Education Department Intensifies Pressure on Colleges Over Foreign Gifts Reporting

June 23, 2020 Updated: June 23, 2020

Universities and colleges in the United States will need to provide more information when they report to the federal government about gifts and contracts involving foreign sources, according to the Education Department.

In an effort to step up its scrutiny of institutions receiving gifts from foreign entities, the Education Department on Monday launched a new online portal that all institutions must use to report foreign gifts and contracts valued at $250,000 or more.

The new reporting system requires institutions to answer specific questions regarding their financial ties with foreign individuals and organizations. The department said in a statement that it is currently “not receiving sufficient information” to determine whether each school is properly reporting foreign gifts as mandated by federal law.

For example, the department said institutions must answer “specific questions about each reportable transaction involving a foreign source, such as whether the foreign source is a foreign government, a foreign legal entity, an individual who is not a citizen or national of the United States, or a person acting as an agent of a foreign source.”

“This is about transparency,” Education Secretary Betsy DeVos said earlier this year,¬†referring to an ongoing investigation into the disclosure of foreign funding at Harvard and Yale University. “If colleges and universities are accepting foreign money and gifts, their students, donors, and taxpayers deserve to know how much and from whom. Moreover, it’s what the law requires.”

Over the years, a number universities across the country have been found not properly reporting hundreds of millions of dollars in foreign gifts and contracts. A 2019 report by the Senate Permanent Subcommittee on Investigations noted that nearly 70 percent of colleges that received $250,000 or more in annual funding from Hanban, the Chinese government agency that oversees the Confucius Institutes around the world, failed to disclose those payments.

Earlier this month, Sens. Rob Portman (R-Ohio) and Tom Carper (D-Del) introduced the Safeguarding American Innovation Act (pdf), which aims to prevent China from indirectly stealing U.S.-funded intellectual property from U.S. academic institutions. The legislation would lower the reporting threshold for foreign gifts from $250,000 to $50,000, and give the Education Department the authority to punish schools that fail to properly report.

“China has made it no secret that its goal is to surpass the United States as the world leader in scientific research,” said Portman, addressing the Senate. “One way it’s been doing that is by using secret contracts here in the United States with researchers, again, funded by tax dollars, doing research, medical research, scientific research, military research.”

“The Chinese government has actually been paying these people to provide information to the Chinese government to take this research paid for by U.S. tax dollars,” he continued. “It’s wrong. It needs to stop.”