Department of Education Investigates Foreign Gifts to U.S. Universities

The Department of Education (DOE) appears to be stepping up scrutiny of American universities’ disclosures of foreign gifts and contracts. Several universities have received letters from the Department requesting information related to foreign gifts and contracts.

Section 117 of the Higher Education Act requires that institutions report to the federal government any gift or contract with a foreign source valued at $250,000 or more “considered alone or in combination with all other gifts from or contracts with that foreign source within a calendar year.” On September 26, the DOE sent a letter to the University of Maryland (UMD) expressing concern that the university’s disclosures “may not fully capture all gifts, contracts, and/or restricted and conditional gifts or contracts or with all foreign sources to the University of Maryland and/or its affiliated entities operating substantially under the auspices of your institution for its benefit.” The letter requested records of foreign gifts and contracts connected with China, Qatar, and Russia.

DOE also sent letters to Georgetown University and Texas A&M University in June, notifying them of investigations related to their reports of gifts and contracts from foreign sources. The letter to Georgetown requested records of gifts from and contracts with foreign sources such as the governments of China, Saudi Arabia, and Qatar. Georgetown reported more than $36 million in foreign-sourced gifts in 2018. DOE also requested information from Texas A&M regarding gifts from and contracts with the governments of China and Qatar. Cornell and Rutgers are under similar investigation.

Several higher education associations have sought clarification of rules regarding federal reporting of foreign funding, including whether gifts made to a foundation affiliated with the university must be reported. The letter to UMD references gifts made to the University of Maryland Foundation and other affiliated UMD organizations, and the letters to Georgetown and Texas A&M contain similar language.

Foreign funding for U.S. universities has come under increasing scrutiny amid concerns of foreign influence in the U.S., including reports of Russian meddling in U.S. elections and censorship by the Chinese government. A Senate report on funding from China to American universities found that nearly 70% of colleges that received more than $250,000 in funding failed to properly report that information to the DOE. The report remarked that “foreign government spending on U.S. schools is effectively a black hole, as there is a lack of reporting detailing the various sources of foreign government funding.”

The Department of Justice (DOJ) has also addressed foreign influence in the U.S. through aggressive enforcement of the Foreign Agents Registration Act (FARA).