Education

Universities fight scrutiny of foreign funding in Senate China bill

Under the initial bipartisan proposals, universities would face national security reviews of some of their foreign transactions.

Senate Majority Leader Chuck Schumer talks to reporters after a weekly Democratic strategy session, on Capitol Hill in Washington, Tuesday, April 27, 2021.

Colleges and universities are rushing to fend off a new round of federal scrutiny of their foreign dealings as the Senate negotiates last-minute changes to bipartisan legislation aimed at countering China’s economic influence and power.

Higher education groups have cheered on the massive boost to science and technology research in the bill, which is a top priority for Senate Majority Leader Chuck Schumer that he was pushing to finish this week. But universities are fighting a range of provisions that would impose new federal controls on foreign donations to U.S. campuses and contracts that schools have with partner institutions or other entities abroad.

Democrats and Republicans on Thursday were also still negotiating changes over how to structure a key portion of how the U.S. government would set up new mechanisms to monitor foreign donations, particularly from China, to American campuses.

Under the initial bipartisan proposals, universities would face national security reviews of some of their foreign transactions and they would have to publicly disclose more about the funding they receive from abroad. Some research universities also would be required to create a database of the foreign gifts and contracts that individual faculty and staff receive.

Proponents of the increased scrutiny say the measures are needed to prevent the Chinese government from exploiting American universities and stealing or monitoring U.S. research or technology. But universities argue that the measures would be burdensome, ineffective and inhibit collaboration with international partners.

“We are doing everything we can to work with Sen. Schumer and work with other offices to ameliorate our concerns,” said Debbie Altenburg, associate vice president for research policy and government affairs at the Association of Public and Land-grant Universities. A major concern of university leaders, she said, is that the combination of the restrictions “would discourage any international partnerships, not just those from China.”

“We want to be sure that, in the Senate’s zeal to address competition from China, we don’t have the unintended consequences of all of these provisions,” Altenburg added.

University trade associations are lobbying to remove or scale back those requirements as Democrats and Republicans negotiate changes and how to move forward on the bill, the U.S. Innovation and Competition Act, S. 1260 (117).

Republicans and Democrats reached a deal on Thursday to advance the overhaul legislation, clearing the path for a final vote later in the day. Schumer said earlier on the floor that the Senate had “a few final amendments to consider.”

It wasn’t clear whether Democratic leaders planned to allow amendments that change the university research provisions or alter them through a manager’s amendment.

One of the most contentious proposals would give federal officials new authority to examine foreign gifts and contracts to U.S. universities valued at more than $1 million and that relate to the development of “critical technologies.” It would empower the Committee on Foreign Investment in the United States or CFIUS — a multi-agency group that reviews foreign investments for possible national security concerns — to vet foreign donations to U.S. universities. Under the bill, the secretary of education would be added to the committee, which is led by the Treasury secretary, to review those transactions involving universities.

But the expansion of CFIUS has been a sticking point in negotiations over the legislation.

The American Council on Education, the umbrella group representing colleges, circulated talking points earlier this week that said the proposed change would create massive compliance costs for colleges and delay research projects. The group also criticized the plan as an unprecedented government intrusion into university research, warning that it could “lead to research projects being denied funding for political reasons, not on their scientific merit.”

Sen. Jim Risch, the top Republican on the Senate Foreign Affairs Committee, is a key supporter of expanding national security reviews of foreign investments to include gifts to universities. Risch, of Idaho, said last month that “confronting the Chinese Communist Party’s political influence across our higher education institutions” was a “top priority” for him, as the language was approved in committee on a nearly unanimous vote.

But Schumer’s sweeping proposal, which pulled together various bills related to outcompeting China, also included competing language from the Senate Banking Committee that would block the national security review of foreign gifts to universities.

But Sen. Sherrod Brown (D-Ohio), the chair of the Senate Banking Committee, which oversees CFIUS, has opposed expanding that review process to cover university gifts and fought to remove it from the legislation. A competing provision that the committee added to the bill would have blocked CFIUS from conducting the reviews and Brown has proposed an amendment to strike it entirely.

On Wednesday, Risch led a bipartisan group of Senators to roll out a compromise proposal.

The amendment by Risch and Sen. Bob Menendez (D-N.J.), the chair of the Foreign Affairs Committee, as well as Sens. Ben Cardin (D-Md.) and Marco Rubio (R-Fla.) would narrow the CFIUS national security reviews to cover only gifts or contracts to universities from the Chinese government, Chinese nationals or entities organized under Chinese law.

Brown introduced another amendment on Wednesday that also calls for focusing only on large donations and contracts that come from China — but it would monitor those transactions outside of the CFIUS national security review process. The amendment would require the Biden administration in 90 days to come up with its own “process for the screening of gifts and contracts” from Chinese entities to U.S. universities.

It’s not yet clear how the Senate will resolve those competing proposals.

Another provision drawing the ire of colleges and universities would lower the existing threshold for when they must report foreign funding to the Education Department.

China is among the biggest foreign contributors to U.S. campuses who reported receiving more than $400 million over the last two years, according to Education Department data.

The proposal comes from a years-long bipartisan push by Sens. Rob Portman (R-Ohio) and Tom Carper (D-Del.) to crack down on foreign funding flowing into university research institutions. It would require universities to report gifts or contracts valued above $50,000 down from the current $250,000 threshold.

In addition, under the bill, large research universities would have to create databases to track foreign gifts and contracts that go to certain faculty and staff on their campus.

Universities argue that those expanded requirements would create overly burdensome reporting obligations. They also say the new requirement to track gifts to individual researchers is so broad it would require reporting of a lunch paid for by a foreign colleague.

The Justice Department during the Trump administration charged several university professors over allegations that they concealed their ties to China. Most prominently, the former Harvard University chemistry department chair was arrested last January on charges he lied about his involvement with China’s Thousand Talents Program, which aims to lure academic talent to China from other countries.

The Trump administration stepped up enforcement of the Cold War-era requirement for colleges to disclose their foreign funding each year to the department. Former Education Secretary Betsy DeVos released a report last year accusing higher education of “pervasive” under-reporting of foreign gifts. And the Trump administration opened more than a dozen investigations into universities over their disclosure of foreign funding.

Language negotiated by the leaders of the Senate education committee, Sens. Patty Murray (D-Wash.) and Richard Burr (R-N.C.), would require the Education Department to conduct negotiated-rulemaking sessions on the new disclosure mandates and provide technical assistance to help colleges comply with them. Their language also clarifies definitions of what counts as a gift and when universities must turn over copies of their foreign contracts to the Education Department, issues that were a major point of contention between universities and the Trump administration.

Universities are also concerned about Republican proposals that would go even further in expanding federal supervision of science and technology research.

Rubio and other GOP lawmakers have filed an amendment that would set up a new federal counterintelligence screening process for researchers who receive grants from federal science agencies like the National Science Foundation and NASA.

The American Council on Education said in a letter earlier this week it “strongly opposed” the amendment, arguing that it would be overly burdensome and unnecessary for national security officials at three agencies to review individual researchers. The new requirements in the amendment, the group wrote in a letter to Congressional leaders, would “paralyze our research and innovation capacity, grinding it to a halt, for no apparent return on improved security.”

The Senate is expected to vote on the Rubio amendment later on Thursday.

Rubio said in a tweet on Thursday that he would not vote to move ahead on the bill until it has “safeguards to prevent billions of dollars of research being stolen.”