US investigates Harvard, Yale for failure to report foreign gifts

The United States Department of Education has opened an investigation into whether the universities of Harvard and Yale failed to report hundreds of millions of dollars in foreign gifts and contracts as required by law.

Yale University in New Haven, Connecticut, may not have reported at least $375m in foreign money over the last four years, the department said in a statement on Wednesday.

“This is about transparency,” US Secretary of Education Betsy DeVos said in the statement. “If colleges and universities are accepting foreign money and gifts, their students, donors, and taxpayers deserve to know how much and from whom.”

“Unfortunately, the more we dig, the more we find that too many are under-reporting or not reporting at all,” she added.

Federal law requires most colleges and universities to report gifts from and contracts with foreign sources that are worth more than $250,000 twice a year.

Education department records over the last 30 years show US universities and colleges have reported more than $6.6bn in donations from Qatar, China, Saudi Arabia and the United Arab Emirates.

“This sum may be significantly underestimated,” the education department said.

Yale received a request from the department on Tuesday for records of certain gifts and contracts from foreign sources under Section 117 of the Higher Education Act of 1965, university spokeswoman Karen Peart told the Reuters news agency.

“We are reviewing the request and preparing to respond to it,” she said.

The education department said it is also concerned that Harvard University in Cambridge, Massachusetts, lacked the proper controls over foreign money and may have not fully reported all donations and contracts coming from outside the US.

Harvard told the Bloomberg news agency that it was also reviewing the department’s request and preparing a response.

In a letter to Harvard on Tuesday, the education department told the university it was opening an administrative investigation because it was “aware of information” suggesting the university “lacks appropriate institutional controls.” As a result, its reporting may not include the entirety of gifts or contracts with foreign sources.

The department requested records of gifts from foreign sources, including from the People’s Republic of China, Huawei Technologies, ZTE Corp, Kaspersky Lab, the governments of Russia, Iran, Saudi Arabia, and Qatar, as well as other entities connected to those governments.

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

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.

Two weeks ago, Charles Lieber, the chair of Harvard University’s Department of Chemistry and Chemical Biology and two Chinese nationals who were researchers at Boston University and a Boston hospital, were charged by the US Justice Department with lying about their alleged links to the Chinese government.

Lieber said that Harvard lacked adequate institutional controls for effective oversight and tracking of very large donations, according to the education department.

In a report about China’s influence on US education, a Senate committee on investigations described foreign spending on US schools as “a black hole” because colleges and universities routinely fail to comply with the law.