UNITED STATES DEPARTMENT OF EDUCATION OFFICE OF THE GENERAL COUNSEL May 19, 2020 The Honorable Devin G. Nunes Ranking Member Permanent Select Committee on Intelligence U.S. House of Representatives Washington, D.C. 20515 Dear Ranking Member Nunes: Thank you for your letter of May 4, 2020 to Secretary DeVos. She has shared your letter with me, and I am pleased to respond on her behalf. An identical response is being sent to the Ranking Members who cosigned your letter. We are grateful for your support of the U.S. Department of Education’s (Department) efforts improving transparency to reduce reliance on undisclosed foreign investment in U.S. higher education. Under Secretary DeVos’ leadership, this Department is, for the first time, faithfully enforcing the law. We have given teeth to the longstanding but generally disregarded directive in Section 117 of the Higher Education Act of 1965, 20 U.S.C. § 1011f, requiring institutions of higher education (IHE) to disclose gifts from and contracts with foreign governments, corporations, and individuals, and/or from U.S. persons acting as their agents. In light of substantial evidence, including bipartisan Senate findings, of the education industry’s disappointing and continuing disregard for its disclosure duties to the U.S. government and the American taxpayer, we are taking strong action well within the scope of our legal authority to enforce and promote compliance.
See, e.g., CHINA’S IMPACT ON THE US. EDUCATION SYSTEM
, Staff Report, Permanent Subcommittee on Investigations, United States Senate at 1, 3, 5, 71-76 (Feb. 2019) https://www.hsgac.senate.gov/imo/media/doc/PSI%20Report%20China's%20Impact%20on
%20the%20US%20Education%20System.pdf . For example, we have opened nine investigations of U.S.-based universities, each with very extensive foreign ties; triggered “catch-up” reporting of over $6.5 billion in previously unreported foreign funds primarily from Chinese and Middle Eastern sources; issued a modernized foreign money information collection following extensive public notice and comment; and provided preliminary investigative findings.
See
https://www2.ed.gov/policy/highered/leg/foreign-gifts.html. In the coming days, we anticipate releasing a report supplementing our November 27, 2019 letter to the Senate Permanent Subcommittee on Investigations; a notice of proposed rule-making under 20 U.S.C. § 1011f(g) requiring IHE submission of gift agreements and contracts to the Department so that we may verify reporting compliance; and intensified fact-finding to confirm the accuracy of submitted Section 117 reports.
The Department of Education’s mission is to promote student achievement and preparation for global competitiveness by fostering educational excellence and ensuring equal access.
The Honorable Devin G. Nunes May 19, 2020 Page 2 of 5
The Department shares Congress’ concerns regarding unreported and unregulated foreign direct investment into the U.S. higher education system, and the potential for foreign sources to use strategic investments to turn American college campuses into indoctrination platforms. Some IHE leaders are starting to acknowledge the threat of foreign academic espionage and have been working with federal law enforcement to address gaps in reporting and transparency. However, the evidence suggests massive investments of foreign money have bred dependency and distorted the decision making, mission,
and values
of too many institutions.
2
Foreign sources from China and the Middle East use gifts and contracts for propaganda activities on U.S. college and university campuses.
See e.g. CHINA’S IMPACT ON THE US. EDUCATION SYSTEM
,
supra
at 71-76; POGO,
Universities on the Foreign Payroll
3
See “Enrollment Exodus: Why So Many Chinese Students Choose That ‘Cornfield’ School In Illinois,”
https://will.illinois.edu/news/story/enrollment-exodus-why-so-many-chinese-students- choose-that-cornfield-school-in-illinois;
see also “The End of the Harvard Century,”
https://www.thecrimson.com/article/2020/4/23/harvard-china-scrutiny/. To protect IHE access to foreign money, one industry special interest group has lobbied heavily against the Department’s transparency and enforcement efforts. It rejects disclosure of “individual, corporate, or other organizational [donor] identities” due to a “chilling effect on foreign giving and the willingness of foreign entities to enter contractual agreements with colleges and universities.” It claims disclosing foreign sources to the Department would be at odds “with common practice and long-standing policy at many institutions of allowing all donors, including those living in other countries, to request confidentiality in their giving” notwithstanding existing IRS requirements; the national security dangers of anonymous foreign money; and historic evidence almost all institutions routinely reported foreign source names and address to the Department until the amount of foreign money massively increased. It admits institutions “do not ask foreign donors or entity partners to identify their country of citizenship or incorporation when they accept such gifts or enter into contracts.” It opposes requiring institutions to verify foreign money (e.g. a Confucius Center or Iranian funded Middle Eastern studies center) does not directly influence curricula. And, likely signaling a total disregard for the industry’s foreign money supply chain, it contests both enforcement of the statutory reporting requirement for gifts from and contracts with the agent of a foreign source and IHE certification to the Department of compliance with U.S. anti-terrorism, sanctions, export controls, and anti-boycott laws.
See generally
, American Council on Education,
Comment on FR Doc # 2019-19296,
The Honorable Devin G. Nunes May 19, 2020 Page 3 of 5
The Department also shares Congress’ concerns regarding the threat posed by the Chinese Communist Party (CCP) to research integrity, academic freedom, and American security. The multiple indictments of IHE professors for undisclosed financial and other ties with the government of China, the CCP, and CCP-controlled enterprises; the information disclosed in our November 27, 2019 letter to Senators Portman and Carper; the rapid development of China’s naval, sea, and air power; its efforts to rupture our long-held alliances and important trading relationships with major states in the Far East; and China’s stated desire to deny the use of the Yellow, East China, and South China Seas to American air and naval forces each provide a compelling legislative purpose and justification for Congressional inquiry. Therefore, the Department will make every effort to respond quickly and make available as much information as the law allows. Your May 4 letter requests a briefing and records production. With respect to the former, we are available essentially at your convenience. Please provide us with acceptable dates and we will have a meeting scheduled quickly. We anticipate needing approximately 45 minutes to an hour for our presentation, plus such additional time as you desire for questions and discussion. By copy of this letter, we invite Majority staff from each listed Committee to participate in this or in a separate briefing. The danger posed to our national interest by undisclosed IHE foreign funding and lax federal enforcement is thoroughly nonpartisan in nature. With respect to the latter, the Department of Justice Office of Legal Counsel has determined Ranking Members “may, like any person, request agency records. When they do, however, they are not acting pursuant to Congress’s constitutional authority to conduct oversight and investigations.”
Authority of Individual Members of Congress to Conduct Oversight of the Executive Branch
, 41 Op. O.L.C. 2-3 (May 1, 2017) available at https://www.justice.gov/olc/file/966326/download. The Executive Branch has historically exercised its discretion in determining whether and how to respond, “following a general policy of providing only documents and information that are already public or would be available to the public through the Freedom of Information Act, 5 U.S.C. § 552.”
Id.
at 3-4. Generally, this Department has treated information requests from Ranking Members with similar gravity and diligence as formal oversight requests. In this case, the Department has a strong interest in protecting the confidentiality and integrity of its investigations. Inappropriate disclosure of confidential information could lead to separation of powers concerns and will certainly impair the factfinding and enforcement work Congress has authorized us to do. Furthermore, the Department has yet to receive critical information needed to confirm the accuracy of previously submitted Section 117 reports. Certain institutions have yet to produce requested emails, metadata, and other information regarding business relationships with, and faculty funding from, Chinese, Middle Eastern, and Russian foreign sources. The Department is negotiating for this important information and hopes to have access to all relevant records (and witness interviews, if appropriate) in the near term. At the same time, the Department is evaluating its available statutory and regulatory options if negotiations and compromise fail. Finally, we are consulting with the U.S. Department of Justice and others to explore all potential pathways for full and fair disclosure of IHE foreign funding under Section 117. Also, apparently responding to media reports of your letter, IHE counsel has contacted the Department and claimed Freedom of Information Act exemptions and legal privileges to block record production to Congress. Although we are concerned there may be evidence suggesting