Nadav Safran, director of Harvard's Center for Middle Eastern Studies, will resign his post at the end of the academic year, following a three-month investigation into his handling of two Central Intelligence Agency (CIA) grants totalling more than $150,000.

The investigation, which was conducted by Dean of the Faculty of Arts and Sciences A. Michael Spence and which culminated in a six-page report released last week, found that the University had erred in the handling of one of the grants. The report reiterates an earlier statement faulting Safran for mishandling the other grant.

Spence said in an interview that Safran was told he could stay on as director but that he had chosen to step down. When asked whether he had recommended that Safran resign, Spence declined comment.

The report says that Safran "would prefer" to step down "under circumstances of continuing controversy associated with the Center, and out of a commitment to the interests of the Center and his colleagues."

Safran, director of the center since 1983 and a tenured faculty member since 1964, will retain his lifetime post as Albertson Professor of Middle Eastern Studies in the Government Department. Spence says in the report that Safran's "erudition and objectivity as a scholar have not been questioned and are not in question despite the recent controversy."

Major Points

In addition to revealing Safran's impending resignation--which Spence says he accepted "with sadness and deep reservation"--the report details the results of official inquiry into the two CIA grants in question.

Spence concludes that:

* Safran had failed to disclose properly a CIA of grant of $45,700 for a conference on Islam and Muslim Politics held three months ago. Spence reached the same conclusion after a brief investigation prior to the conference, but allowed it to go forward after Safran agreed to reveal the CIA funding to all participants. More than half the scheduled participants boycotted the October meetings after learning of the CIA grant.

* Harvard was at fault regarding a $107,430 CIA grant for Safran's recently published book, "Saudi Arabia: The Ceaseless Quest for Security." Spence states that in 1982, Safran properly reported the funding to then Dean of the Faculty Henry Rosovsky, calling his attention to controversial contract stipulations giving the CIA pre-publication censorship rights and requiring Safran not to reveal the CIA funding in the book. But, Spence reports, Rosovsky--who is identified in the report not by name but by title--made "administrative errors" in neither reviewing the terms of the contract nor responding to Safran's disclosure of them.

* The center's six-member faculty Executive Committee will be disbanded, with control passing to a new director--yet to be named--and the previously less-involved faculty Standing Committee on Middle Eastern Studies. In his report, Spence calls the Executive Committee a "divided body" and says that "as currently constituted" it "cannot serve a useful function." Three members of the body called publicly for Safran's resignation after the October conference, an action that Spence says "deeply offended" at least one other committee member.

"Cold-Hearted"

Safran, who has refused to comment to The Crimson since the newspaper first reported his acceptance of the grants in October, last week said in an interview with The New York Times that the report exonerates him of charges that he had tried to cover up the two grants. But, Safran said Harvard had been "cold-hearted at best" in not acting sooner to avoid damaging his reputation.

Spence said in an interview that his investigation uncovered no evidence of other contracts or grants with problems similar to the two documented in the report. He said he has taken steps to ensure that such policy violations and faculty oversight do not occur again.

Reports of Safran's acceptance of the two grants has drawn criticism from scholars at Harvard and around the world. Spence's report and news of Safran's resignation as director of the center has drawn international media attention, making headlines in England, Kuwait and Israel, among other nations.

The 1800-member Middle Eastern Studies Association of North America (MESA), at its annual convention in November, voted overwhelmingly to "deplore" Safran for violating its 1982 resolution calling on academics and institutions to reveal funding sources in advance.

And earlier that month, more than half of the 35 local graduate students associated with the Harvard center called on the University to ban all intelligence agency funding and reduce the director's authority.

Throughout the controversy, Harvard officials have maintained that University policy does not prohibit acceptance of CIA funds, but requires that such contracts be disclosed in advance and conform to generally accepted research policies guaranteeing academic freedom.

Book Contract

In discussing the contract under which the CIA granted Safran funds for researching his book on Saudi Arabia, Spence says in the report that Safran had properly notified not only Rosovsky, but also an acquisitions editor at Harvard University Press, which published the book in the fall.

Safran acknowledged grants from the Rand Corporation and the Rockefeller Foundation--but not the CIA--in the book's preface, and has said that the spy agency made no changes in the work. (see related story, page one)

Spence devotes much of his discussion of the book contract to the issue of determining whether Harvard's general research guidelines would apply to a "personal" CIA contract like the one Safran signed.

When researchers use Harvard's facilities, staff, students, resources, or name to the extent that their work falls under the "aegis" of the institution, Spence says, then prepublication review and other measures that might compromise academic freedom are not permitted.

But in the report, Spence does not determine the degree of Harvard's institutional involvement. Instead, he says that Safran properly offered Rosovsky an opportunity to review the contract, and that no determination of Harvard's involvement was made at that time.

Spence acknowledges earlier reports that Safran made "some use of the facilities and personnel of the center during the performance of his research contract," and faults the University for not looking into the extent of Harvard's institutional involvement.

Rosovsky, who was out of the country yesterday and could not be reached for comment, told The New York Times last week that his office had made an "administrative error."

"I regret that," he said.

Spence's report reiterates his October 11 statement finding Safran had erred in the handling of the CIA grant for the conference on Islam and Muslim Politics held October 15-16 at the Faculty Club. More than half of the 25 scheduled speakers boycotted the conference after learning of the source of funding, and one returned to Cairo immediately after arriving in Cambridge.

The new report finds three "problems" associated with Safran's handling of the conference grant: that the director did not disclose the contract to the dean of the faculty, as required by University policy; that Safran did not disclose the source of the funding to conference participants, as the center's six-member executive committee had recommended; and that Safran did not channel the contract through the University, which routinely receives a portion of the funds to cover overhead costs.

Safran said during the fall that he accepted the conference money "as an individual," not on behalf of the center, and therefore did not have to report the grant. Safran last week told The Boston Globe that he "made a mistake in judgment in not informing [the conference participants] as soon as the CIA funding came into the picture, and I attempted to repair the damage by doing so before the conference began."

In the report, Spence formally apologizes to conference participants, scholars in the Middle Eastern Studies field and to the academic community at large, saying he is determined "to see that this type of problem will not arise again."

Spence states: "The problem of disclosure of the conference contract may have caused a loss of confidence in the Center and in the University's ability to follow effectively its policies in areas that are crucial to scholars."

Committee Disbanded

In announcing that he will disband the six-member faculty executive committee overseeing the center, Spence uses unusually strong language, the strongest of the report.

Spence, calling the executive committee "a divided body," states that as currently constituted it can no longer serve a "useful function." Spence states that the three members who in October called for Safran's resignation did so without consulting their colleagues and before a review had been launched.

Aga Khan Professor of Iranian Richard N. Frye and Professor of the History of Arabic Science Abdelhamid I. Sabra, two of the three committee members asking for Safran's resignation, said they had reached one of the two other executive committee members, who declined to join them, and were unable to reach the other. The third committee member calling on Safran to resign, Professor of Arabic Wolfhart P. Heinrichs, could not be reached for comment.

The two executive committee members who did not call for Safran's resignation--Robert J. Murray, director of the National Security Program at the Kennedy School of Government, and Coolidge Professor of History David S. Landes--also could not be reached for comment.

Sources said Landes is the one executive committee member said in Spence's report to have been "deeply offended" by his colleagues' efforts against Safran, who is the sixth executive committee member.

In its concluding paragraph, the report states that the six-member faculty standing committee on Middle Eastern Studies will "take a much more active role in the oversight of the Center and its policies."

Spence said a search for a new director has not yet been launched. Christopher J. Georges contributed to this report.