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DOE report slams universities for unreported foreign funding

By David Schwartz
Published: October 27th, 2020

The Department of Education issued a report last week detailing a litany of failures among universities in complying with rules requiring disclosure of foreign involvement in donations and research funding.

“We found pervasive noncompliance by higher ed institutions and significant foreign entanglement with America’s colleges and universities,” declared Secretary of Education Betsy DeVos. The report pegs the total of undisclosed funding at a whopping $6.5 billion.

According to the report, “most foreign funds flow to a relatively small number of large institutions, many of which appear to have inadequately, or in some cases failed entirely, to report as required by law.”

The DOE’s report comes on top of a rash of investigations, charges, and arrests by other U.S. agencies looking into foreign ties to universities – most notably the Department of Justice.

The investigation found that Yale University did not submit reports for four years — a fact Yale has previously acknowledged and says it has remedied — while Case Western Reserve did not submit reports for 12 years before eventually submitting them “many years later,” the report states.

Of particular concerns, the DOE report adds, is reporting of anonymized donations. For example, DOE alleges that Stanford “has reported over $64 million in unidentified, anonymous Chinese donations since May 2010 (when Stanford ceased reporting foreign donor names).” A Stanford spokesman said that Section 117 of the Higher Education Act “did not require the reporting of names of donors. We complied with the law by providing the required information.”

The report also raises concerns about the risks posed by universities accepting gifts or entering into contracts with governments or nongovernmental entities, including businesses, in countries with adversarial relationships with the U.S.

“The higher education sector has self-reported over $6.6 billion from Qatar, China, Saudi Arabia, and the United Arab Emirates, with the most recent July 31, 2020, reporting period yielding an additional $1.05 billion reported from these countries alone,” the report states, adding that DOES  “believes this amount is a fraction of the true total. The risk to academic freedom, integrity, and independence posed [by] such contributions has been historically ignored by regulators and overlooked or downplayed by the beneficiaries of foreign largess.”

Reed Rubinstein, DOE’s acting general counsel, said the money spent with universities by these countries in often intended “to project soft power, to influence social and political decision makers, to steal sensitive and proprietary research, and to spread propaganda.”

A new portal for foreign gift and contract reporting, launched last June, has so far “recorded approximately 7,000 transactions and approximately $3.8 billion of foreign gifts and contracts from institutions,” according to the DOE report. “Illustrating the Department’s success in increasing statutory compliance, approximately 60 of the institutions who filed a Section 117 disclosure report through the Department’s new reporting portal are ‘new filers,’ meaning that between 1986 and June 2020 these institutions had not previously submitted any reports.”

“This law has been on the book for decades and for decades enforcement was lax, but not anymore,” DeVos said. “This is far from some arcane duty or burdensome obligation as some have suggested. Think about the tremendous wealth of information and resources accessible to foreign adversaries at our nation’s institutions of higher education — military secrets, energy and medical breakthroughs, cutting-edge technology, endless valuable IP, and of course our most valuable resource, America’s young minds. The threat is real, so we took action to make sure the public is afforded the transparency the law requires.”

Some observers has criticized the DOE for being too punitive and overly burdensome in its compliance efforts, accusing DeVos of playing politics with the report.

“The Trump administration has repeatedly refused to meet with colleges and universities to discuss ways to help schools comply with Section 117 Foreign Gifts and Contracts reporting requirements,” said Terry W. Hartle, senior vice president for government relations at the American Council on Education. “Worse, the department has launched punitive investigations of institutions who contacted the department with questions, seeking proactively to ensure they are in compliance.”

Hartle added: “Schools are anxious and willing to comply with all federal reporting requirements. America’s colleges and universities would have been better served if, rather than host a political event focused on China two weeks before the election, the department had elected to answer some of the questions that we have been asking for the last four years.”

Source: Inside Higher Ed

Posted under: University-Industry Engagement Week

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