The Detroit News: Feds probe UM over foreign gift disclosures, 'indifference' to national security concerns

The U.S. Department of Education is investigating the University of Michigan for allegedly violating a federal disclosure law about foreign gifts after two Chinese researchers linked to the university were charged with smuggling biological materials into the country.

The Tuesday letter from federal education officials to UM interim President Domenico Grasso accused UM of "incomplete, inaccurate and untimely" disclosures of foreign gifts and contracts valued at $250,000 or more connected to Chinese research.

The letter from Paul R. Moore, chief investigative counsel and assistant general counsel at the U.S. Department of Education, said UM submitted foreign funding disclosures of $375 million since January 2021 and that more than 20% of those disclosures ― about $86 million ― were submitted in an untimely manner.

"Additionally, many of UM’s disclosure reports appear to include transactions in which the counterparty was erroneously identified by UM as nongovernmental," according to Moore's letter.

In a statement issued Tuesday evening, Colleen Mastony, assistant vice president for public affairs, said the university "is dedicated to advancing knowledge, solving challenging problems and improving nearly every facet of the human experience. Our research enterprise is united in this commitment to serving the people of Michigan and the world. 

"The University of Michigan takes its responsibility to comply with the law extremely seriously, and we will cooperate fully with federal investigators. We strongly condemn any actions that seek to cause harm, threaten national security or undermine the university’s critical public mission."

Moore wrote that UM reported $2.04 billion in fiscal year 2024, including $1.17 billion in federal research funding from grants and contracts from and with the U.S. departments of Defense, Energy, Transportation, the National Institutes of Health, the National Oceanic and Atmospheric Administration, the National Science Foundation and other federal agencies.

On June 2, federal agents arrested a University of Michigan scholar from China on charges she tried to smuggle a biological pathogen into the United States, characterized as a potential agricultural terrorism weapon that can be used for targeting food crops. On June 9, federal agents arrested a second UM scholar from China for smuggling biological material into the country.

In January — six months earlier — UM ended a two-decade-long joint institute with Shanghai Jiao Tong University in China that provided academic opportunities to hundreds of students following concerns about national security by GOP members of Congress.

"Announcement of the closure occurred subsequent to a letter to UM from Chairman John Moolenaar (U.S. House Select Committee on the Chinese Communist Party) which raised serious national security concerns related to China’s ability to use the joint institute to contribute to China’s 'most sensitive defense programs, including nuclear weapons, carrier rockets, satellites, nuclear submarines, and fighter jets,'" wrote Moore, referring to the Michigan Republican congressman.

"Through UM’s Center for Chinese Studies, UM continues to engage in substantial research collaborations with Tsinghua University, Peking University, Fudan University, and Zhejiang University — all universities deeply involved in China’s emerging science and technology research efforts directly linked to military programs."

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Federal officials are making an extensive records request from UM. They are seeking tax records from January 2020 to the present; international student, faculty, and research personnel agreements; and a copy of the university's procedures and administrative systems for complying with Section 117 disclosure requirements for the same period.

They are also seeking a full and complete list of all university research personnel and contract personnel, undergraduate and graduate, involved in bilateral or multilateral research collaborations with non-U.S. research institutions, including foreign government agencies, foreign educational institutions, foreign corporations, non-governmental foreign entities and foreign individuals.

Under the federal disclosure rules, a failure to provide timely and accurate reports may result in civil action by the U.S. Department of Justice, including the full reimbursement of the costs associated with the Department of Education's and Department of Justice's investigation and enforcement efforts.

U.S. Department of Education officials said in a Tuesday statement that the investigation into UM reflects the Trump administration’s efforts to "hold colleges and universities accountable for failing to comply with federal disclosure laws on foreign funding, consistent with President Trump’s Executive Order on Transparency Regarding Foreign Influence at American Universities."

U.S. Rep. John Moolenaar, the Caledonia Republican who chairs the House Select Committee on China, said Tuesday that foreign influence over universities must end.

“The Chinese Communist Party seeks to influence universities with funding through organizations and individuals," Moolenaar said in a statement. "Make no mistake, these sources tie back to China’s Communist government. This funding has no place on campus, and universities must end this foreign influence. Michigan should quickly disclose all foreign gifts and follow the law."

U.S. Rep. Tim Walberg, the Tipton Republican who chairs the House Committee on Education & Workforce, welcomed the Trump administration probe, contrasting it with inaction from "the Biden-Harris administration," and called for congressional action.

“As we have seen recently at the University of Michigan, foreign gifts and contracts serve as footholds for regimes like the CCP to infiltrate American universities and steal secrets or smuggle in pathogens," said Walberg in a Tuesday statement, referring to the Chinese Communist Party. "Billions of dollars in foreign funds are infiltrating our country undetected. These funds often come with strings attached and undermine our national interests.

"Congress also needs to do its part and pass legislation like the DETERRENT Act, which closes loopholes and bolsters transparency to protect American education from our most dangerous adversaries like the CCP.”

The measure would ban higher education institutions from entering into contracts with any foreign entity of concern, such as China or Russia, without obtaining a waiver; require certain institutions to report on gifts or contracts between faculty members and foreign entities; and mandate private institutions with endowments of over $6 billion or more than $250 million in specified investments to file annual investment disclosure reports, according to the Congressional Budget Office.

The House approved the legislation in a 241-169 vote on March 27. Seven Michigan Republicans and U.S. Rep. Hillary Scholten, D-Grand Rapids, voted in support, while the rest of the Michigan Democrats rejected the measure. U.S. Rep. Jack Bergman, R-Watersmeet, didn't vote.

To read the full article, please visit: https://www.detroitnews.com/story/news/politics/2025/07/15/feds-probe-university-michigan-foreign-gift-disclosures-indifference-national-security-concerns/85213945007/.