Foreign Funding’s Questionable Odor

“Money doesn’t stink.” This proverb—pecunia non olet in the original Latin—is associated with the Roman emperor Vespasian, in justification of his decision to use public toilets to generate revenue. When the emperor’s son expressed disgust at the tax, Vespasian allegedly held up a coin, asking if it smelled. When his son replied no, the emperor observed: “And yet it is derived from urine.”

Vespasian’s thoughts are oddly relevant to a contemporary issue: efforts by foreign countries to use financial donations to influence American universities. On April 23, President Donald Trump issued an executive order that seeks to “end the secrecy surrounding foreign funds in American educational institutions, protect the marketplace of ideas from propaganda sponsored by foreign governments, and safeguard America’s students and research from foreign exploitation.” Two months earlier, Representatives Virginia Foxx (R-NC) and James Comer (R-KY) sent a letter to the acting education secretary, noting that while “foreign nations [have given] more than $57 billion to U.S. institutions since 1981,” “many institutions have failed,” since 2020, to make the legally required disclosures.

Is money just money, especially at a time when colleges are desperate for it? The issue is Vespasian: Does money have an odor? Is money just money, especially at a time when universities are desperate for it, or does the stench of its origin taint it indelibly? The disclosure requirements prioritized by the Trump administration make bipartisan sense. They are based on legislation that has been supported by both parties and that simply requires institutions to be transparent about foreign donations. Even so, partisan politics and ideological preconceptions make it difficult for both sides to see eye-to-eye on this crucial issue.

Partisan politics and ideological preconceptions make it difficult for both sides to see eye-to-eye on this crucial issue. The legal basis of the Trump administration’s request that universities disclose foreign donations is Section 117 of the 1965 Higher Education Act (or HEA). Section 117 was, however, approved only in 1986, when Congress reauthorized the HEA. The intentions behind the addition serve as a reminder that contemporary concerns are hardly new. Section 117 was drafted by the American Jewish Congress (AJC), with input from the American Council on Education (ACE) and the Association of American Universities (AAU). In an opinion piece from the time, William Maslow, the AJC’s general counsel, stated that the measure “sought to protect academic integrity threatened by gifts or contracts with foreign entities containing all sorts of restrictive conditions.” He singled out “the most notorious of such incidents,” “the huge gifts from Arab governments to Georgetown University creating a Center for Contemporary Arab Studies.”

The main provision of Section 117 (which became 20 U.S.C. § 1101f) is the requirement that universities report biannually “restricted or conditional” gifts and contracts over $250,000. As Maslow noted, the section “does not forbid anything”: It simply requires disclosure. The law applies to donations that impact faculty employment status, establish “departments, centers, research or lecture programs or new faculty positions,” entail the admission of particular students, and award grants and scholarships to students of “a specified country, religion, sex, ethnic origin or political opinion.” The Department of Education maintains a database of all the Section 117 disclosures filed.

Yet, despite its modest requirements, Section 117 went virtually unenforced for decades. The Department of Education issued no regulations defining how universities were to comply with it, except for two letters sent in 1995 and 2004. Meanwhile, by the late 2010s, Saudi Arabia, Qatar, and China significantly increased their investment in American colleges. In 2008, a Senate committee instructed the department to “prohibit avoidance of the disclosure of foreign gifts.” In 2011, the FBI—whose director at the time was Robert Mueller—issued a report warning that foreign powers “use varied means to acquire information and technology to gain political, military, and economic advantages,” such as intellectual property theft, spy recruitment, “improper” uses of the student visa program, and misinformation. In 2019, a bipartisan Senate committee report expressed alarm over China’s growing reach into American higher education, while also observing that the real impact of foreign donations was “effectively a black hole,” as roughly 70 percent of universities either failed to report or underreported foreign donations.

In 2019, Education Secretary Betsy DeVos began to take measures against questionable foreign influence on American campuses. First, she insisted on compliance with Section 117’s disclosure requirements. Some $6.5 billion in foreign funding that had never been publicly reported was discovered, notably from China and Qatar. Confucius Institutes—cultural centers created by China on American campuses as a way of wielding soft power—came under particular scrutiny. By 2022, 111 of the 118 Confucius Institutes established at American universities were shut down, including ones at UNC Charlotte and NC State. The administration also prosecuted faculty who were inappropriately in the pay of foreign governments. A notorious case concerned Charles Lieber, the chair of Harvard’s chemistry department. Lieber was a participant in China’s “Thousand Talents” program, yet failed to disclose that the Wuhan Institute of Technology (and hence the Chinese government) was paying him extravagantly, including a $50,000 monthly stipend and some $1.5 million to run a laboratory in China.

Globalization makes American universities vulnerable nodal points, particularly as the country enters a new Cold War. Foreign influence at American universities is a serious matter. Not only is the American university system world-class (for now, at least), but it is also at the top of the global higher-education pecking order: All things considered, many students, professors, and researchers throughout the world would rather be in the United States. American campuses tout their “globalized” character as a self-evident virtue. Yet this admirable commitment also makes American universities vulnerable nodal points, particularly as the country enters a new Cold War. The exposure of universities to a perilous international environment should be a classic instance of “partisan politics stopping at the water’s edge.” The recent adoption of the DETERRENT Act—a measure that would strengthen the provisions of Section 117—by the House of Representatives with the support of 31 Democrats suggests some bipartisan support is within reach. Unfortunately, in most cases, this crucial issue is heightening polarization rather than mitigating it.

The Trump administration often appears less concerned with clamping down on foreign influence than with waging war against higher education. While insisting on university compliance with Section 117 is perfectly reasonable, the Trump administration often appears less concerned with clamping down on foreign influence on campuses than with waging war against higher education as such. The education department’s requests for Section 117 compliance, for example, went beyond insisting on disclosure, additionally demanding information about individual faculty members. It also initiated queries based on universities’ international-partnerships agreements. The administration has threatened criminal charges, where Section 117 refers only to civil charges. Finally, in dealing with matters of corruption, consistency and integrity matter. While it is perfectly reasonable, for instance, to be suspicious of Qatar’s intentions in making extensive donations to American institutions, it strains credulity to say that suspicion is out of place when the same country offers the president a luxury aircraft as a “gift.”

Liberals would be well advised not to default to knee-jerk partisanship on this issue. Many believe that suspicion of foreign influence reeks of racism and nativism and are wary of the Trump administration’s pro-Israel motives. But there are solid progressive reasons for being skeptical of such donations. In 2015, faculty and journalists raised concerns, for instance, about New York University’s Abu Dhabi campus. The New York Times called attention to the harsh labor conditions to which immigrant laborers were exposed in building the campus. Andrew Ross, an NYU professor who has investigated labor practices in the United Arab Emirates, was banned from traveling to Abu Dhabi despite contracts that stated that the foreign campus would have the same degree of academic freedom as NYU. Surely the legitimate concerns that progressives had about those practices should apply to the role played by similar governments on campuses in the United States itself. Progressives have also criticized the way in which conservatives and free-marketeers have sought to influence campus culture through the creation of centers or special curricula. Shouldn’t this suspicion of using money to promote ideological agendas also apply to China, Qatar, and Saudi Arabia?

Moreover, as the Democratic electorate has grown increasingly wealthy and identified with college education, philanthropy benefiting universities has become, for many liberals, a practice whose virtue is beyond question. This outlook dovetails with several major trends in higher education. For better or worse, universities have become corporatized. Public institutions receive an ever-waning share of their budgets from state appropriations. In this context, the top-dollar tuition rates paid by foreign students and donations of any kind have become all the more precious. Sue Cunningham, the president of the Council for Advancement and Support of Education, has defended foreign philanthropy by noting that, between 2010 and 2016, public funding of education fell by 3.14 percent, while private support grew by roughly the same amount. Over half of private donations go to current operations rather than capital growth: Universities literally depend on philanthropy just to function. In such circumstances, it stands to reason, Cunningham maintains, that philanthropy—including foreign philanthropy—“has become a vital element of higher education institutions’ funding mix.”

The problem of foreign influence is also exacerbated by the role of university administrators—particularly presidents—and the astronomical compensation they receive. The American Council on Education’s 2017 College President Survey found that presidents “anticipate that state and federal funding will decline in the years to come, and nearly all spend most of their time on matters related to fundraising and budget and finance.” Consequently, many “are turning to revenues from private gifts, grants, and contracts, tuition and fees, and endowments to fill in the gaps left by receding public support.”

The fact that both parties share the concern should create space for sensible cooperation on the issue of foreign donations. From this perspective, the testimony of elite university presidents at recent Congressional hearings is unsurprising. In response to Representative Elise Stefanik’s question about whether Harvard received funding “from foreign entities and governments” to support its Middle East Studies Department, Harvard president Claudine Gay channeled her inner Vespasian: “We receive funding from a variety of sources because we have alumni from all over the world.” Her answer was less a dodge than a painfully honest confession. What is a university president supposed to do, if not take money from wherever he or she can get it? Like the funds generated by Roman public urinals, donations—foreign or otherwise—are, for the modern administrator, odorless.

Democrats and Republicans both believe that, in an increasingly dangerous international environment, foreign powers are leveraging their financial resources to corrupt to their advantage strategically important sectors of American society. The problem is that, in an era of no-holds-barred partisanship, they disagree as to which sectors are the most exposed. The fact that they both share the concern should, in principle, create space for sensible cooperation on the issue of foreign donations to higher education. Section 117 disclosure rules are reasonable and necessary. Yet both sides also need to reflect on how they contributed to the current situation. Some money stinks—and there should be incentives to smell it.

Michael C. Behrent is a professor of history at Appalachian State University.