Colleges are anxiously watching as the U.S. Senate prepares to act this week on legislation meant to counter China’s global influence that could impose sweeping new government oversight on foreign gifts and contracts.
The bipartisan “Strategic Competition Act of 2021
,” scheduled to be taken up by the Senate Foreign Relations Committee on Wednesday, has things for higher ed to like, including new investment in research and technology to counter Chinese competition.
But a proposal in the bill that could effectively subject grants, contracts, or gifts above $1 million from foreign sources to U.S. government approval has alarmed university lobbyists and research officials I’ve spoken with.
In 2019, there were about 400 gifts or contracts from foreign governments, companies, or individuals to universities totaling $1 million or more, according to the U.S. Department of Education.
Specifically, the measure would subject higher-ed institutions to oversight by the Committee on Foreign Investment in the United States, a little-known multi-agency group that reviews global business deals for national-security concerns. If CFIUS thinks the transaction is a risk to the U.S., it can impose new requirements, suspend the deal, or even kill it
— as it did three years ago when a Singapore company attempted to take over the chipmaker Qualcomm
The bill would make the U.S. education secretary part of CFIUS and make part pf the group’s scope of work to determine “whether there are foreign malign influence or espionage activities directed or directly assisted by foreign governments against institutions of higher education.” Oversight would kick in if the gift or contract relates to research, development, or production of critical technologies and provides the foreign partner with potential access to unpublished information, or if it is a restricted or conditional gift or contract that “establishes control.”
Colleges fear that the provision could give the federal government veto power over some overseas partnerships. Although the language is in a bill focused on the Chinese government, CFIUS’ jurisdiction is not country-specific.
If enacted, the bill would first create a pilot program for higher-ed institutions, which would have to file foreign-funding disclosures with CFIUS in addition to the Education Department, as currently required. The measure’s authors — the top Democrat and Republican on the Foreign Relations Committee — pledged to try to minimize the potential new reporting burden on colleges and to respect their academic freedom.
The bill is a work in progress, though, and the provision could be changed as it moves forward.
Still, higher-ed officials questioned the need for the legislative change, saying that there was little evidence that universities’ international work raises national-security concerns. Instead, the measure could slow international scientific research and collaboration, they fear.