder has deflated many of those hopes," Lester wrote.
The report revealed what Lester called a "disturbing" connection between the Khashoggi murder and MIT's campus. When Prince Mohammed bin Salman visited the school in March, his entourage included Maher Mutreb, who was later identified by the U.S. government as one of 17 Saudis who organized and carried out the killing of the Washington Post columnist.
"This individual had engaged with members of the MIT community at that time - an unwelcome and unsettling intrusion into our space, even though evident only in retrospect," Lester wrote.
His report suggests that the school should welcome only "appropriate" Saudi visitors in the future, but does not elaborate further.
Lester's report was based on input from students, faculty and alumni, along with outside experts on Saudi Arabia. It now goes to MIT President Rafael Reif, who called for the review and will make a final decision.
Since the killing, some on campus have called for an end to all financial ties with the kingdom. In an open letter in October, more than 20 graduate students in political science urged Reif to take a stand against Saudi Arabia. Along with the murder, they pointed to the kingdom's alleged human rights abuses in neighboring Yemen and against women in its own country.
Nicolas Dumas, one of the students who signed the letter, said Thursday that it is "absurd" to claim MIT's Saudi partners are free from blame in the killing. He noted that several U.S. senators briefed by the CIA believe the killing can be traced to bin Salman, who personally met with Reif during his March visit to MIT.
"This government has committed a variety of human rights violations," Dumas said in an email. "The claim that somehow MIT's hands aren't bloody because they're only working with Mohammed bin Salman is frankly ridiculous."
But in his report, Lester said some on campus pushed just as strongly for continued collaboration. If individual researchers want to back out of projects with the kingdom, he said, the school will help arrange it without disrupting the work.
The report didn't detail how much MIT receives from Saudi sources, but it said 52 percent has covered "sponsored research" over the last three years, primarily from state-owned institutions like Saudi Aramco, the kingdom's national oil company; SABIC, a national chemical company; and the King Abdulaziz City of Science and Technology, a research center.
Meanwhile, 44 percent came from private and corporate donors, and another 4 percent came from a variety of smaller Saudi-funded programs.
A previous Associated Press analysis of federal data found that MIT is among 37 U.S. universities that received $350 million from the Saudi government over the last decade. Much of that came through a scholarship program that covers tuition for Saudi students in the U.S., but at least $62 million came from contracts and gifts from Saudi-owned sources.
MIT specifically has received at least $4 million from Saudi Aramco, the data showed, along with $73 million in private donations from Mohammed Abdul Jameel, a Saudi businessman who graduated from MIT in 1978 and supports research in areas including poverty and education.
Besides MIT, few other schools said they were reviewing their ties to Saudi Arabia following Khashoggi's murder. Several schools defended their work with the country, including the University of California, Berkeley, which has a $6 million contract to develop nanomaterials that can be used to support renewable energy.
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