Today, the U.S. Department of Education’s Office of the General Counsel (OGC) opened a foreign funding investigation and sent a records request to the University of Pennsylvania (UPenn) after a review of the university’s foreign reports revealed inaccurate and incomplete disclosures. Pursuant to Section 117 of the Higher Education Act of 1965 (20 U.S.C. § 1011f), postsecondary institutions receiving federal financial assistance must disclose foreign source gifts and contracts with a value of $250,000 or more annually to the Department of Education.
“UPenn has a troubling Section 117 compliance history, having failed to disclose any foreign funding until February of 2019 despite a decades-long statutory obligation to do so. Although the previous Administration degraded the Department’s enforcement of universities’ legal obligations to disclose foreign gifts and contracts, the Trump Administration will vigorously uphold the law and ensure universities are transparent with their foreign gifts and investments,” said Acting General Counsel Tom Wheeler. “OGC will investigate this matter thoroughly, ensuring that universities cannot conceal the infiltration of our nation’s campuses by foreign governments and other foreign interests. The American people and Congress have a right to know the impact of foreign funding on our universities, including some of our critically important research universities. We hope the University of Pennsylvania will be cooperative and forthcoming in response to this investigation.”
To verify UPenn’s compliance with the law and the accuracy of its disclosures, ED requests UPenn produce records within thirty (30) calendar days including, but not limited to:
- Tax records from January 1, 2017 through the present;
- A copy and full written narrative description of the university’s written procedures and administrative systems in place to achieve compliance with Sec. 117’s foreign funding disclosure requirements from January 1, 2017 through the present;
- A copy of each written agreement with a foreign government, foreign educational institution, foreign non-governmental entity, or foreign corporate entity detailing admissions agreements for international students (undergraduate and graduate), faculty, scholars, and any research personnel from January 1, 2017 through the present;
- A copy of each written agreement with a foreign government, foreign educational institution, foreign non-governmental entity, or foreign corporate entity detailing the participation of non-U.S. individuals or entities in university or university-affiliated research collaborations from January 1, 2017 through the present;
- Identification of university personnel and contract personnel (name, title, contact information) involved in the university’s assistance and/or efforts related to F-1 Student Visa (Academic Student), work permits, and travel for international students, faculty, and other personnel from January 1, 2017 through the present;
- A full and complete identification (name, title, contact information) of all university research personnel and contract personnel, undergraduate and graduate, involved in bilateral or multilateral research collaborations with non-U.S. research institutions (including foreign government agencies, foreign educational institutions, foreign corporations, non-governmental foreign entities, and foreign individuals) from January 1, 2017 through the present;
- A complete identification of all legally affiliated university partnerships, ventures, collaborations (bilateral and/or multilateral) or other official relationships outside of the United States between the university (and/or its affiliates) and any foreign government from January 1, 2017 through the present;
- Identification of university personnel or contract personnel (name, title, contact information) responsible for the oversight and/or administration of the university’s compliance with federal Foreign Government Talent Recruitment Program restrictions and/or export and import control regulations from January 1, 2017 through the present; and
- A complete list of all foreign gifts, grants, contracts, and/or restricted or conditional gifts, grants, or contracts between the university (and any university-affiliated entity) and any foreign source (to include individuals, governments, non-governmental entities, educational institutions, or corporate entities) from January 1, 2017 through the present.
Background
Under Section 117 of the Higher Education Act (HEA) of 1965 (20 U.S.C. §1011f), U.S. colleges and universities receiving federal financial aid must disclose gifts, contracts, or restricted agreements from foreign sources valued at $250,000 or more annually. This provision, added through amendments to the HEA in 1986, ensures transparency by requiring semiannual reports to the U.S. Department of Education, submitted by January 31 and July 31. Institutions subject to the provisions — those offering bachelor’s degrees or higher, or specific transfer programs — must also report any foreign ownership or substantial control. The law is intended to protect national security and academic integrity by monitoring foreign influence in higher education. Noncompliance risks Department of Justice enforcement, including civil actions, or loss of federal funding eligibility.
The Department of Education recently initiated a Section 117 records request of Harvard University and issued a notice of investigation and a records request to University of California, Berkeley after reviews of both universities’ foreign reports revealed inaccurate and incomplete disclosures.