U.S. Universities Received Billions in Unreported Foreign Funds, Education Department Finds, Warning of ‘National Security Risk’

The Department of Education on Tuesday warned that funding from foreign adversaries at U.S. universities could pose a risk to national security in a report detailing its year-long investigation that found a number of universities had not appropriately reported funding received from entities in China, Qatar, and Russia.

Betsy DeVos wearing a blue shirt: U.S. Education Secretary Betsy Devos speaks in the Rose Garden at the White House in Washington, D.C., July 9, 2020.

© Kevin Lamarque/Reuters
U.S. Education Secretary Betsy Devos speaks in the Rose Garden at the White House in Washington, D.C., July 9, 2020.

The department found that “many large and well-resourced institutions of higher education have aggressively pursued and accepted foreign money,” while failing to properly report the funding.

“The Department’s investigations highlight the fact that foreign adversaries are likely targeting specific institutions for their R&D and technologies. This information highlights the critical national and economic security risks created by institutions’ failure to be fully transparent with respect to foreign gifts and contracts,” the 34-page report warned. 

The agency says foreign state and non-state actors have, for decades, “devoted significant resources to influence or control teaching and research, to the theft of intellectual property or even espionage, and to the use of American campuses as centers for propaganda operations and other projections of soft power.”

The report details the investigation the department began last year into whether U.S. universities are appropriately reporting foreign contracts and gifts that total more than $250,000 in one year. While it isn’t illegal to receive foreign funds, the universities must disclose the funding under Section 117 of the Higher Education Act of 1965 on foreign funding, which the department has worked to enforce with renewed vigor under the leadership of Secretary Betsy DeVos.

The report found that a university, which the Wall Street Journal has identified as Cornell University, had failed to report more than $1.2 billion in foreign funds to U.S. authorities in recent years. The university had not reported $760 million related to its campus in Qatar or roughly $1 million in contracts from Huawei Technologies, the “heavily state-influenced” Chinese technology firm.

Several schools initially failed to report receiving millions of dollars from Huawei, which the report says “became a household name not only because of its products’ international presence but because of these products’ potential enablement of foreign espionage.” The agency detailed how the Chinese Communist Party uses the firm to exert influence, including via a CCP committee baked into its corporate structure and $75 billion in support from the Chinese government. 

Huawei funded a number of initiatives in competitive industries such as robotics, semiconductors and online cloud services, the report said. Though most American universities stopped accepting funds from Huawei in 2018 based on U.S. officials’ concerns that the firm posed a national security risk, several schools were already locked into contracts with the company.

A school, which the Journal identified as MIT, has had roughly $11 million in contracts and agreements with Huawei since 2013, according to the report, funding an array of initiatives from research agreements to donations for specific projects and programs. 

The report said another school, which the

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