Hagerty, Cotton, Blackburn, Scott Introduce Bill to Protect American Universities from Foreign Influence

WASHINGTON—United States Senator Bill Hagerty (R-TN) has joined Tom Cotton (R-AR), along with Marsha Blackburn (R-TN) and Tim Scott (R-SC), to introduce the Foreign Funding Accountability Act, which seeks to combat malign foreign influence in American colleges and universities by strengthening Section 117 of the Higher Education Act. Full text of the bill may be found here.

“As a strategic adversary seeking to overtake the United States, the Chinese Communist Party is going to extraordinary lengths to exert malign influence over America’s free and open society, including our higher education system. By increasing transparency, closing loopholes, and imposing new civil penalties in U.S. law, this important legislation seeks to prevent the CCP and its intermediaries from hiding in the shadows to buy control and influence within our higher education, to manipulate what American students are taught about China, and to steal intellectual property from our nation’s researchers,” said Hagerty.

“The Chinese Communist Party has made consistent attempts to infiltrate American colleges and universities. Our bill will close donation loopholes, barring the CCP and other foreign agents from donating millions, or even billions, to levy influence and steal American intellectual property,” said Cotton.

“Communist China has infiltrated American colleges and universities. It is imperative we cut off Beijing’s access to funnel money in exchange for influence in higher education. Our children’s education should not be available for purchase by the CCP,” said Blackburn.

“Attempts by the Chinese Communist Party and other bad actors to infiltrate the American education system is a blatant example of foreign competitors trying to maintain and expand their global power to our detriment,” said Scott. “By holding institutions of higher education accountable for foreign donations we are taking necessary steps to promote transparency, protect our intellectual property, and ensure our country’s future leaders get a quality education.”

Specifically, this legislation would:

  • Require the disclosure of full names of foreign donating entities—individual, institutional, or otherwise
  • Require the disclosure of the specific purposes of foreign gift-transactions
  • Close the loophole allowing gifting by registered foreign agents
  • Close the loophole exempting in-kind gifts from counting towards the disclosure minimum
  • Clarify that foreign gifts to university foundations are not exempt from disclosure
  • Lower the minimum reporting threshold for disclosure in terms of dollar amount—from $250,000 to $25,000
  • Levy a graduated civil penalty structure against institutions willfully, and repeatedly violating Section 117

Background:

  • Section 117 of the Higher Education Act requires universities to report foreign gifts and contract transactions twice per year. Compliance with and enforcement of this statute has historically been underwhelming and many institutions do not properly abide by it, allowing malign foreign influence to creep into American higher education. 
  • In October 2020, the Department of Education issued a report detailing the lack of Section 117 compliance by many colleges and universities. The report describes how the Department of Education created an online reporting portal last June, that has since recorded $3.8 billion in foreign gifts and contracts.
  • Separate department investigations since June 2019 uncovered an additional $6.5 billion in unreported foreign gifts. Of the approximately 7,000 transactions recorded in the online portal, 60 institutions were classified as “new filers,” implying they hadn’t submitted any reporting data, as mandated, from 1986 until June 2020.