Ways and Means Committee Republican Congressman Greg Murphy, M.D. (NC-03) introduced the Protecting Endowments from our Adversaries Act (PEOAA) to pressure large university endowments to purge their investment portfolios of Chinese entities deemed a threat to U.S. national security.
- The bill calls for a 50 percent excise tax on such investments when they’re acquired, and a 100 percent tax on gains realized from such investments.
- The legislation would only apply to private colleges and universities with endowments worth more than $1 billion, of which there are approximately 80 in the United States.
Read the Fox News story HERE.
“These billion-dollar, tax-advantaged university endowments have a moral obligation to divest from companies that are detrimental to the safety and security of the United States,” said Rep. Murphy. “After reviewing the lackluster responses to my June 9th letter, it is clear that my bill is necessary to effect change. The fact is, at least 75 percent of the schools who responded to my letter have exposure to entities that have been deemed a risk to our nation’s security. That is completely unacceptable.”
“Schools argue that these investments are ‘not against the law’, however Harvard and several schools have a record of divesting from companies for a variety of reasons, including on the basis of Environmental Social Governance (ESG) causes,” Murphy concluded. “Unfortunately, it is clear that we must force their hand to take the same approach for compromising Chinese entities that are a known risk to U.S. national security.”
Original cosponsors include fellow Ways and Means members Reps. Brad Wenstrup (OH-02), Adrian Smith (NE-03), Lloyd Smucker (PA-11), and Darin LaHood (IL-18).
- Rep. Murphy sent identical letters to the 15 private colleges and universities with the largest endowments in the United States, including Harvard, Yale, and Duke urging them to divest from dangerous Chinese entities.
- 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.
CLICK HERE for the bill text.
CLICK HERE for a one-pager.