Feds say US colleges ‘massively’ underreport foreign funding

PTI Washington | Updated on October 21, 2020

A scathing report from the Trump administration on Tuesday concluded that top US universities have massively underreported funding they accept from China, Russia and other nations described as foreign adversaries. The Education Department released the report amid its effort to enforce a 1986 law requiring US universities to disclose gifts and contracts of $250,000 or more from foreign sources. After going decades with little federal oversight, the law has become a priority for the Trump administration amid concerns over economic espionage and trade secret theft from abroad.

The Department’s findings are primarily based on investigations it has opened at 12 schools, including Harvard, Yale, Stanford and Georgetown Universities. Federal officials began investigating the schools amid suspicion that they had failed to report millions of dollars in gifts and contracts from sources in China, Russia, Saudi Arabia and Qatar.

According to early findings in the report, most of the 12 schools have had financial dealings with Huawei, the Chinese tech giant that some US officials say is a threat to national security, and at least one had ties directly to the Chinese Communist Party. Others had deals with the Russian government and institutions in Saudi Arabia and Qatar.

The report did not identify which universities were connected to those entities. Since coming under federal scrutiny, the 12 schools disclosed a combined $ 6.5 billion in foreign funding that was previously unreported, the department said.

The Association of American Universities, said the report is less a serious security assessment than it is a partisan and politically driven attack on America’s leading research universities.

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‘Lax enforcement’

While the Department of Education purports to be concerned about threats, it has consistently failed to respond to repeated requests for clarity, transparency, and guidelines, the group said in a statement.

Some universities had previously acknowledged errors in reporting and sought to correct them. Yale said it failed to submit foreign funding reports for the years 2014-2017 but later corrected the omission.

The department said its review is ongoing and that it is still gathering information from universities.

In announcing the report, Education Secretary Betsy DeVos said her agency uncovered pervasive noncompliance from universities that have significant foreign entanglement.” “For decades enforcement was lax, but not anymore,” she said. “We took action to make sure the public is afforded the transparency the law requires.”

The report echoes warnings from federal authorities who say that competing nations are increasingly targeting US colleges to steal research and technology. It cites recent cases of Chinese nationals accused of working or studying at American colleges while also working for the Chinese government.

The department said its review is only meant to promote transparency and not to determine the appropriateness of specific financial ties. Still, it says the agency plans to wok with the Justice Department on any potential enforcement against specific institutions.

Reporting requirements

It’s not unusual for US colleges to accept foreign funding for research projects or exchange programmes, but federal reporting requirements have long been treated as an honour system. For years, little was done to verify the regular reports colleges submit to the federal government detailing foreign gifts and contracts of $250,000 or more.

That began to change last year, however, after a bipartisan report in Congress raised alarms about colleges’ ties with China. It found that 70 per cent of schools that house a Confucius Institute — a Chinese language programme funded by the Chinese government — failed to disclose its financial ties to the Education Department.

In response to that finding, DeVos began ordering broader investigations into universities’ foreign funding.

The report cites Stanford as an example, saying the school anonymises the names of foreign donors, including Chinese sources that have donated more than $64 million since 2010.

The agency criticised Yale and Case Western Reserve universities for going years without reporting foreign donations, even as both were rapidly expanding their foreign operations and relationships. Universities have pushed back against criticism, saying they sought to follow the law but were given little federal guidance.

Published on October 21, 2020

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