U.S. colleges, universities failed to disclose billions in foreign gifts, Trump admin finds

Education Department probe found schools since 2014 receiving nearly nearly $1.5 billion in gifts, contracts from China.

Updated: October 21, 2020 - 12:18pm

The Facts Inside Our Reporter’s Notebook

An investigation by the Department of Education found that U.S. colleges and universities failed to disclose at least $6.5 billion in foreign gifts and contracts.

Schools are required by federal law to disclose significant foreign gifts to the department twice a year. Any amount exceeding $250,000 must be reported. Many schools avoid the reporting  altogether, while some underreport the amounts.

When the department opened an investigation into 12 universities, a flood of new disclosures from similar institutions began pouring in. 

From 2014 to 2020, U.S. universities reported receiving nearly $20 billion in foreign gifts and contracts, including almost  $1.5 billion from China, more than $3 billion from Qatar, and $1.1 billion from Saudi Arabia. 

Harvard University reported receiving nearly $116 million from China, the most of any school in the country, while Carnegie Mellon University received $1.6 billion in foreign gifts and contracts, the highest total amount of any school.

"We found pervasive noncompliance by higher-ed institutions and significant foreign entanglement with America's colleges and universities," said Education Secretary Betsy DeVos when she unveiled the findings of the investigation on Oct. 20. "The threat is real, so we took action to make sure the public is afforded the transparency the law requires."

According to the department's report, U.S. universities have long been on high alert that significant amounts of foreign dollars are coming from countries hostile toward the U.S. in an effort to "project soft power, steal sensitive and proprietary research, and spread propaganda."  

Section 117 of the Higher Education Act allows the department to refer cases in which a school has failed to report a foreign gift exceeding $250,000 to the Justice Department, which can obtain the records of the transaction form the institution. 

While schools systematically fail to report and underreport foreign gifts, some schools also anonymize gifts coming from hostile sources, including more than $1.1 billion in gifts from unidentified sources in China, Saudi Arabia, Qatar, and Russia.