Biden to ax Trump investigations of secret foreign money in higher ed, college groups say

Academic freedom group says the reported pledge looks like a "simple case of the chickens letting the fox manage the henhouse."

Updated: October 9, 2022 - 11:16pm

The Biden administration plans to shutter its predecessor's investigations into undisclosed foreign funding of U.S. colleges and universities, the subject of years of warnings from elected officials, law enforcement and academic freedom groups, according to higher education lobbyists.

The commitment was recorded in an August letter from a higher ed lobbyist recapping a June 23 virtual briefing by top Department of Education officials for the American Council on Education (ACE) and other university groups, including the Council on Governmental Relations (COGR), which includes medical centers and independent research institutes.

Section 117 of the Higher Education Act requires institutions of higher education to file disclosure reports twice yearly that document their gifts from, or contracts with, foreign sources that are valued at $250,000 or more individually or cumulatively within a calendar year. 

Higher education groups are miffed at the department for "substantial expansion of Section 117 reporting requirements, similar to what was proposed" under the Trump administration, ACE Senior Vice President Terry Hartle told Office of the Under Secretary Chief of Staff Melanie Muenzer, General Counsel Lisa Brown and Office of Federal Student Aid COO Richard Cordray.

"We also remain concerned that ED continues to assert" that an institution's failure to report foreign gifts violates its "Program Participation Agreement" for federal student aid eligibility, Hartle wrote in the Aug. 16 letter recounting the meeting on behalf of the higher ed groups.

But they are "pleased to learn that ED plans to close the outstanding Section 117 investigations that remain open," he said.

Those plans aren't disclosed in the slide deck by Brown and Cordray for the meeting, which the department said was organized by ACE but which COGR said was called by the feds. It happened about a month before the next disclosure deadline.

The discrepancy was apparently first noticed by Hogan Lovells lawyers who summarized the updated federal guidance on Section 117 for the legal publication Lexology Sept. 19. The Chronicle of Higher Education reported on ACE's letter recounting the pledge Oct. 5.

Asked if department officials explained why they were closing investigations or portrayed it as a policy change, ACE Vice President of Public Affairs Jon Riskind told Just the News, "I'll defer to what's in the letter."

A department spokesperson did not answer whether the pledge was premeditated or represents a policy change; clarify who called the meeting; or explain why the new administration has yet to open a Section 117 investigation of its own.

"The Department is committed to helping institutions of higher education understand and comply with the reporting requirements of Section 117" but is "not in a position to state when it will be closing any of the investigations,"  the statement read, pointing to its list of investigations and closures, which detail the allegations and resolutions.

Only four out of 19 have been closed, against the University of Texas (Nov. 25, 2020) and Georgetown, Texas A&M University and University of Alabama (Jan. 15, 2021), with the latter also the most recently opened investigation: Dec. 22, 2020. 

The Trump administration's Department of Education launched a crackdown in 2019 with investigations into Georgetown and Texas A&M for undisclosed foreign funding from China, Russia, Qatar and Saudi Arabia. Qatar alone gave more than $1 billion to U.S. universities from 2011-2016.

Universities responded by reporting $1 billion in previously undisclosed funding going back to 2013, with China representing the largest undisclosed source at $144 million, according to a D.C.-based nonprofit that reviewed consecutive years' reports. Belatedly reported money soon swelled to $6.5 billion, the department said in an October 2020 report.

The National Association of Scholars (NAS), a longtime critic of foreign influence in U.S. higher education, accused Texas A&M in The Wall Street Journal this summer of still hiding $100 million from Russia and Qatar. The university claims the recipient, its Engineering Experiment Station, is not covered by Section 117.

The College Fix found University of Texas and MIT partnerships with a Chinese institute and Russian company that were deemed security risks by the Department of Education. 

Chinese interests gave $168 million to 46 American schools over six months in 2021, including a single $32 million gift to the University of Houston. China's Confucius Institutes on American campuses became such big political headaches that many shuttered locations reopened under new branding, according to a Heritage Foundation review.

The Biden administration's apparent pledge looks like a "simple case of the chickens letting the fox manage the henhouse," NAS spokesperson Chance Layton wrote in an email. 

He pointed to ACE's first letter to the new administration complaining about the department's "continuing punitive and non-responsive actions" toward institutions that had "diligently tried to comply with Sec. 117 for many years" or voluntarily reported "oversights" to the feds.

What some institutions actually did following the Trump crackdown was "obfuscate their financial dealings," such as setting up technically distinct university foundations to "essentially launder money from foreign donors and governments," Layton said, pointing to the Texas A&M workaround criticized by NAS.

"Without knowing the specifics of the outstanding investigations, it's difficult to say whether their closures are a concerning development," even while recognizing that "universities should be expected to properly disclose funding sources," Sarah McLaughlin, director of targeted advocacy for the Foundation for Individual Rights and Expression, told Just the News.

They must also "recognize that some relationships and programs come with greater risk than others," even if the foreign government "never openly demands" infringements on academic freedom, said McLaughlin, who documents the infringements on academic freedom from American institutions' foreign partnerships.

She cited Cornell, which remains under Section 117 investigation, moving forward with a "new dual degree program in China despite clear and repeated community protest over the obvious academic freedom concerns." 

Schools with branch campuses in China and the Gulf states, such as New York University and Georgetown, are heavily incentivized to ignore these concerns because their international partners "can provide significant resources for universities to expand their global reach," she said.

The Biden administration's refusal to open even a single new investigation shows its symbiotic relationship with the "very large special interest organizations" that "do a lot in the way of groundwork to support the Administration's policy and cultural priorities to the detriment of society," Layton said.

He believes universities will continue to receive "blank checks" in federal student aid "because they've become such an entrenched rent-seeking special interest."

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