Universities on the Foreign Payroll

After the Central Intelligence Agency found that the crown prince of the Kingdom of Saudi Arabia likely ordered the murder of Saudi journalist Jamal Khashoggi in 2018, the Massachusetts Institute of Technology (MIT) announced it would be reviewing its “Institute-level engagements” with the Kingdom. The fallout from the murder of Khashoggi has put a spotlight on Saudi Arabia’s extensive financial connections to universities across the United States.

A Project On Government Oversight review of federal records found that universities in the United States reported receiving over $600 million from various Saudi companies, individuals, and the government itself between 2011 and 2017. In 2017 alone, Saudi individuals, companies, and the Kingdom itself spent over $89 million on gifts and contracts with higher-education institutions like Columbia University, Tufts University, and the University of Southern California, with each school receiving at least $1 million. George Washington University reported receiving over $12 million in 2017 alone through two contracts with the Saudi Arabian government.

Yet MIT has been the most vocal about reviewing its financial relationship with the country. MIT reported receiving almost $78 million in revenue between 2011 and 2017 from Saudi Arabian sources. However, the vast majority of that money, approximately $73 million, was from private donations from a single Saudi businessman and MIT alumnus, Mohammed Abdul Latif Jameel. The remainder of the money came from the Saudi government-owned oil company, Aramco.

Still, members of the MIT community raised concerns that the Saudi government’s implication in the murder of Khashoggi, involvement in the Yemeni civil war, and generally repressive policies did not align with the university’s values. “Some members of our community argue that MIT’s continuing association with KACST [King Abdulaziz City for Science and Technology], Aramco, and SABIC [a Saudi manufacturing company], is an implicit endorsement of Saudi government actions that have generated widespread revulsion around the world,” MIT Professor and Associate Provost for International Activities Richard Lester wrote in a December 2018 report.

Lester’s report stated that, “over the last three years, sponsored research projects funded by Saudi organizations accounted for 52% of all Saudi-funded expenditures at MIT.” Yet most of the research sponsors listed in the report are not included as sources of monetary gifts or contracts in the federal data reviewed by POGO. Lester’s review only covered MIT’s 2016-2018 contracts, but in fact MIT did not report any contracts with foreign sources at all between 2011 and 2018, according to the most recently available data, leading to questions about if and how MIT discloses these kinds of financial relationships.

Ultimately, Lester’s review did not find a “compelling case for withdrawing from these relationships.” Lester’s report detailed the numerous scientific and engineering research projects the Kingdom supports, as well as the resources devoted to supporting the continued education of Saudi students, particularly female scientists. Just this month, The Boston Globe reported that MIT would not be severing its financial or research connections with Saudi Arabia.

“I hope we can respond to present circumstances in a way that does not suddenly reject, abandon or isolate worthy Saudi people who share our principles and are doing good work,” MIT President L. Rafael Reif wrote when announcing the decision.

If the dozens of other universities that also have lucrative partnerships with Saudi Arabia reviewed their relationships, they were far less transparent about it.

Saudi Arabia is hardly the only source of foreign money in higher education. Many of the top colleges and universities in America have multimillion-dollar relationships with countries all over the world. Some of the most lucrative partnerships are with autocratic regimes or countries with troubling human rights records.

Under the Higher Education Act, colleges and universities are required to report to the federal government any gifts from or contracts with a foreign source valued at $250,000 or more in a year. The publicly available data only covers seven years. Between 2011 and 2017, U.S. universities and colleges reported receiving over $7.7 billion from 133 foreign countries and territories. The financial data collected under the Higher Education Act is self-reported and POGO has not seen any evidence that the numbers are audited for accuracy by an independent body like the Department of Education Inspector General or the Government Accountability Office.

A Department of Education spokesperson told POGO that compliance with this requirement is mandated as part of any university’s agreement to participate in the federal student-aid program. If a higher-education institution fails to comply, the Department may request that a federal district court judge intervene and can require the university or college to reimburse the government for any cost associated with the enforcement action.

These financial relationships raise questions about whether foreign-influence laws are strong enough. While such financial gifts and contracts should not be illegal, disclosure laws should be robust enough to ensure meaningful transparency. It’s an age-old truth that money can buy access and even influence, which is why the accurate reporting of such high-dollar donations is so important.

Major Recipients of Defense Contracts Among Top Recipients of Foreign Funds

The largest foreign funder by far is Qatar, the only country to give over $1 billion in the seven years covered by the Higher Education Act data. Saudi Arabia and China are among the top ten contributors, each donating around half a billion to various U.S. universities in the same period; U.S. allies such as England, Canada, and France were other top contributors.

Over 150 U.S. colleges and universities reported receiving foreign gifts of over $250,000 in the covered period. Harvard University received by far the most foreign money in the period, reporting just over $1 billion from over 60 countries. In addition to Harvard, MIT, Johns Hopkins University, Georgetown University, and Northwestern University are among the schools that reported receiving the most foreign gifts, each totaling over $300 million.

Some of these schools also receive billions of dollars in U.S. government grants and contracts. MIT, for instance, received over $1 billion from the U.S. government in 2017, and the Department of Defense had previously awarded the school a $3 billion “indefinite-delivery/indefinite-quantity” contract to support U.S. national security efforts through the MIT-run Lincoln Laboratory. According to the Federal Procurement Data System, MIT was one of the top ten earners of contracts from the Air Force in 2017, just behind the likes of Boeing, Lockheed Martin, and Northrop Grumman.

Similarly, Johns Hopkins University received over half a billion dollars in Navy contracts and just over $1 billion in total from the U.S. government in 2017, according to the Federal Procurement Data System. One contract, for engineering and research support for the Air Force Nuclear Weapons Center, was valued at $93 million. Such huge and high-profile contacts with the Defense Department raise questions, considering that these schools also receive millions from their partnerships with foreign governments and nationals. For instance, between 2011 and 2017, Johns Hopkins received over $40 million from Saudi Arabia, $29 million from Japan, and $16 million from India.

A possible concern is that some wealthy foreign governments or individuals may be using their connections to these universities to access the technologies developed for U.S. national security programs. In 2014, the FBI issued a notice to research facilities, including colleges and universities, warning them that Russian venture capitalists in particular may be using their contributions to attempt to buy access to emerging U.S. technologies. “The FBI believes the true motives of the Russian partners, who are often funded by their government, is to gain access to classified, sensitive and emerging technology from the companies,” according to an FBI op-ed published in the Boston Business Journal.

The FBI op-ed specifically called out the Skolkovo Foundation as a Russian government pass-through. A nonprofit organization, the Skolkovo Foundation says its aim is to encourage Russian entrepreneurship and innovation in areas like energy efficiency, nuclear technologies, and biomedicine. The FBI warned that intelligence indicated the Foundation was being used as a way to access sensitive U.S. research and development programs as part of an initiative to modernize Russia’s economy and military. The president of the Foundation is Viktor Vekselberg, a Russian billionaire and oligarch. Vekselberg joined the MIT Corporation board of trustees in 2013.

Despite the warning from the FBI, the university continued its partnership with Vekselberg until just last year. It was not until after the Treasury Department formally imposed sanctionson him and his business in April 2018 that MIT “suspended” Vekselberg’s membership on the board of trustees, a university spokesperson told Radio Free Europe. However, the university continued to collaborate with the Skolkovo Foundation as of 2018.

MIT did not respond to POGO’s request for comment.

Academic Partnerships or Public Relations?

Some financial relationships with foreign powers don’t come with national security concerns, but can still lead to questions about potential conflicts of interest. Many universities enter into partnerships with foreign-government-controlled entities, which can end up being an exercise in soft power for both countries. While American universities can be seen as bringing a liberal education and academic freedoms to an otherwise conservative country, the partnerships can also raise conflict-of-interest concerns when U.S. policy gets involved.

Take, for instance, Qatar’s multimillion-dollar partnership with Georgetown University. Georgetown University Qatar was established in 2005 as part of Georgetown’s School of Foreign Service; it is largely financially supported by the Qatar Foundation, a private nonprofit founded by the Qatari royal family. Between 2011 and 2017, Georgetown received about $330 million from the Foundation.

Policy experts, and even former Georgetown University Qatar professors, have raised concerns about the partnership. Qatar has been criticized by U.S. policymakers for its support of Hamas — which the United States designates as a terrorist organization — and the country’s restrictions on freedoms of expression, association, and assembly do not conform to international standards, according to Amnesty International. Critics have argued that when universities like Georgetown, Carnegie Mellon, and Northwestern establish branch campuses in Qatar, they’re selling out their brand names to a country that doesn’t support democratic values.

Over the last few years, Qatar has engaged in a massive public-relations and policy-influence campaign, according to documents available under the Foreign Agents Registration Act. In 2017 alone, the country spent millions on influencers to do everything from “provide research and NGO support to the Embassy of Qatar” to communicate “with Members of Congress and their staff.” These efforts included Google search ads aimed at increasing public awareness of an embargo imposed on Qatar by other Middle East countries, and direct lobbying against specific legislation, like the Palestinian International Terrorism Support Prevention Act of 2017, which would have imposed sanctions on countries that support Palestinian terrorist groups such as Hamas.

A much quieter part of that campaign appears to be collaboration with some of America’s most prestigious universities. This becomes a potential problem when policymakers and the public look to those universities to provide unbiased research and recommendations for foreign policy. Frequently, university professors are seen as issue-area experts and Members of Congress cite their research and solicit their opinions.

For instance, experts from Georgetown University are often called upon to testify before Congress on foreign policy issues, and the Middle East in particular. While the House of Representatives requires any nongovernmental witnesses testifying to disclose any foreign funding related to the subject of the hearing, POGO has found that this disclosure requirement — known as “Truth in Testimony” — is not strictly enforced, and the Senate does not require any disclosure at all.

Yet Qatar would almost certainly have a significant interest in something like a hearing about its longtime rival Saudi Arabia. In May 2016, Georgetown professor and Brookings Institution Senior Fellow Dr. Daniel Byman testified before the House Foreign Affairs Committee on “the U.S.-Saudi Arabia counterterrorism relationship.” Byman’s Truth in Testimony form did not include any reference to Georgetown’s substantial financial relationship with Qatar. Neither Byman nor Georgetown’s media relations team responded to POGO’s request for comment.

As the Truth in Testimony rule is currently written, such a disclosure is not required, since witnesses only have to disclose funding directly related to the subject of the hearing. POGO’s review of compliance with this rule found that most nongovernmental witnesses use a very narrow definition of “related.” Still, it’s the kind of connection that some Members would like disclosed. Representative Jackie Speier (D-CA), who has proposed a stronger version of the rule that would have required disclosure of all foreign funding received in the past two years, raised conflict-of-interest concerns about undisclosed donations.

“While this funding may not distort the testimony of these witnesses, this financial support should be disclosed for Members to appropriately assess potential conflicts,” Representative Speier stated when introducing the rule.

China was one of the biggest sources of foreign gifts between 2011 and 2017, behind only Qatar, England, and Saudi Arabia. Between 2011 and 2017, the Chinese government, as well as companies and individuals, provided over $426 million to U.S. universities and colleges. According to the Higher Education Act data, Harvard University was the top recipient of money from Chinese entities, reporting over $57 million in the covered period. It’s not uncommon for Members of Congress to seek out Harvard scholars’ perspective and expertise on Chinese-U.S. relations. For instance, in 2017, Harvard professor Dr. Graham Allison testified before the Senate Foreign Relations Committee on American leadership in the Asia-Pacific region, specifically looking at the “View from Beijing.” Because the Senate does not have a Truth in Testimony rule, Allison was not required to disclose the University’s financial relationship with China. Neither Allison nor Harvard responded to requests for comment.

One of the most notable examples of China’s exercise of soft power has been its establishment of Confucius Institutes at over 100 U.S. college or university campuses. Confucius Institutes are nonprofit educational organizations that, according to their website, strive to “support the teaching and learning of Chinese language and culture in the United States.” However, the Chinese Communist Party’s Central Propaganda Department oversees the Institutes, which some say are part of an effort by the Chinese government to downplay the notion that China is an economic or military threat to the United States.

Last year, at least ten American universities closed their Confucius Institutes in response to these concerns and political pressure. Senator Marco Rubio (R-FL) has been a vocal critic of the Institutes, arguing that they have led to improper Chinese influence on the teaching and research programs of leading American universities. Rubio has introduced legislationamending the Higher Education Act to restrict federal funding to any college or university that enters into a Confucius Institute partnership and require such institutions to register under the Foreign Agents Registration Act.

While Rubio’s bill never made it into law, a provision in the John S. McCain National Defense Authorization Act for Fiscal Year 2019 included a watered-down version of those restrictions. The law prohibited any funds authorized under the Act or provided to the Department of Defense from being used for Chinese-language instruction by a Confucius Institute.

Disclosure Laws Insufficient to Show Foreign Influence on the Academy

POGO has written previously about how countries like Qatar and the United Arab Emirates donate millions of dollars per year to prominent Washington, DC, think tanks, many of whose scholars appear before Congress to testify on foreign-policy matters. These same countries spend millions more on lobbyists and PR firms to ensure their message is heard by Members of Congress and the American people alike.

While these influence efforts are legal, it is important for federal disclosure laws to be robust enough to provide transparency in the relationships or we risk undue foreign influence on how our laws and policies toward these countries are shaped. POGO has been critical of the Justice Department’s lack of enforcement of the Foreign Agents Registration Act, as well as the loopholes within the law that can allow improper foreign influence to go unreported or masquerade as promoting domestic interests.

Universities have traditionally been exempt from registering under the Act, but the line between academic research and political influence is not always clear. This is why it is so important for Congress to enforce Truth in Testimony disclosures when nongovernmental witnesses appear before Congressional committees. Likewise, it’s important for universities to self-police and ensure these partnerships are not exploited by foreign governments as a way to access classified or sensitive information. Particularly when these schools are double-dipping on funding for projects with the U.S. government and foreign governments, it’s vital to maintain a separation of information and technology.

Recommendations

Lower the reporting threshold for foreign gifts: POGO recommends that Congress and the executive branch ensure that these financial relationships are as transparent as possible. To that end, we recommend lowering the threshold for reporting foreign gifts from $250,000 per year to $50,000. It’s not uncommon for specific programs or professors to receive smaller grants to directly fund a research project, so lowering the reporting threshold will ensure that those relationships are disclosed as well.

Require Senate witnesses to file Truth in Testimony forms: Currently the Truth in Testimony rule only applies to nongovernmental witnesses appearing before House committees. There is no similar rule in the Senate, despite the same concerns being present. The Senate should adopt an (ideally updated) House rule to ensure its witnesses disclose any potential conflicts of interest stemming from financial relationships with foreign governments.

Expand the Truth in Testimony rule to cover all foreign funding, not just that directly related to the subject of the hearing: While the law covers the most direct conflict-of-interest concerns related to foreign governments, it fails to capture the full scope of foreign influence. Many foreign governments, particularly those shelling out millions to universities, have vested interests in the U.S. posture toward their regions more broadly, as well as general U.S. policies on defense, aid, and investment. Nongovernmental witnesses should be required to disclose the nature of their relationship with all their foreign donors to prevent even the appearance of a conflict.

Require additional disclosure of the purpose of the foreign gifts or contracts: While some universities proactively and publicly disclose their financial relationships with foreign donors, others do not release any public statements and report only the amounts, not the purpose, to the Education Department. POGO recommends amending the Higher Education Act to require universities to report the specific purpose of a foreign gift or contract.