UNITED STATES DEPARTMENT OF EDUCATION

OFFICE OF THE GENERAL COUNSEL

May 19, 2020

The Honorable Jim D. Jordan

Ranking Member
Committee on Oversight and Reform
U.S. House of Representatives
Washington, D.C. 20515

Dear Ranking Member Jordan:

Thank you for your letter of May 4, 2020 to Secretary DeVos. She has shared your letter
with me, and I am pleased to respond on her behalf. An identical response is being sent to the
Ranking Members who cosigned your letter.

We are grateful for your support of the U.S. Department of Education’s (Department)
efforts improving transparency to reduce reliance on undisclosed foreign investment in U.S. higher
education. Under Secretary DeVos’ leadership, this Department is, for the first time, faithfully
enforcing the law. We have given teeth to the longstanding but generally disregarded directive in
Section 117 of the Higher Education Act of 1965, 20 U.S.C. § 1011f, requiring institutions of
higher education (IHE) to disclose gifts from and contracts with foreign governments,
corporations, and individuals, and/or from U.S. persons acting as their agents. In light of
substantial evidence, including bipartisan Senate findings, of the education industry’s
disappointing and continuing disregard for its disclosure duties to the U.S. government and the
American taxpayer, we are taking strong action well within the scope of our legal authority to
enforce and promote compliance.1

1
See, e.g., CHINA’S IMPACT ON THE US. EDUCATION SYSTEM, Staff Report,
Permanent Subcommittee on Investigations, United States Senate at 1, 3, 5, 71-76 (Feb.
2019)
https://www.hsgac.senate.gov/imo/media/doc/PSI%20Report%20China's%20Impact%20
on%20the%20US%20Education%20System.pdf. For example, we have opened nine
investigations of U.S.-based universities, each with very extensive foreign ties; triggered “catch-
up” reporting of over $6.5 billion in previously unreported foreign funds primarily from Chinese
and Middle Eastern sources; issued a modernized foreign money information collection following
extensive public notice and comment; and provided preliminary investigative findings. See
https://www2.ed.gov/policy/highered/leg/foreign-gifts.html. In the coming days, we anticipate
releasing a report supplementing our November 27, 2019 letter to the Senate Permanent
Subcommittee on Investigations; a notice of proposed rule-making under 20 U.S.C. § 1011f(g)
requiring IHE submission of gift agreements and contracts to the Department so that we may verify
reporting compliance; and intensified fact-finding to confirm the accuracy of submitted Section
117 reports.
400 MARYLAND AVE. S.W., WASHINGTON, DC 20202-1100
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The Department of Education’s mission is to promote student achievement and preparation for global competitiveness by fostering
educational excellence and ensuring equal access.
The Honorable Jim D. Jordan
May 19, 2020
Page 2 of 5

The Department shares Congress’ concerns regarding unreported and unregulated foreign
direct investment into the U.S. higher education system, and the potential for foreign sources to
use strategic investments to turn American college campuses into indoctrination platforms. Some
IHE leaders are starting to acknowledge the threat of foreign academic espionage and have been
working with federal law enforcement to address gaps in reporting and transparency. However,
the evidence suggests massive investments of foreign money have bred dependency and distorted
the decision making, mission,2 and values3 of too many institutions.

2
Foreign sources from China and the Middle East use gifts and contracts for propaganda activities
on U.S. college and university campuses. See e.g. CHINA’S IMPACT ON THE US. EDUCATION
SYSTEM, supra at 71-76; POGO, Universities on the Foreign Payroll,
https://www.pogo.org/investigation/2019/02/universities-on-the-foreign-payroll/.
3
See “Enrollment Exodus: Why So Many Chinese Students Choose That ‘Cornfield’ School In
Illinois,” https://will.illinois.edu/news/story/enrollment-exodus-why-so-many-chinese-students-
choose-that-cornfield-school-in-illinois; see also “The End of the Harvard Century,”
https://www.thecrimson.com/article/2020/4/23/harvard-china-scrutiny/. To protect IHE access to
foreign money, one industry special interest group has lobbied heavily against the Department’s
transparency and enforcement efforts. It rejects disclosure of “individual, corporate, or other
organizational [donor] identities” due to a “chilling effect on foreign giving and the willingness of
foreign entities to enter contractual agreements with colleges and universities.” It claims disclosing
foreign sources to the Department would be at odds “with common practice and long-standing
policy at many institutions of allowing all donors, including those living in other countries, to
request confidentiality in their giving” notwithstanding existing IRS requirements; the national
security dangers of anonymous foreign money; and historic evidence almost all institutions
routinely reported foreign source names and address to the Department until the amount of foreign
money massively increased. It admits institutions “do not ask foreign donors or entity partners to
identify their country of citizenship or incorporation when they accept such gifts or enter into
contracts.” It opposes requiring institutions to verify foreign money (e.g. a Confucius Center or
Iranian funded Middle Eastern studies center) does not directly influence curricula. And, likely
signaling a total disregard for the industry’s foreign money supply chain, it contests both
enforcement of the statutory reporting requirement for gifts from and contracts with the agent of a
foreign source and IHE certification to the Department of compliance with U.S. anti-terrorism,
sanctions, export controls, and anti-boycott laws. See generally, American Council on Education,
Comment on FR Doc # 2019-19296, November 5, 2019,
https://www.regulations.gov/document?D=ED-2019-ICCD-0114-0022.
The Honorable Jim D. Jordan
May 19, 2020
Page 3 of 5

The Department also shares Congress’ concerns regarding the threat posed by the Chinese
Communist Party (CCP) to research integrity, academic freedom, and American security. The
multiple indictments of IHE professors for undisclosed financial and other ties with the government
of China, the CCP, and CCP-controlled enterprises; the information disclosed in our November 27,
2019 letter to Senators Portman and Carper; the rapid development of China’s naval, sea, and air
power; its efforts to rupture our long-held alliances and important trading relationships with major
states in the Far East; and China’s stated desire to deny the use of the Yellow, East China, and
South China Seas to American air and naval forces each provide a compelling legislative purpose
and justification for Congressional inquiry. Therefore, the Department will make every effort to
respond quickly and make available as much information as the law allows.

Your May 4 letter requests a briefing and records production. With respect to the former,
we are available essentially at your convenience. Please provide us with acceptable dates and we
will have a meeting scheduled quickly. We anticipate needing approximately 45 minutes to an
hour for our presentation, plus such additional time as you desire for questions and discussion. By
copy of this letter, we invite Majority staff from each listed Committee to participate in this or in
a separate briefing. The danger posed to our national interest by undisclosed IHE foreign funding
and lax federal enforcement is thoroughly nonpartisan in nature.

With respect to the latter, the Department of Justice Office of Legal Counsel has
determined Ranking Members “may, like any person, request agency records. When they do,
however, they are not acting pursuant to Congress’s constitutional authority to conduct oversight
and investigations.” Authority of Individual Members of Congress to Conduct Oversight of the
Executive Branch, 41 Op. O.L.C. 2-3 (May 1, 2017) available at
https://www.justice.gov/olc/file/966326/download. The Executive Branch has historically
exercised its discretion in determining whether and how to respond, “following a general policy
of providing only documents and information that are already public or would be available to the
public through the Freedom of Information Act, 5 U.S.C. § 552.” Id. at 3-4. Generally, this
Department has treated information requests from Ranking Members with similar gravity and
diligence as formal oversight requests.

In this case, the Department has a strong interest in protecting the confidentiality and
integrity of its investigations. Inappropriate disclosure of confidential information could lead to
separation of powers concerns and will certainly impair the factfinding and enforcement work
Congress has authorized us to do. Furthermore, the Department has yet to receive critical
information needed to confirm the accuracy of previously submitted Section 117 reports. Certain
institutions have yet to produce requested emails, metadata, and other information regarding
business relationships with, and faculty funding from, Chinese, Middle Eastern, and Russian
foreign sources. The Department is negotiating for this important information and hopes to have
access to all relevant records (and witness interviews, if appropriate) in the near term. At the same
time, the Department is evaluating its available statutory and regulatory options if negotiations and
compromise fail. Finally, we are consulting with the U.S. Department of Justice and others to
explore all potential pathways for full and fair disclosure of IHE foreign funding under Section
117.

Also, apparently responding to media reports of your letter, IHE counsel has contacted the
Department and claimed Freedom of Information Act exemptions and legal privileges to block
record production to Congress. Although we are concerned there may be evidence suggesting
The Honorable Jim D. Jordan
May 19, 2020
Page 4 of 5

certain institutions could be “overmarking” documents with business information confidentiality

and privilege claims, the Department believes it may be constrained to withhold certain records
from you that might otherwise be appropriately produced in a constitutionally mandated
accommodation. Therefore, the Department proposes the following approach:

(1) Generally applying our business information rule, 34 C.F.R. § 5.11, we will
promptly notify each IHE under investigation of your request and of our intention to
provide Congress with all responsive records in our possession, absent objection within a
time certain. An objecting IHE must provide written specification of the records designated
for withholding and specific supporting legal grounds. We will then evaluate those
objections in accordance with law and advise your staff accordingly.

(2) We will summarize for your staff the Department’s deliberative,

confidential, and other exempt or privileged materials we intend to withhold, and then
engage in consultations to determine if a mutually acceptable resolution is possible.

We believe it would make sense to have a single Congressional staff contact to coordinate
both the briefing and record production for you and the other Ranking Members. Our team will
reach out to set dates, discuss your priorities, and work on a production schedule. As always, please
feel free to contact Jordan Harding, Office of Legislation and Congressional Affairs, at 202- 401-
0020 if you have any questions.

Thank you again for your attention to this critical matter.

Sincerely yours,

Reed Digitally signed by Reed

Rubinstein

Rubinstein Date: 2020.05.19 11:28:49

-04'00'

Reed D. Rubinstein

Reed D. Rubinstein
Principal Deputy General Counsel delegated
the authority and duties of the General Counsel

Cc: The Honorable Carolyn B. Maloney, Chairwoman

Committee on Oversight and Reform

The Honorable Robert C. “Bobby” Scott, Chairman

Committee on Education and Labor

The Honorable Bennie G. Thompson, Chairman

Committee on Homeland Security
The Honorable Jim D. Jordan
May 19, 2020
Page 5 of 5

The Honorable Eddie Bernice Johnson, Chairwoman

Committee on Science, Space, and Technology

The Honorable Adam B. Schiff, Chairman

Permanent Select Committee on Intelligence

The Honorable Adam Smith, Chairman

Armed Services Committee

The Honorable Eliot L. Engle, Chairman

Foreign Affairs Committee