U.S. Department of Education Investigates University of Pennsylvania for Foreign Funding Disclosure Violations

PHILADELPHIA — The U.S. Department of Education's Office of the General Counsel has launched a formal investigation into the University of Pennsylvania, citing inaccurate and untimely disclosures of foreign gifts and contracts. The probe, announced Thursday, follows a review of the university's foreign funding reports, which revealed noncompliance with Section 117 of the Higher Education Act of 1965.

Section 117 mandates that colleges and universities receiving federal financial aid report foreign gifts and contracts valued at $250,000 or more annually. The law, enacted to safeguard national security and academic integrity, requires semiannual disclosures by January 31 and July 31. Noncompliance can lead to Department of Justice enforcement actions or loss of federal funding eligibility.

"UPenn has a troubling Section 117 compliance history, having failed to disclose any foreign funding until February of 2019 despite a decades-long statutory obligation to do so," said Acting General Counsel Tom Wheeler. "Although the previous Administration degraded the Department's enforcement of universities' legal obligations to disclose foreign gifts and contracts, the Trump Administration will vigorously uphold the law and ensure universities are transparent with their foreign gifts and investments."

The Education Department has requested extensive records from UPenn, due within 30 days, to verify compliance. These include tax records, written agreements with foreign entities, and details of international research collaborations since January 1, 2017. The department also seeks information on university personnel overseeing foreign student visas, talent recruitment programs, and export control regulations.

UPenn's history of nondisclosure has raised concerns about foreign influence on U.S. campuses. Wheeler emphasized the investigation's broader implications, stating, "OGC will investigate this matter thoroughly, ensuring that universities cannot conceal the infiltration of our nation's campuses by foreign governments and other foreign interests. The American people and Congress have a right to know the impact of foreign funding on our universities, including some of our critically important research universities."

The investigation follows similar actions against Harvard University and the University of California, Berkeley, where reviews uncovered incomplete foreign funding reports. The Education Department's renewed focus on Section 117 enforcement signals a broader push to monitor foreign influence in higher education.

UPenn officials have not publicly commented on the investigation. The university is expected to cooperate fully, as Wheeler noted, "We hope the University of Pennsylvania will be cooperative and forthcoming in response to this investigation."

The probe underscores growing federal scrutiny of foreign funding in U.S. universities, particularly at research institutions like UPenn. As the investigation unfolds, it may prompt other institutions to reassess their compliance with federal disclosure requirements.