PRESS RELEASE: DFI Demands Answers on Biden Administration’s Weakened Oversight of Foreign Money Pouring into U.S. Universities

Changes come amid a nearly 400% increase in foreign gifts from countries like China to University of Pennsylvania, home of the Biden Center for Diplomacy and Global Engagement

WASHINGTON—The Defense of Freedom Institute for Policy Studies (DFI) is demanding transparency around the U.S. Department of Education’s (ED) apparent move to weaken enforcement of the rules requiring U.S. colleges and universities to disclose foreign gifts or contracts. The changes in enforcement come on the heels of a dramatic increase in foreign gifts to the University of Pennsylvania after that institution announced the establishment of the Biden Center for Diplomacy and Global Engagement in 2017.   

Section 117 of the Higher Education Act requires that institutions of higher education disclose foreign gifts and contracts worth $250,000 or more.  ED’s online portal for reporting foreign gifts, developed by the previous administration, shows that UPenn received approximately $21 million in reportable foreign gifts and contracts from China between UPenn’s announcement of the Biden Center on February 1, 2017, and September of 2020.  An investigative report by The Philadelphia Inquirer exposed an astonishing 389% or $258 million increase in foreign contributions to the university between 2018 and 2019.

“With China’s intensifying political, diplomatic, economic, and military competition with the United States, any failure to police Section 117’s requirements poses national security concerns,” said Robert S. Eitel, President of DFI. “The public has a right to know the identities of foreign governments and their proxies that make gifts or enter into contracts with American universities and to know the amounts of those gifts and contracts. It’s hard to understand why ED would relax enforcement of these transparency requirements.” 

In a speech last week, FBI Director Christopher Wray stressed the many ways in which China poses a bigger threat to the U.S. than the Soviet Union ever did.  In fact, he said, “When we tally up what we see in our investigations—over 2,000 of which are focused on the Chinese government trying to steal our information and technology—there is just no country that presents a broader threat to our ideas, our innovation, and our economic security than China.”  If that’s the case, then it begs the questions DFI is asking: Why has the administration walked back ED’s Section 117 investigations into foreign gifts to U.S. higher education institutions? Who was behind that decision? 

The previous administration took bold action on Section 117 enforcement and uncovered $6.5 billion in undisclosed foreign gifts and contracts to U.S. higher education institutions between 2010 and 2020.  It had also begun work on new regulatory requirements for disclosing foreign gifts and contracts that were not yet in effect when President Biden took office.  In a post-election letter to Mr. Biden on November 18, 2020, the American Council on Education (ACE) asked the incoming administration to act “quickly” to stop the previous administration’s expanded foreign gift reporting requirements under Section 117.  Under pressure from lobbyists representing postsecondary institutions, ED has since withdrawn the prior administration’s proposed rulemaking concerning Section 117 enforcement and disclosure requirements.

To view a list of the records and documents DFI has demanded from the Department of Education related to this matter, click here.

This Freedom of Information Act request for documents from the Department of Education marks the launch of DFI’s federal agency oversight and transparency effort. DFI is committed to robust oversight of the federal agencies responsible for education, workforce, labor, and employment policy. 

To learn more about the Defense of Freedom Institute for Policy Studies, please visit www.dfipolicy.org.