New Foreign Disclosure Policy in an Age of Opacity

David Acevedo

Editor's Note: This article was originally published under the name "John David," the former pseudonym of NAS Communications & Research Associate David Acevedo. To learn more about why David no longer writes under this name, click here.

CounterCurrent: Week of 11/10

The fact that foreign influence pervades higher education should come as no surprise; because colleges and universities matriculate many of tomorrow’s “movers and shakers,” it’s only natural that institutions attract significant international attention. To influence students is to shape the future of a nation. Externally-funded programs are not fundamentally malign, as they have the potential to facilitate a fruitful cultural exchange when implemented properly. However, if and when they are left unchecked, these same programs open the door for other countries to hold dangerous amounts of leverage in our domestic affairs. While the problem is certainly complex, one obvious response is to strengthen  and enforce foreign gift disclosure regulations within higher education.

As the law exists currently, colleges and universities need only to report gifts that exceed $250,000 per calendar year from a single source. Neither the name of the donor nor the purpose of the gift are required in these foreign gift reports, rendering them meaningless as a check on foreign interference. It is alarming that an institution can receive over a quarter of a million dollars per year from a foreign donor and only be required to report the amount and country of origin.

These ineffectual regulations have caused a number of negative externalities  for American higher education, particularly in the realm of academic espionage. In her report titled Outsourced to China, NAS Policy Director Rachelle Peterson exposes the malicious activity undergirding Chinese-funded Confucius Institutes, including student surveillance and historical whitewashing. The Department of Education discovered that Georgetown and Texas A&M both received gifts from Huawei and ZTE, Chinese tech firms long suspected of spying on users. It is clear that the existing law needs to be updated and expanded in order to properly monitor foreign influence in higher education.

The problem lies not only in the content of the law: enforcement of the meager regulations currently in place has been scant at best. For example, nearly 70% of colleges receiving Chinese-government funding for Confucius Institutes never reported their gifts to the Department of Education (ED). The same two universities listed above also received over $250 million undisclosed dollars from the nation of Qatar. Why? No one knows. We see that even gifts ten times the size of the established threshold can be kept secret by schools that simply neglect to report them; anyone who values national security or the financial self-reliance of higher education should find this wholly unacceptable. Once the law is changed, it needs to be enforced strictly in order for foreign giving to be truly transparent.

Despite all of these worrying findings, there has been significant pushback. Several senators have taken concrete steps to close American Confucius Institutes, including Josh Hawley (R-MO) and Ted Cruz (R-TX). The NAS has sent detailed disclosure policy recommendations to the Department of Education, which have received the attention of Secretary Betsy Devos. In this week’s featured article, the NAS comments on recently proposed changes by the ED and encourages Congress to pass the updated legislation. Most notably, the new laws would lower the disclosure threshold to $50,000 and require institutions to report the name of the donor as well as the purpose of the gift. These changes would drastically increase foreign gift transparency and thereby identify potential threats to U.S. national security within higher education, assuming the law is enforced. 

CounterCurrent is the National Association of Scholars’  weekly newsletter, written by Communications & Research Associate David Acevedo. To subscribe, update your email preferences here.

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