Department of Education Investigates University of Pennsylvania Over Foreign Funding Discrepancies

News Summary

The U.S. Department of Education is investigating the University of Pennsylvania for allegedly failing to accurately disclose foreign funding, following a review of financial reports. Concerns center around incomplete disclosures of significant foreign donations required under federal law. Penn has 30 days to respond to the inquiry, which signifies heightened scrutiny of compliance with transparency regulations in higher education. This review showcases ongoing efforts to enhance accountability regarding foreign contributions to U.S. universities.

Philadelphia – The U.S. Department of Education is conducting an investigation into the University of Pennsylvania (Penn) due to concerns over incomplete foreign funding disclosures. This inquiry was initiated on May 8 after a review of Penn’s financial reports uncovered “inaccurate” and “incomplete” information regarding foreign donations and contracts.

The primary focus of the investigation is Penn’s alleged failure to comply with Section 117 of the Higher Education Act of 1965, which mandates that postsecondary institutions receiving federal financial assistance disclose qualifying foreign gifts and contracts that amount to $250,000 or more within one year. Penn has been granted a period of 30 days to respond to the Department of Education’s request for additional documentation and information.

The letter from the Department of Education was directed to Penn’s President, Larry Jameson. The correspondence highlights the potential submission of incomplete, inaccurate, and untimely disclosures about foreign funding. This investigation is particularly concerning given that Penn has not previously disclosed any foreign funding until February 2019, despite being obligated to do so for several years.

The inquiry revealed that Penn failed to promptly report 61 out of 115 foreign funding disclosures submitted in January. This delay has raised suspicions of non-compliance with the timeliness regulation. The investigation also highlights significant issues surrounding the categorization of certain transactions and the anonymity of donors that was previously permitted but is now prohibited by the Department.

Request for information from the Department of Education includes a range of documents such as tax records, compliance procedures regarding Section 117, and details on personnel linked to international student visas post-January 1, 2017. Moreover, the Department is seeking documentation outlining Penn’s partnerships with foreign institutions and complete outlines of all foreign gifts, grants, and contracts.

The Education Department’s Acting General Counsel, Tom Wheeler, expressed concerns about Penn’s history of compliance with the disclosure paradigm outlined in Section 117, deeming it “troubling.” Reports suggest that between February 2019 and June 2020, Penn anonymized 176 foreign donations totaling around $80 million. This level of undisclosed funding raises questions about foreign influence within higher education institutions.

Penn is recognized as the fourth largest recipient of foreign funds among American universities, having received approximately $2.54 billion over recent years. Reports indicate significant financial contributions from foreign entities, including Saudi Arabian donors and possible Qatari sources, which have raised alarm about potential antisemitism and anti-Israel sentiments on campus.

This investigation into Penn follows previous actions taken by the Department of Education concerning other prestigious institutions like Harvard University and the University of California at Berkeley over similar allegations regarding foreign funding disclosures. The increased scrutiny aligns with a broader commitment from Republican lawmakers to enhance transparency around foreign donations to counteract perceived influences on academic environments.

In addition to this investigation, Penn had previously come under scrutiny for issues related to Title IX policies regarding transgender athletes competing in women’s athletics, with compliance demands from the Department of Education. This multifaceted investigation showcases a growing trend among regulatory bodies to enforce stricter compliance with federal regulations in an effort to promote accountability and transparency in American higher education systems.

The intensification of investigations into foreign funding practices reflects ongoing national conversations about foreign contributions in American higher education, particularly after reports indicated that at least 100 universities had failed to disclose a staggering $13 billion in foreign contributions. As the landscape of education continues to evolve with increasing international ties, ensuring transparency in foreign funding remains a pivotal concern for institutions, regulators, and the wider public.

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Additional Resources

• The Daily Pennsylvanian
• The New York Times
• Washington Free Beacon
• Washington Examiner
• Reuters