The U.S. Department of Education’s Office of the General Counsel (OGC) on Thursday announced the opening of a foreign funding investigation into the University of Pennsylvania (UPenn) following the discovery of inaccurate and untimely financial disclosures from foreign sources.
The investigation centers on potential violations of Section 117 of the Higher Education Act of 1965, which mandates that institutions receiving federal financial assistance report gifts and contracts from foreign sources valued at $250,000 or more annually.
According to the Department, a review of UPenn’s submitted foreign reports revealed inconsistencies and omissions. Acting General Counsel Tom Wheeler highlighted UPenn’s concerning compliance history, noting the university failed to disclose any foreign funding until February 2019, despite the decades-long statutory requirement.
“UPenn has a troubling Section 117 compliance history, having failed to disclose any foreign funding until February of 2019 despite a decades-long statutory obligation to do so,” said Acting General Counsel Tom Wheeler. He added that while enforcement was less stringent in the previous administration, the current administration “will vigorously uphold the law and ensure universities are transparent with their foreign gifts and investments.”
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Wheeler noted the importance of this investigation in preventing the potential “infiltration of our nation’s campuses by foreign governments and other foreign interests” and asserted the public’s right to know about the impact of foreign funding on U.S. universities, particularly critical research institutions. He expressed hope for UPenn’s cooperation with the investigation.
To ascertain the full scope of UPenn’s compliance and the accuracy of its previous disclosures, the Department has issued a records request requiring the university to produce a wide range of documents within 30 calendar days. These records include, but are not limited to:
- Tax records from January 1, 2017, to the present.
- A detailed description of UPenn’s procedures and systems for Section 117 compliance since January 1, 2017.
- Copies of written agreements with foreign entities concerning international student admissions, faculty, scholars, and research personnel since January 1, 2017.
- Copies of agreements with foreign entities detailing the involvement of non-U.S. individuals or entities in university research collaborations since January 1, 2017.
- Identification of personnel involved in assisting international students and staff with visas, work permits, and travel since January 1, 2017.
- Identification of research personnel involved in bilateral or multilateral research collaborations with non-U.S. institutions since January 1, 2017.
- A complete list of all legally affiliated university partnerships and relationships outside the U.S. with any foreign government since January 1, 2017.
- Identification of personnel responsible for overseeing compliance with foreign government talent recruitment program restrictions and export/import control regulations since January 1, 2017.
- A comprehensive list of all foreign gifts, grants, contracts, and restricted agreements from any foreign source received by UPenn or its affiliates since January 1, 2017.
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Section 117 of the Higher Education Act, amended in 1986, requires institutions of higher education that receive federal financial assistance to report foreign source gifts and contracts of $250,000 or more biannually.
This measure is intended to promote transparency regarding foreign influence in U.S. higher education and protect national security and academic integrity. Noncompliance can lead to enforcement action by the Department of Justice, including civil penalties or the potential loss of federal funding eligibility.
This investigation into UPenn follows similar recent actions by the Department of Education, including records requests and notices of investigation sent to Harvard University and the University of California, Berkeley, also based on reviews revealing inaccurate and incomplete foreign financial disclosures.
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