Stanford’s settlement with Justice Department shows how deep China has its claws in our universities

Just In News | The Hill

Last week, the Department of Justice announced a settlement agreement with Stanford University relating to Stanford’s failure to disclose foreign financial involvement in its research programs.

Even as it was forced into this settlement, Stanford was nonetheless successfully applying for significant federal research grants from the Departments of the Army, Navy, Air Force, NASA and the National Science Foundation.

Filed in the U.S. District Court for Maryland, the agreement reveals Stanford’s repeated failure to disclose Chinese-funded research agreements in its applications for federal research grants from federal agencies between 2015 and 2020.

To wit, Stanford received significant federal research grants while failing to disclose significant research faculty ties with China’s Fudan University.

For Stanford, the agreement is a sweetheart deal. It will admit no liability and pay only $1.93 million to the Justice Department. It also promises to “work with the NSF” on “best practices in the areas of gifts funding research projects” and “current and pending support disclosures.”

Stanford failed to report the Chinese funding of a prominent Stanford chemistry professor who is named as the “principal investigator” for several of the federal research grant proposals. It repeatedly failed to disclose his and other Stanford faculty members’ “overcommitment” to Fudan University in its grant applications. If federal agencies had known that Stanford’s chemistry faculty was essentially double-booked with Fudan University, Stanford’s eligibility for multiple research grants would have been jeopardized.

Fudan University is a prominent Chinese research institution, and Stanford’s ties with it are extensive. Stanford co-directs the Fudan-Stanford Institute for China Financial Technology and Risk Analytics, and its Graduate School of Business partners with the Fudan School of Management.

In 2019, Fudan University altered its charter by promising its “adher[ence] to the leadership of the Chinese Communist Party (CCP)” and “the party’s educational policy.” The CCP’s dominance of Fudan University assures that research developed there may be fully utilized in the CCP’s military-civil fusion efforts that compose a critical part of China’s efforts to eclipse the military and economic capabilities of the U.S. and its allies by 2025. Despite this, Stanford’s ties with Fudan remain undiminished.

Stanford is not alone in its close Chinese research partnerships that may threaten U.S. national security interests. Yale boasts that it has “the deepest relationship with China” of American universities, with significant joint research collaborations in climate science, immunology, and healthcare policies with Fudan University and several other Chinese institutions. In 2017, it partnered with the China Scholarship Council to recruit graduate students “to train leaders who can contribute significantly to research in China.” In 2023, Yale ranked 9th in total federal funding received by U.S. universities (out of about 2,800 four year colleges and universities). In fiscal 2022, it received more than $591 million from the National Institutes of Health and more than $30 million from NSF.

Harvard operates two joint medical training programs with Fudan University. Its Harvard China Health Partnership is notable for its research partnerships with leading Chinese universities and Chinese government health agencies to provide “a robust platform for multi-disciplinary and multi-site research.” In 2023, Harvard ranked 10th in total federal funding received by U.S. universities. In fiscal 2022, it received more than $392 million from NIH and more than $53 million from NSF.

Stanford, too, is a major recipient of federal dollars: 78 percent of its sponsored research projects are funded by the American people. In 2023, it ranked sixth in total federal funding received, including major taxpayer support for its $1.82 billion annual research expenditures. In fiscal 2022, it received more than $651 million from the National Institutes of Health and more than $61 million from the National Science Foundation.

Universities are big businesses with global ambitions, despite their non-profit status. Together, the current endowments of these three universities exceed $127 billion, and their annual operating expenses exceed several state budgets.

The American people see these universities, perhaps incorrectly, as exclusively American institutions and reward them with significant federal funding. Federal taxpayer support accounts for about 55 percent of total research and development funding at our colleges and universities. In return, our federal agencies require a modest level of transparency regarding foreign funding and involvements, including foreign gifts and contracts.

Because of repeated failures to comply with these reporting requirements, the U.S. Department of Education launched civil investigations into all three universities in 2019 and 2020. Its initial findings indicated that between 2010 and 2020, Stanford failed to report more than $64 million in Chinese donor identities — disclosure failures that coincided with Stanford’s unprecedented expansion of its Chinese operations.

FBI Director Christopher Wray has repeatedly warned of China’s threat amid a high level of “naivete on the part of the academic sector.” In response, many of our most sophisticated universities, supported by massive infusions of taxpayer dollars, continue to ignore basic disclosure requirements. The same universities would never tolerate such deceptive disclosure failures from their own grant applicants.

China, our foremost adversary, expects a return on its investments in American research faculty and institutions — but so too should the American people and our elected officials.

As China becomes increasingly belligerent, universities receiving taxpayer funding must take their foreign funding disclosure requirements more seriously. For that to occur, federal agencies and elected officials must increase enforcement of these disclosure requirements and begin imposing penalties sufficient to deter future noncompliance.

Paul R. Moore is a former assistant U.S. attorney who served as chief investigative counsel at the U.S. Department of Education.

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