Colleges Lobby Biden to Halt Federal Probe Into Foreign Donations

Education Dept. investigation has already found $6.5 billion in unreported gifts

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January 19, 2021

Top universities are already lobbying the incoming Biden administration to reverse a Trump-administration policy that required colleges to fully disclose foreign donations and halt investigations into alleged violations.

The American Council on Education (ACE), a lobbying group led by former Obama-administration official Ted Mitchell, is asking President-elect Joe Biden to "halt expanded reporting requirements" for contracts and foreign donations to universities. ACE represents nearly all of the major universities in the country, including top Democratic donors such as Harvard University, Stanford University, and the University of California system. The council called for federal regulators to abandon ongoing investigations into university coffers despite revelations that top universities hid billions of dollars in donations from foreign powers.

"The Department’s response to instances of insufficient institutional reporting should have focused on reporting remediation to enhance the intended transparency rather than launching investigations," the group said in a Nov. 18 letter to Biden.

The Education Department's push to shed light on university ties to foreign donors is one of the major achievements of the Trump administration, one which has irritated top colleges, which receive the lion's share of foreign gifts. In the last four years, the department launched several probes into Harvard, MIT, Georgetown, and other top schools, uncovering more than $6.5 billion in unreported foreign gifts. 

Reed Rubinstein, a senior Education Department official who spearheaded the push for greater disclosure, said that universities are "not fans of what we've done" and have deployed considerable political capital to resist the oversight effort. 

"I mean honestly, the industry's reaction is just so distressing," Rubinstein told the Washington Free Beacon. "From the university associations, the business mouthpieces, the opposition has been intense. They have vigorously lobbied Congress and the executive branch to try and shut down our efforts."

The probe helped uncover millions of dollars in university donations from unsavory sources such as Huawei, a Chinese tech giant widely considered a national security threat. The department has also made publicly available all reported foreign donations to U.S. universities, allowing for public scrutiny. The Washington Free Beacon used the public dataset to uncover that the Chinese military-industrial complex has funneled $88 million to U.S. universities.

The oversight effort, however, was not welcomed by universities. Nearly 50 other higher-education special interest groups signed onto the ACE letter, making it an impressive show of force by the nation's top universities, which represent a major constituent group for the Democratic Party.

American universities are one of the most partisan donor groups in the country. The education industry spent about $312 million on the 2020 elections, with 90 percent of money going to Democrats, according to the Center for Responsive Politics. The lop-sided donations make universities more partisan than other core Democratic constituents such as public sector unions. 

Individual colleges have also lobbied against legislation that would force greater transparency in university financing. Yale University spent $110,000 in the third quarter of 2020 in lobbying in part to oppose the America FIRST Act, which would require colleges to "disclose gifts from foreign sources in the publications of certain professors and affiliates."

As education groups redouble their outreach campaign, the Department of Education has sent out a flurry of new regulatory proposals, letters to congressional allies, and investigative inquiries into universities to cement its legacy in the last days of the Trump administration. The new regulatory proposals would require American universities to disclose the original contracts that they signed with foreign donors to the Department of Education, while the letters to Congress told legislators there is still much work to be done.

Rubinstein said higher education groups will have a difficult time undoing the Trump administration's transparency efforts in the face of both Democrats and Republicans who increasingly see foreign donations as a threat to academic freedom and national security. 

"A lot of that work is being done at the career level, not the political level. So presumably, it would be extremely difficult for any administration now to come in and try to make all of that cease, even if they wanted to," Rubinstein said. "But I don't know what the Biden folks will do."

The Biden transition team did not respond to a request for comment.