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U.S. investigates Harvard, Yale for failure to report foreign gifts

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Deanna Wagner | 14 February, 2020, 17:57

The probe of Yale and Harvard is part of a larger examination by the DOE, which says its enforcement efforts, since July, have triggered the reporting of approximately $6.5 billion in previously undisclosed foreign money, much of it from China, Saudi Arabia, Qatar and the United Arab Emirates, according to the department.

The federal agency claimed Yale failed to report at least $375 million in foreign transactions and hasn't reported any gifts or contracts for the last four years.

The education department has said that these investigations are about transparency and have already unearthed problems.

Section 117 of the Higher Education Act requires American Title IV-eligible colleges and universities to report any foreign gifts or contracts that exceed $250,000 in value. The contributions to Yale reportedly came from nations such as Saudi Arabia, China, and Qatar.

The Education Department opened investigations into Harvard and Yale as part of a continuing review that it says has found US universities failed to report at least $6.5 billion in foreign funding from countries such as China and Saudi Arabia, according to department materials viewed by The Wall Street Journal.

Last month, a Harvard chemistry professor was accused of lying about his connections to China and concealing payments to him from a Chinese university.

Harvard and Yale told the BBC they were preparing responses for the government.

According to student newspaper Yale Daily News, the Department has sent a letter to Yale's resident Peter Salovey on February 11, demanding that the school submit records on contributions from foreign governments between 2014 and 2017.

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It also requested documents related to China's Thousand Talents Plan.

The department described higher-education institutions in the US, in a document viewed by the Journal, as "multi-billion dollar, multi-national enterprises using opaque foundations, foreign campuses, and other sophisticated legal structures to generate revenue".

The department also expressed concern to Portman that some foreign governments and corporations may be establishing financial ties with U.S. universities in an effort to "project 'soft power, ' steal sensitive and proprietary research and development data and other intellectual property, and spread propaganda".

A Harvard spokesman, Jonathan Swain, said it is reviewing the notice and preparing a response.

The agency sent a similar letter to Yale, saying the university appeared to fail to report a single gift or contract from 2014 through 2017 and asked for records related to all its foreign sites and gifts from countries including Saudi Arabia, China and others. As a result, its reporting may not include the entirety of gifts or contracts with foreign sources.

"If colleges and universities are accepting foreign money and gifts, their students, donors, and taxpayers deserve to know how much and from whom", she said in the statement. It said $3.6 billion of that was reported by 10 schools: Cornell University, Yale, the University of Colorado Boulder, the University of Texas MD Anderson Cancer Center, the Massachusetts Institute of Technology, the University of Chicago, the University of Pennsylvania, Boston University, Texas A&M, and Carnegie Mellon University.

Portman and Senator Thomas Carper, the ranking Democrat on the subcommittee, praised the crackdown on disclosure lapses.