Under Pressure, Pentagon Restricts Program That Allows Colleges With CCP Outposts To Receive Taxpayer Funds

The Pentagon has placed restrictions on a policy that would have allowed American colleges to receive taxpayer funds while hosting Chinese spy outposts, a decision that follows a congressional pressure campaign and Washington Free Beacon report exposing the funding loophole.

The Defense Department, in an Aug. 15 letter, informed Congress that it has overhauled a waiver program that would have allowed American universities to rake in taxpayer cash while hosting Confucius Institutes, a Chinese Communist Party-backed program that Beijing uses to peddle influence and steal intellectual property from American universities.

Congress in 2021 barred the Pentagon from awarding research projects to any U.S. school that hosts a Confucius Institute, citing concerns the Communist regime would use these outposts to spy on sensitive military research. Chinese spies have infiltrated a number of American schools, with the Justice Department warning earlier in February that up to 60 top colleges are vulnerable to CCP espionage operations. But the Pentagon instituted a waiver program earlier this year to help schools skirt the federal ban, the Free Beacon reported.

Following a Republican pressure campaign, the Pentagon has decided to narrow the waiver program and close loopholes that would have allowed Confucius Institute employees to access information about Defense Department research projects. The Pentagon also disclosed that, after instituting these changes, not a single U.S. school applied for a waiver, though schools can apply at a later date.

"At present, the Department has not granted, nor does the Department expect to grant, any waivers" before the federal funding ban takes effect in October, the Pentagon informed Rep. Jim Banks (R., Ind.), who has been spearheading an investigation into the waiver program.

The Defense Department will also "terminate any existing contracts and grants to any" U.S. institution that hosts a Confucius Institute after the October deadline, according to the letter. The Pentagon says it retains the power to reassess waivers at any time for any reason.

Restrictions have also been placed on Confucius Institute employees. The employees will now have to report all foreign travel for a school to be eligible for the waiver program.

Confucius Institute employees, including those who are also employed by universities, will be restricted from accessing all information and data related to federal research projects under the revised guidance.

The Pentagon said in its letter to Banks that it originally "did not wish to interfere with the conduct of federally funded research by precluding [Confucius Institute] employees who are also employed by the host" school. It altered this carveout, however, "to avoid potential risk."

Lawmakers like Banks had been pressing for both reforms, warning that Confucius Institute employees could access sensitive research and funnel it to the Communist regime.

In an April letter to the Pentagon, Banks accused the Pentagon of "bowing to the wishes of academia and the scientific community to continue their deep ties with China, despite the growing threat of CCP propaganda and espionage."

Sen. Ted Cruz (R., Texas) warned in April that he would "revoke those waivers and hold accountable any officials who issue them" if the Pentagon moved forward with plans to allocate federal funds to any school that hosts a Confucius Institute.

The changes also follow an effort by congressional Republicans in both the House and Senate to cancel the waiver program due to the concerns outlined above.

Banks, in comments to the Free Beacon, lauded the Pentagon's revisions but said the 2023 National Defense Authorization Act should include provisions that would enact an outright ban on the waiver program.

"I'm glad that the Biden administration has agreed to close its multiple loopholes that leave universities vulnerable to Communist Party espionage," Banks said. "However, regardless of any DOD guidance, the final NDAA must eliminate DOD's Confucius Institute waivers entirely. Universities that cozy up to the Chinese Communist Party shouldn't be involved in defense research, period."

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