NAS Statement on Louisiana’s Foreign Funding Transparency Bill

National Association of Scholars

The National Association of Scholars congratulates the state of Louisiana for passing a robust foreign funding disclosure requirement for its higher education institutions. The “Higher Education Foreign Security Act of 2022” employs several key pro-transparency provisions that we have advocated for throughout our investigations of Confucius Institutes, Qatar branch campuses, and Middle East Studies Centers.

The bill requires Louisiana public and private universities to report all foreign donations of at least $50,000 per fiscal year. This is a significant improvement from what the federal government currently requires, which sets a much higher threshold of $250,000 per year for disclosure. Louisiana’s threshold ensures that smaller foreign gifts, which can be used to support endowed professorships, lectures, and fancy dinners for administrators, do not slide under the radar.

The law also subjects university-affiliated organizations to disclosure requirements. The bill clearly defines an “affiliate organization” as “any entity under the control of or established for the benefit of an organization.” This is crucial, as foreign funds often go unreported because they pass through a university’s foundation. Public universities claim that their foundations are not subject to public scrutiny, including open records requests, because they are legally separate entities from the university. Higher education administrators at Texas A&M used a similar justification for $100 million in unreported Qatari and Russian funds that passed through its engineering research arm. Louisiana’s clear definition of an affiliate organization closes these loopholes for universities.

The internal auditor for the Louisiana Board of Regents will ensure university compliance by inspecting or taking a random sample of the total number of foreign donations received from any university in the state. Universities that fail to follow the law could be fined up to 105% of the amount of the undisclosed donation. Such a penalty will motivate universities to take foreign disclosure more seriously, as has already been the case for many Pennsylvania universities. Most existing regulations, such as Section 117 of the Higher Education Act, lack sufficient penalties for noncompliance.

We urge lawmakers in other states to follow Louisiana’s example. The federal disclosure requirements are far too lax and lack sufficient penalties for violations. States should also consider adopting policies that reduce appropriations for public universities that rely heavily on foreign funds from adversarial countries such as China and Qatar. State governments can and should step in to fill this gap and restore accountability and transparency to the American higher education system.

Image: Wikimedia Commons, Public Domain

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