The National Association of Scholars applauds the Foreign Funding Accountability Act, introduced by Senator Tom Cotton (R-AR). We urge the U.S. Senate to pass this important bill.
The Foreign Funding Accountability Act (FFAA) addresses the problem of undisclosed foreign funding flowing into our colleges and universities, money that frequently comes with strings attached. We are pleased that the FFAA includes key reforms that the National Association of Scholars has put forward. We have warned for years that foreign powers have purchased influence over American higher education. Last October, the Department of Education issued a report detailing widespread noncompliance with existing federal disclosure law found in Section 117 of the Higher Education Act.
This bill would update Section 117 of the Higher Education Act with five key reforms. First, it requires the identity of all foreign donors. Currently, colleges disclose the name of the donor only if it is a foreign government, incentivizing foreign governments to direct their gifts through private individuals, foundations, and shell organizations in order to maintain anonymity. The FFAA would ensure that the public knows the source of foreign gifts.
Second, the FFAA lowers the disclosure threshold from $250,000 to $25,000, a long-overdue measure that recognizes the power five-figure sums can wield.
Third, the bill requires colleges to disclose the purpose of any foreign transaction, including the terms of the gift and a copy of any signed agreements. Importantly, all of these documents would become public records, which the Department of Education would provide to the public electronically.
Fourth, the bill closes various loopholes, ending the exemption for gifts made by registered foreign agents, ensuring that in-kind donations are included, and specifying that gifts made to university foundations or other such entities are subject to disclosure as well.
Fifth, the FFAA institutes penalties for noncompliance, authorizing the Secretary of Education to impose a fine, ranging from a maximum of $250,000 or the value of the nonreported gift for a first violation, up to $1 million or the value of the nonreported gift for a third violation. The Secretary is also authorized to deny any institution eligibility for federal funds.
The widespread lack of transparency surrounding foreign gifts has attracted national attention for years. Under the Trump Administration, Education Secretary Betsy DeVos instituted key reforms, but many of the most pressing issues cannot be addressed by regulatory guidance. The nation is dependent on Congress to enact new legislation.
The Foreign Funding Accountability Act is the strongest bill yet regarding Section 117. The National Association of Scholars strongly supports this bill and urges Congress to pass it.