The Education Department Should Reverse Its Decision and Provide Real-Time Access to University Foreign Funding Disclosures
Frustrated by decades of foreign gift and contract disclosure failures by America’s universities, in June 2020 the U.S. Department of Education launched an online portal for reporting foreign source gifts and contracts valued at $250,000 or more per calendar year, as required by Section 117 of the Higher Education Act of 1965.
But in June 2024, the Education Department announced that due to a “contract change” it had decommissioned the reporting portal’s interactive data table for analyzing foreign funding disclosures. The Department’s inexplicable decision removed an important tool for accountability after decades of massive disclosure failures by universities.
Why did the Department create the foreign funding reporting portal? Because of widespread foreign funding disclosure failures by America’s universities.
In February 2019, the U.S. Senate Permanent Subcommittee on Investigations issued a bipartisan staff report entitled “China’s Impact on the U.S. Education System.” Describing foreign government spending at America’s universities as “effectively a black hole,” the report found that nearly 70% of colleges and universities had failed to disclose foreign funding as required by Section 117.
In response, the Department opened civil investigations into more than a dozen universities, including Harvard, Yale, Georgetown, MIT, and the University of Maryland. As it publicly reported in October 2020, the Department discovered billions in previously undisclosed foreign funding, including at universities that “are technological treasure troves, where leading and internationally competitive fields, such as nanoscience, are booming.”
Noting that Yale failed to disclose even a dime in reportable foreign funding between 2014 and 2017, the Department found that Yale had failed to disclose approximately $375 million in foreign gifts and contracts (although Yale’s noncompliance period paled compared to Case Western Reserve’s astounding 12 years of disclosure failures).
The Department noted in June 2020 that Stanford had failed to disclose the identities of Chinese entities and individuals who had given Stanford more than $64 million since May 2010. Stanford’s disclosure failures were concurrent with the exponential growth of Stanford’s ties with China.
Stanford’s serious disclosure failures came to light again in its settlement agreement with DOJ last October. Despite being one of the largest university recipients of federal research grant funding, Stanford repeatedly failed to disclose Chinese-funded research agreements even as it was applying for important federal research grants from the Departments of the Army, Navy, Air Force, NASA, and the National Science Foundation.
In response to the Department’s investigations and creation of the reporting portal, more than $6.5 billion in previously undisclosed foreign funding came to light. The reporting portal led to an additional $3.8 billion in foreign funding disclosures by universities, including approximately 7,000 related transactions.
Without the reporting portal, the media and Congress almost certainly wouldn’t have unearthed the University of Pennsylvania’s extensive financial ties with China, particularly following the January 2017 establishment of the Penn Biden Center.
Nearly $130 million in “donations” came from China to UPenn between 2018 and 2023, with tens of millions coming from anonymous entities and individuals, prompting an investigation by the U.S. House Committee on Oversight and Accountability.
The Department’s reporting portal had provided a critical search tool for Congress, the media, and taxpayers to see and analyze the often-staggering inflow of foreign funding to many of America’s most prominent research universities.
If the Department’s renewed enforcement efforts were like a 12-step program, most of America’s universities were well on the way to disclosure sobriety.
Now, by “decommissioning” a critical component of the reporting portal, the Department and its leadership can continue to access university foreign funding information, but Congress, the media, and the American people can take a hike.
Unfortunately, this isn’t an isolated development in the enforcement of Section 117’s foreign funding reporting requirements.
Despite, or perhaps because of its enforcement successes, in 2022 the Department shifted oversight responsibilities from the Department’s Office of the General Counsel to the Office of Federal Student Aid. FSA has no demonstrated competency, capacity, or interest in conducting meaningful Section 117 enforcement.
That move followed DOJ’s closing down of its “China Initiative,” which had effectively prioritized federal investigations of China’s undisclosed, dangerous access to America’s research innovations developed at our universities.
Supreme Court Justice Louis Brandeis once wrote that “sunlight is … the best of disinfectants.
Now, instead of continuing the much-needed sunlight for the universities that the reporting portal provided, the Department has imposed a partial eclipse. This is a nonsensical and perilous development, given the long history of many universities defying their simple foreign funding disclosure obligations.
China has clearly targeted the valuable research products developed at our universities.
FBI Director Christopher Wray has testified that “the tools in [China’s] toolbox to influence our businesses, our academic institutions, our governments at all levels are deep and wide and persistent.” Wray recently warned that China “has made it clear that it considers every sector that makes our society run as fair game in its bid to dominate on the world stage.”
China, through its extensive financial ties with our research universities, has a real-time seat at the table where many of America’s greatest technological innovations are developed, despite the national security implications for the U.S.
The Education Department should immediately reverse course and provide a real-time seat at the foreign funding disclosure table for Congress, the media, and the taxpayers to see and analyze foreign funding disclosures made by our universities.
