Fifteen private colleges and universities with the largest endowments, including Harvard, Yale, and Duke, are being called on to purge their investment portfolios of Chinese entities deemed a threat to U.S. national security in a letter from Ways and Means Republican Rep. Greg Murphy (R-NC). The letter comes after Rep. Murphy released a draft text of his upcoming legislation, the Protecting Endowments from our Adversaries Act (PEOAA). Read more about the letter HERE as first reported by POLITICO.
Excerpts from the Letter:
- “Diversification is a bedrock principle for all investors, from institutional to retail. However, diversification for endowments should not mean investing in entities that are deemed an unacceptable risk to national security.”
- “Because colleges and universities have an educational mission and receive the significant benefit of tax-exempt status, they have a moral obligation not to use their endowments to invest in companies that contribute to human rights violations and are detrimental to the national security of the United States.”
- “Endowments must not invest in entities that are supporting the imprisonment of Uyghur Muslims or aiding the Russian Federation’s horrific invasion of Ukraine.”
CLICK HERE to read the letter.
As reported by POLITICO:
- “Rep. Greg Murphy (R-N.C.) is drafting legislation — the Protecting Endowments from Our Adversaries Act — designed to cut U.S. university endowment investments that fund abusive or hostile Chinese entities.”
- “On Thursday, Murphy sent a letter to the 15 private universities with the largest endowments — Harvard, Yale, Duke and the Massachusetts Institute of Technology, among them — asking them to purge their investment portfolios of ‘entities that are supporting the imprisonment of Uyghur Muslims or aiding the Russian Federation’s horrific invasion of Ukraine.’ Murphy also wants those schools to vet their endowment portfolios for any ‘adversarial entities’ named on U.S. government sanction lists.”
- “The value of U.S. university endowments totaled more than $800 billion in 2021. The endowments of the 15 private schools Murphy is targeting with legislation he’ll introduce in coming weeks have an estimated combined value of $331 billion.”
- “That legislation would ‘disincentivize’ university endowments from investments in firms listed on U.S. government sanction lists, including the Commerce Department’s Entity List, which targets individuals and companies implicated in any ‘activities sanctioned by the State Department and activities contrary to U.S. national security and or foreign policy interests.’ The bill calls for a 50 percent excise tax on the principal and a 100 percent excise tax on any realized profits from investments in such entities.”
CLICK HERE to read more from POLITICO.
Background: University endowments have a history of links to companies implicated in human rights abuses in China.
- BuzzFeed reported in 2019 that MIT, Duke, and Princeton invested endowment funds in a company linked to human rights abuses against Muslim Uyghurs in Xinjiang.
- There is precedent within these institutions to actively divest from entities that do not align with their values, or for a variety of purposes, including on environmental issues.
- In addition to the 15 private schools who received the letter, Rep. Murphy also sent his letter to Davidson College and Wake Forest University – both of which would be subject to his PEOAA legislation with endowments over $1 billion.