Open Research, Foreign Finance, and a University’s Mission – JD Supra

This past month, the U.S. Senate debated a provision in the Innovation and Competition Act that would require the Committee on Foreign Investment in the United States (CFIUS) to review any proposed gifts and contracts of $1 million or more to U.S. research institutions from a foreign source. That would mean that the U.S. government would have a new level of oversight of such gifts, be required to investigate the ultimate source of the funds, and be able to impose mitigation measures on or prohibit such gifts.

The Committee on Foreign Investment in the United States is an inter-agency committee of nine U.S. agencies that has jurisdiction to review any transaction that may result in foreign control of a U.S. company, and many non-controlling investments by foreign persons in U.S. businesses. Typically, CFIUS reviews transactions that may affect U.S. national security. To date, CFIUS has not been tasked with or appeared interested in investigating gifts to universities.

An Eye on China

Nevertheless, Senator Jim Risch (R-Idaho), who serves on the Foreign Relations Committee, stated that the provision was designed to address concerns that the Chinese government uses its influence at large research institutions to monitor or steal U.S. technology.

The provision ultimately was scrapped as unworkable, but the Act still contains provisions designed to safeguard research by U.S. labs and agencies from foreign theft and espionage. Further, it is a bipartisan sentiment that China is an adversary of the United States in a battle for technological dominance. For that reason, it is likely that the disclosure of gifts from foreign persons will get scrutiny from the press and from the U.S. government, if not specifically from CFIUS.

As we analyzed here, current law gives the U.S. Department of Education oversight on foreign gifts and foreign ownership of U.S. institutions of higher learning. And as discussed here, the Department has used that power to investigate multiple U.S. university programs associated with China.

Maintaining a University Mission

The mission of a university, particularly those dedicated to research, often focuses on advancing knowledge, discovering the future, and collaborating openly and globally. However, in the United States and around the world, governments are imposing regulations to put up boundaries in the borderless world of research and technology – from investment review to export controls to restrictions on IT products and service sourcing.

It would seem strange for a university to declare its mission as unlocking new technology only for use in the United States, because such limitations are anathema to an open spirit of learning. For that reason, university compliance departments will need to consider how they can maintain the values of their institution, as expressed in the university’s mission, while they institute policies to comply with regulations that are trending toward the protection and segregation of knowledge.

There is a tension between those two goals, but they are not mutually exclusive. Our Organizational Integrity Group works with dozens of universities all facing this same shift in the controls on the movement of, and access to, technology. The solutions are necessarily tailored to the goals and visions of each institution, but maintaining focus on the core values of the institution remains critical even as the university navigates new restrictions and requirements.