China’s Moneybag Friends at Harvard University

Posted on August 17, 2017By Anders Corr

The hallow’d ivy’d walls

How to make friends and influence people

The level and sources of funding from China-linked tycoons and institutions for Harvard University is opaque and prodigious, and calls into question just how the dons at the US’s most prestigious educational institution handle the influence and remain unfettered academically and intellectually.

Harvard is not unique in being a soft but influential voice on China that has a conflict of interest because of China-linked money. The Confucius Institute program, which began in 2004 and is overseen by the Office of Chinese Language Council International, or Hanban, has been accused of buying influence in secondary schools, colleges and universities across the world, but particularly in the United States. Other organizations that are at least partially funded by China-linked money include Yale Law School’s China Center, Oxford University’s China Center, King’s College London School of Law, the Center for Strategic and International and Studies (CSIS), the Asia Society, the East-West Center, the National Committee on U.S.-China Relations, the Committee of 100, and the Institute for China-American Studies (ICAS).

Source: WSJ

The way in which China-linked money percolates through elite-level US policy discussions on China on both sides of the aisle, and in supposedly impartial think tanks and universities, should be a concern to all US citizens who depend on places like Harvard for unbiased political analysis and leadership. Whether or not China-linked money buys influence, the appearance of impropriety is damaging to US institutions, no more so than Harvard.

On August 10, the New York Times revealed that a company called JT Capital gave US$10 million in 2014 to Harvard. JT Capital is linked to one of China’s top defense contractors. This donation apparently funded academic fellowships for Chinese government officials, and was announced in Harvard’s Ash Center newsletter with a call for the US and other western governments to accommodate China’s rise and “legitimate strategic interests” while asking China to detail its vision for global governance. The US$10 million donation occurred the same year that the Ronnie Chan family (Chan is a dual US-Hong Kong citizen property developer with extensive business in mainland China) donated US$350 million to Harvard.

Harvard is not alone, by a long shot. This year, China’s $150 billion HNA Group reportedly had $18-billion of its shares donated by an anonymous Chinese citizen to a New York foundation, making that foundation the world’s second biggest after the Bill Gates Foundation. The donation could be a form of capital flight for some future use by corrupt leaders at the highest level of China’s government, including Xi Jinping and Wang Qishan. But in the meantime, it can also buy influence in the US from other foundations who may be eager to double or triple their own operations.

Other smaller, but still substantial donations by academic standards, have paved the way. Maurice Greenberg, a former CEO of AIG who does extensive business in China, gave $50 million to the “Greenberg-Yale China Initiative for collaboration with China”, as reported by the Committee of 100 Newsletter, itself funded by donations from China-linked sources. In 2012, Hong Kong luxury magnate Dickson Poon gave £20 million to Kings College London School of Law, which promptly renamed itself the Dickson Poon School of Law. It was the largest donation to King’s College London in its history.

Also in 2012, Poon gave £10 million to Oxford University for its China Center. According to one source, collaboration between Chinese and Oxford libraries around that time came with pressure from the Chinese side to hire Chinese librarians to manage the ancient collections of Chinese materials. I met graduate student sources at Oxford who said that teaching is biased in favor of China. Oxford students are reportedly subtly rewarded for taking positions in the middle on issues between China and the west, rather than staking out their own independent positions that could be seen as too ideological for supporting simple ideas like democracy and human rights. They feel pressed, instead, to ‘deconstruct’ a democracy that does not really exist or leads to low growth, or argue a ‘more sophisticated’ and ‘unbiased’ exploration of the ‘relativity of human rights regimes.’

“That would get you a good grade,” said one source. “You feel pressured to answer in a certain way.” This bias was a surprise to China expert and emeritus Professor Stein Ringen at Oxford, so it could be a relatively new phenomenon.

In 2014, Ronnie Chan gave US$20 million to the University of Southern California, to which he had donated extensively and been a trustee since 1995. In 2006, USC created the U.S.-China Institute.

“In May,” according to the memo announcing the institute, “the USC Board of Trustees visited China, making stops in Beijing, Shanghai, and Hong Kong.  During that trip, [USC] President Sample announced the creation of this institute on May 23, along with trustees Herb Klein and Ronnie Chan, both of whom will serve as advisers to the institute.”

China-linked donations to universities can be relatively opaque, including the sources of those funds. The donation of US$350 million to Harvard in 2014 by Ronnie Chan’s family foundation, the Morningside Foundation, appears from an analysis of its Form 990s to be staggered over six years. This was not announced when the donation was made public. Approximately US$60 million was paid by the foundation to Harvard in both 2014 and 2015. To reach US$350 million, the annual payments to Harvard would have to continue through 2019, which is future expected revenue that can prove a particularly strong form of influence.

In addition to donations from Morningside, donations to Morningside are listed on the forms 990. Donations to Morningside are being transferred at up to US$60 million a year, but sometimes in multiple US$8.5 million transfers, from what appears to be multiple shell companies associated with the British Virgin Islands, Monaco, and Bettendorf, Iowa. The donations to the Chan-controlled Morningside Foundation are mostly not being transferred from the Hang Lung Group in Hong Kong, which is the primary public face of the Chan family businesses. Hang Lung does extensive business not only in Hong Kong, but in mainland China.

US professors who are experts on US-China politics at Harvard know very well about the $350 million donation and the Chan family. They can and do give paid speeches in China, republish their works for additional royalties in China, and have all-expenses paid travel to China. These outside revenues for professors can be in the tens of thousands of dollars every year. But other China-linked sources of individual income can be even greater.  Academics and senior fellows at Harvard can network into well-paid leadership positions in think tanks and onto the boards of directors of corporations that do extensive business in China.

These are all potential avenues of influence upon academics who do not usually broadcast actual or potential pecuniary benefits. The fact that professors seek these benefits from China-linked sources could soften their public stance on China, or at least lead them to take a middling rather than principled position so as not to offend any past or potential revenue sources. Few relish biting the hand that feeds them. Broadcasting these benefits and influences could diminish the perception of their impartiality, so it is no wonder that they deemphasize such payments, and deny that the payments have any influence.

Harvard is particularly important for its outsized influence among the public, in part because of its sterling reputation for impartiality and excellence in research. While much good work is done at Harvard, the attention that Harvard gets for this research is perhaps unwarranted given the excellent research that is also done elsewhere. An analysis some years ago found that Harvard was mentioned in the New York Times, for example, more than all other universities combined. The amount of Harvard’s China-linked donations, relative to the amount of donations to other universities mentioned here, matches that influence.

Looking at the Harvard example, it appears that China could be seeking to use relatively small sums when considering the magnitude of US support to the university over the years, to introduce biases among professors that could leverage US policy or public opinion in China’s favor. I once observed a discussion at Harvard in which an eminent personage made a shockingly pro-China statement. I challenged him immediately afterwards on the sidelines of the event. He reversed his position and later explained to me that he takes a much more sanguine position on China in public than in private. I later confirmed with another source who knows the individual well, that he takes a tough position on China in private, but a positive view of China in public.

I have heard similar stories in other academic settings. Professors and analysts fear getting blacklisted as a “China basher.” China bashers are frequently denied entry visas by the Chinese government. That may be seen as a badge of honor for some principled academics, but it can interfere with the research that leads to publications and tenure, and ultimately make the academic’s secondary-source research irrelevant.

Such a label can also lose academics valuable consulting, speaking and publishing opportunities. Sadly, it can lose them respect from other China experts who are oriented towards the middling lucre of climbing in the China policy community, with that persistent and politically stabilizing hope of somehow making it to the big leagues through tenuous links to a network of elite levels of academics, business, and politics.

I believe that bias is introduced into US-China policy discussions because of the way in which China, and China-linked corporations and wealthy individuals who do business in China, selectively reward, with both minor and massive donations and contracts, the programs and individuals who are soft on China. Allowing such donations therefore biases policy discussion and does not appear to be in US national security interests. In the case of Harvard, it does not even appear to be necessary for research and teaching (Harvard already has an endowment of US$35.7 billion – might not the marginal effect of another research or teaching dollar be greater elsewhere?). Given that acceptance of China-linked donations is highly likely to introduce bias, at least into the China policy discussions, such donations arguably have a negative, rather than positive, effect on a Harvard education related to Chinese politics.

Perhaps Harvard should refuse these donations. Perhaps there should be legislation against China-linked money in US politics, including political campaigns, think tanks and universities. Do these China-linked donations violate US Foreign Agent Registration Act laws? Did the Ash Center newsletter violate FARA laws when it reported the US$10 million donation along with several pro-China political opinions? In addition, does Harvard provide valuable technology to China, for example health-related technology in exchange for the US$350 million donation that was supposedly meant solely for the Harvard School of Public Health? Do these technology transfers assist a Chinese economy that is being used to fuel Chinese military spending that threatens the US and our allies in Asia? What is the totality of the agreement between Harvard and the Morningside Foundation, and other China-linked financial sources, related to this and other donations? Has this US$350 million donation been scrutinized by the Committee on Foreign Influence in the US, and if CFIUS does not have that mandate, should it?

As a regular citizen I cannot know the answers to the questions raised here. Many of those who are close to these issues (for example, Harvard President Drew Faust, former Secretary of the Treasury Timothy Geithner, and Ronnie Chan) have not been as forthcoming as I would have liked with answers to my questions, or deny any political influence when confronted with what appears to be a pattern of Chinese pecuniary support to soft-on-China political voices and organizations. 

Given billions of dollars in US support for Harvard over the years, American taxpayers deserve more answers, increased transparency, and less bias. I hope we can get new legislation and better enforcement of existing legislation to increase such transparency at Harvard and beyond, where a regular citizen’s questions are not being answered. I hope that professors and universities forego receiving donations, fees and other valuable services or goods from foreign-linked sources that could lead to even the appearance of influence, impropriety, or the support of an undemocratic regime that has one of the world’s worst records of human rights abuse. Harvard’s motto is simply veritas, which is Latin for ‘truth.’ The most rigorous scholarship and the best values require sacrifice. We should expect more of that from our academics.