May 20, 2021 - Politics & Policy

Scoop: Committee beef scuttles China higher-ed scrutiny

Illustration of a United States quarter puzzle piece and a Chinese Yuan puzzle piece

Illustration: Eniola Odetunde/Axios

A dispute between two powerful Senate committees effectively scuttled an effort to step up federal scrutiny of foreign donations to U.S. research universities, Axios has learned.

Why it matters: Chinese influence in higher education has fueled espionage and human rights concerns. But an effort to address it within a sprawling Senate package of measures designed to boost U.S. competitiveness against China sparked a jurisdictional spat that spiked the legislative language.

What's happening: The version of the United States Innovation and Competition Act the Senate took up this week explicitly bars the Committee on Foreign Investment in the United States (CFIUS) from monitoring large foreign gifts to U.S. universities.

  • Despite that prohibition, the legislation includes a measure passed out of the Senate Foreign Relations Committee authorizing that work by CFIUS, an interagency body chaired by the Treasury secretary that vets foreign investments for potential national security concerns.
  • The bill, though, was amended Tuesday with additional language explicitly prohibiting CFIUS from performing that work or appropriating federal funds for that purpose.
  • While both provisions remain in the overarching bill released by the office of Senate Majority Leader Chuck Schumer (D-N.Y.), the most recent language barring that CFIUS authority appears to be the operative provision.

The big picture: The original CFIUS language was championed by Sen. Jim Risch (R-Idaho), the top Republican on Foreign Relations.

  • It was designed to address concerns that the Chinese government, in particular, uses its influence at large research institutions to monitor or steal U.S. technology, develop tech to repress Chinese Muslim minorities and seed ideologically aligned campus groups.
  • In a statement to Axios, Risch called the measure "a small investment, given the large cost of the (legislation), to protect our ideas, research and intellectual property before it’s too late, which is often the case.”

Between the lines: Three sources with knowledge of the situation told Axios the change in language was the result of a dispute between the Foreign Relations and Senate Banking committees.

  • "The provision is designed effectively to nullify the (Foreign Relations) CFIUS provision, because we believe, along with CFIUS, that it is completely unworkable," one of the sources said. "CFIUS is not designed, staffed or structured to assess potentially tens of thousands of university gifts."
  • The two other sources said the dispute also had to do with jurisdictional turf.
  • CFIUS falls under Banking's purview, and the sources, who requested anonymity to candidly discuss the matter, said Sens. Sherrod Brown (D-Ohio) and Pat Toomey (R-Pa.), the committee's top members, felt they weren't adequately consulted.

Yes, but: The legislative package does include language that would require universities to disclose large foreign gifts.

  • It also contains provisions designed to safeguard research by U.S. labs and agencies from foreign theft and espionage.
  • CFIUS's role in the process, though, appears to have been excised.
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