Sen. Cruz Introduces Bill Penalizing Universities that Mask Foreign Funding
WASHINGTON, D.C. – U.S. Sen. Ted Cruz (R-Texas) introduced the Foreign Influence Transparency and Accountability Actto penalize universities that take money from foreign adversaries and do not report foreign funding as required by the Higher Education Act.
Sen. Cruz said, “The Chinese Communist Party expends vast resources to control what Americans see, hear, and ultimately think, as do other adversaries including Russia and Iran. Unchecked foreign funding flowing into American universities opens the door for such adversaries to influence American students and research. This bill would ensure that higher education institutions are held accountable if they fail to disclose foreign funding, as required by law. I call on my colleagues to expeditiously advance it, for the House to then pass it, and to get it to the President.”
This bill is supported by Heritage Action and FDD Action.
Ryan Walker, EVP for Heritage Action said, “The Department of Education has failed the American people for years as billions in undisclosed foreign funding poured into our higher education system. $6.5 billion has seeped into academia from adversarial nations such as China and Russia. The Foreign Influence Transparency and Accountability Act will address the failures on foreign funds to academic institutions and force universities to be transparent as to where their endowments are coming from. Heritage Action commends Senator Ted Cruz for introducing this legislation and for his staunch commitment to upholding institutional integrity, transparency, and American values within higher education.”
Nick Stewart, Senior Director of Government Relations for FDD Action said, "FDD Action strongly supports Senator Ted Cruz’s Foreign Influence Transparency and Accountability Act, a vital measure to safeguard American higher education from foreign interference. By imposing rigorous audits and substantial penalties, this legislation ensures transparency and accountability, deterring malign actors like China and Russia from exploiting our universities. Protecting our academic institutions from covert foreign influence is essential for national security, and we urge swift passage of this bill."
Companion legislation was introduced in the House by Rep. Brandon Gill (R-TX-26).
Rep. Gill said, “American universities that receive taxpayer funding and mold the minds of our next generation of working adults should not be compromised by the foreign influence of adversarial nations and their big ticket donations. I am honored to team up with Senator Ted Cruz of Texas to combat foreign propaganda in our higher education system through this legislation.”
Read the full text of the bill here.
BACKGROUND
The Higher Education Act requires U.S. colleges and universities to disclose foreign gifts and contracts that total $250,000 or more in a calendar year. Under this law, all U.S. institutions of higher education that receive federal funding must comply with the reporting requirement.
This bill would require the following:
- Implement a 300% excise tax on all funds institutions receive from designated countries of concern.
- Mandate a biennial audit of 30 universities, prioritizing institutions with large endowments and a history of misconduct.
- Implement a 110% excise tax on unreported funds by institutions that fail to disclose funding from any foreign entity.
The taxes are cumulative, meaning an institution of higher education receiving money from an entity of concern and failing to report under section 117 is assessed a 410% excise tax.
This past month, President Trump’s administration launched an investigation into the University of California over its alleged failure to report $220 million from the Chinese government.
###