Confucius Institutes Better Report or Else | KingSpry

Confucius Says… Better Report or Else!

Dr. Kathleen Conn

Posted on November 4th, 2019
by Dr. Kathleen Conn

In what the U.S. Government Accountability Office characterizes in its Report to Congress as a “soft-power” initiative, China has financially supported Confucius Institutes (CIs) in colleges and universities in 44 states, as well as in K-12 school districts.

The stated purpose of the CIs is to enhance the image of China, capitalizing on the image of Confucius, the ancient Chinese philosopher symbolizing morality, justice, and honesty. But the U.S. federal government is concerned about the lack of transparency of the CI agreements, potential stifling of academic freedom, and Chinese interference with American public diplomacy efforts and intellectual property.

As a result, the U.S. Department of Education is cracking down on reporting requirements for gifts from foreign sources and foreign governments.

China began sponsoring its CIs in the U.S. in 2004. In October, 2019, the National Association of Scholars reported that eighty-nine CIs are established in the United States, seven of these in K-12 public school districts.

An agency of the Chinese Ministry of Education, the Hanban, provides Chinese teachers, textbooks and other materials, and operating funds, at start-up costs ranging between $100,000 and $200,000. Teachers are recruited in China, and vetted by the Chinese government, with no input from the receiving schools.

Between 2006 and 2018, China reportedly funneled at least $160 million into U.S. educational institutions. The numbers of CIs in the various states differ, and, although the CIs are similar in purpose, they may differ in internal structure and operation.

Pennsylvania hosts two CIs, one at the University of Pittsburgh and one at Temple University.

The CI at the University of Pittsburgh has sixteen teachers and the university website indicates that the CI serves approximately 4,000 students K-16, in both Pennsylvania and Ohio, creating “a platform to better understand and learn about China and the Mandarin language.”

Temple University’s CI has three Temple faculty members and only three teachers from China. The CI faculty tutor students in Chinese language courses, and the CI provides graduate fellowships for study in China, and sponsors two-week, expense-paid “Understanding China” trips to China for administrators and government officials.

However, in February 2019 Senators Rob Portman and Tom Carper, under the auspices of the United States Senate Permanent Subcommittee on Investigations, issued a bipartisan report critical of the operation of China’s CIs in the United States. They expressed disapproval of the lack of transparency in the operation of the CIs, as well as China’s denial of full reciprocity for U.S. cultural outreach efforts in China.

The report cautioned that the lesson of the 2016 election, and the coming 2020 election, should make the U.S. vigilant in foreign efforts that seek to influence American public opinion. In addition to concerns about inappropriate use of J-1 visas related to CI exchange visitors, Portman and Carper reported that the State Department is also concerned that schools are not complying with the Higher Education Act reporting requirements for foreign gifts and contracts.

Section 117 of the Higher Education Act (HEA) of 1965 requires institutions that receive Title IV student assistance funding to report receipt of any gifts or contracts from a foreign source valued at $250,000 or more per calendar year.

The Portman/Carper report alleged that over 70% of colleges and universities failed to report sums over that amount received from the Hanban. Failure to report could trigger a civil action by the Department of Justice to ensure compliance. However, the American Council on Education (ACE) asserts that the reporting rules are unclear. For example, many educational institutions have foundations through which they accept funding, and the requirements do not specify whether gifts to foundations must be reported.

ACE also contends that the statutory reporting requirements were not issued as formal regulations, but simply announced in two Dear Colleague Letters, one in 1995 and the latest in 2004.

Despite ACE’s complaints, the Department of Education (DOE) has begun investigating colleges and universities that the Department suspects of under-reporting of foreign gifts.

A “Notice of Investigation and Record Requests” was sent to Georgetown University and to Texas A&M University in June 2019. This was followed in July by the same Notice letter to Cornell and Rutgers Universities. Both letters were published in the Federal Register. In addition to funds from China, the notices seek information about financial gifts and contracts from Qatar, another large contributor to American institutions of higher education.

Even more worrisome, according to ACE Government Relations, in September 2019, DOE signaled that it plans to expand the data collection under Section 117 with a new online reporting portal.

DOE wants to reduce to zero the current $250,000 threshold for reporting, to broaden the definition of “institution” to include foundations, and to certify compliance with certain anti-terrorism, export control, and other trade law and regulations over which DOE has no enforcement authority. The penalties for non-compliance may also be personalized, potentially including imprisonment.

So What Does This Mean for Your College or University?

While colleges and universities struggle to establish clarity in the HEA reporting requirements, they worry about the effects on the continuing recruitment and enrollment of international students.

The new DOE push reportedly has led some countries, especially China, to warn its students about “risks” in attending American universities. Enrollment of international students is a key funding stream for American institutions of higher education, which is already declining because of stricter U.S. visa policies.

With the threat of DOE investigations and DOJ lawsuits for potentially non-compliant entities, it is imperative that colleges and universities make good faith attempts toward compliance with current HEA reporting requirements. Careful review of the four “Notice of Investigation and Record Requests” with legal counsel would be a prudent first step in determining what compliance looks like.

Meanwhile, the efforts of ACE, representing over 1,700 leaders of colleges and industry groups, to push DOE’s clarification of reporting requirements will hopefully bear fruit, and stem the tide of further notices of investigations.

If you have any questions, please consult with your legal counsel or one of the higher education attorneys at KingSpry.

This Collegiate Comment is a publication of the KingSpry Higher Education Law Division. It is meant to be informational and does not constitute legal advice.