Asleep at the Wheel? ‘Little Evidence’ Biden is Requiring Colleges to Report Foreign Cash, Betsy DeVos Says

By Published on February 6, 2023

Former Secretary of Education Betsy DeVos says “there’s little evidence to suggest” the Biden administration and the Education Department are enforcing the law on foreign funding for colleges and universities.

“The colleges complained vociferously when we asked them to simply do what they were supposed to do under the law and report their funding,” DeVos told The Daily Signal in a phone interview. “But I think the Biden administration has, it appears, they just acquiesced to their requests to keep the money hidden.”

Section 117 of the Higher Education Act of 1965 requires colleges and universities to report “contracts with and gifts from a foreign source that, alone or combined, are valued at $250,000 or more in a calendar year,” according to the Education Department website.

“Well, we actually launched 12 investigations while I was in office because we quickly realized that very few schools were complying with the law that was on the books, requiring them to regularly report significant contributions or investments ‘from foreign entities or individuals,’” DeVos said about her experience as education secretary and how she ensured the enforcement of Section 117.

“So, we launched 12 investigations focusing on schools with [Department of Defense] research labs, and what we found with just checking a few of these schools or challenging them to do their reporting [was] more than $6.5 billion in previously unreported foreign money from just this handful of schools,” DeVos explained. “Almost all of that money was from our geopolitical adversaries, primarily in the Middle East, Russia, and China.”

The Department of Education last sent a notice of investigation and records request on Jan. 15, 2021, according to the department’s website.

The Daily Signal contacted the White House asking if it has been enforcing Section 117 and if not, why not. The Daily Signal also asked if the list reflecting the notices of investigations and record requests has not been updated if the law is still being enforced.

“I think we know that there continues to be billions and billions of dollars that are going into these research universities, and at the Biden Center at the University of Pennsylvania, more than $50 million in Chinese funding came into that institution in a very short period of time,” DeVos said.

She noted that former Vice President Joe Biden kept many records at the Penn Biden Center, which gained renewed scrutiny following news of the discovery of classified documents there in Biden’s office last November.

“In fact, it was generally while we were in office, and as has been pointed out in other places, this is where all of his foreign policy staff was housed in waiting for his administration. It raises a lot of questions,” she said.

DeVos added:

I think that this is not something we can just sort of look the other way and say it’s an innocuous situation. These are very important research institutions that have a lot of American IP and lots of secretive things that should not be in the hands of others.

And so, the way that colleges and universities have continued to simply act as though this is a nothing, it’s just simply wrong.

Rep. Jim Banks, R-Ind., said President Joe Biden is “undoing President [Donald] Trump’s efforts to hold the Communist Party accountable.”

“Joe Biden didn’t just fail to crack down on illicit Chinese influence at our universities, he’s undoing President Trump’s efforts to hold the Communist Party accountable,” Banks told The Daily Signal in an email.

“The Penn Biden Center has drawn $14 million in anonymous Chinese donations since Biden took office. If the White House actually enforced prohibitions on malign Chinese influence, they’d end up investigating the president of the United States,” Banks added.

Rep. Virginia Foxx, R-N.C., chairwoman of the House Education and the Workforce Committee, also weighed in on the Biden administration’s enforcement of Section 117.

“For years, Republicans have sounded alarms about the seriousness of foreign interference on college campuses, but Democrats and the Biden administration continue to ignore them. The administration sees concerned parents as more of a threat than the [Chinese Communist Party’s] influence on colleges and universities,” Foxx told The Daily Signal in an emailed statement.

“Sunshine is the best disinfectant; if we want to keep schools free of foreign interference, we must know the extent of foreign powers’ entanglement,” Foxx also said.

A committee spokesman told The Daily Signal:

Currently, no indications exist that the administration intends to end enforcement of Section 117 of the Higher Education Act of 1965 (HEA). However, the administration terminated open inquiries—including those opened by the Trump administration—investigating the extent of foreign funding pouring into America’s colleges and universities.

The Education Department appears to be returning to Obama-era levels of enforcement of Section 117 of the HEA. Ultimately, this administration’s terminations of these inquiries, and failure to open new ones, indicates the administration’s staggering lack of concern of foreign influence seeping into our postsecondary education system.

Jonathan Butcher, a Will Skillman Fellow in Education in the Center for Education Policy at The Heritage Foundation, raised concerns about the risks associated with not enforcing Section 117. (The Daily Signal is the news outlet of The Heritage Foundation.)

“There are huge risks here because we cannot know the extent to which these foreign sources are trying to affect university operations or alter campus life,” Butcher told The Daily Signal in an email.

Michael Cunningham, a research fellow in the Asian Studies Center at The Heritage Foundation, added that “under-reporting of foreign donations is a long-standing problem. The Trump administration’s Department of Education launched what was probably the biggest push ever to enforce Section 117, but those efforts stopped when Biden took office.”

Cunningham continued:

Universities reported $1.6 billion in foreign donations in the final half year of Trump’s presidency. In the entire first year of Biden’s presidency, the number dropped to just $4.3 million.

That’s not because universities suddenly stopped accepting funding from foreign sources. They simply stopped reporting it and the administration seems not to care.

Neetu Arnold, a higher education researcher for the National Association of Scholars, said that “the Biden administration is relaxing disclosure requirements,” and warned of the potential risks associated with not enforcing or relaxing Section 117 requirements.

“The public is not aware of the foreign entities vying for influence at universities. This is especially a concern for countries we consider as adversaries, such as China, Qatar, etc.,” Arnold told The Daily Signal in an emailed statement.

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“We become more unaware of the foreign actors spying or taking sensitive information. We also don’t know how American resources are used to help countries we consider our enemies,” Arnold said.

Arnold also noted that “the Biden administration released an updated guidance on Section 117 on June 23, 2022,” and that it was the “first announcement” she had seen from the Biden administration associated with the foreign funding disclosure.

“I’m not sure exactly what prompted the clarifications. The American Council on Education had tried to work with the Biden administration on Section 117 regulations since at least spring of 2022 (though it doesn’t appear that went anywhere),” Arnold said. “It is also a coincidence that the [Education Department] issued Section 117 clarifications just a week after I wrote about how Texas A&M failed to report $100 million in foreign funds.”

“Some of the [Education Department’s] clarifications relax the disclosure rules for universities,” Arnold said, specifically noting the “rebuttable presumption.”

An Education Department PowerPoint presentation from June 23, 2022, says, “Where a legal entity (e.g., a foundation) operates substantially for the benefit or under the auspices of an institution, there is a rebuttable presumption that when that legal entity receives money or enters into a contract with a foreign source, it is for the benefit of the institution, and, thus, must be disclosed by the institution.”

The White House and the Education Department did not respond to The Daily Signal’s requests for comment.


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