Harvard and Yale universities investigated for possible non-disclosure of foreign money

[February 13, 2020]  By Brendan O'Brien

(Reuters) - The U.S. Department of Education said on Wednesday it 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 $375 million in foreign money over the last four years, the department said in a statement.

"This is about transparency," U.S. 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."

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

Education department records over the last three decades show U.S. universities and colleges have reported more than $6.6 billion 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, said university spokeswoman Karen Peart.

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

The education department said that 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 United States.

Harvard did not respond to a request for comment.

The exterior of The Department of Chemistry and Chemical Biology at Harvard University. The head of the department, Dr. Charles Lieber, is charged with lying to the federal authorities in connection with aiding China, at Harvard University in Cambridge, Massachusetts, U.S. January 30, 2020. REUTERS/Katherine Taylor

The education department did not put a dollar amount of what Harvard potentially did not report.

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 U.S. Justice Department with lying about their purported 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 impact on U.S. education, a Senate committee on investigations described foreign spending on U.S. schools as “a black hole” because colleges and universities routinely fail to comply with the law.

(Reporting by Brendan O'Brien in Chicago; editing by Grant McCool)

[© 2020 Thomson Reuters. All rights reserved.]

Copyright 2020 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.  Thompson Reuters is solely responsible for this content.