Rep. Greg Murphy presses to force universities to take endowment funds out of Chinese, other hostile companies
Congressman says tax exempt universities have moral obligation to not invest in companies deemed hostile to America
{{#rendered}} {{/rendered}}EXCLUSIVE: Rep. Greg Murphy is introducing a bill that would target private universities with massive endowments that have investments in companies associated with China and other hostile governments.
Murphy, R-N.C., is introducing the bill after last month sending letters to the 15 private universities with the largest endowments in the U.S.
Murphy asked them to look into their endowments' investments and aim to divest from businesses included on lists the government keeps of companies that pose security threats, like the Department of Commerce's "Entity List."
{{#rendered}} {{/rendered}}"After reviewing the lackluster responses to my June 9 letter, it is apparent that my bill is necessary to effect change. The responses I received from the universities are indicative of a very serious problem in higher education," Murphy told Fox News Digital.
Rep. Greg Murphy is introducing a bill to make private universities with endowments worth more than $1 billion divest from companies associated with hostile governments. (Bill Clark/CQ-Roll Call, Inc via Getty Images)
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"The fact is, at least 75% of the schools who responded have some exposure to entities that have been deemed a risk to our nation's security. That is completely unacceptable," he added. "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."
{{#rendered}} {{/rendered}}Murphy's bill would apply to private colleges and universities with endowments worth more than $1 billion, of which there are approximately 80 in the United States. It would impose a 50% excise tax on such investments when they're acquired, and a 100% tax on gains realized from such investments.
The congressman's initial letter was sent to the 15 private universities in the U.S. with the largest endowments. Those include Harvard, Yale, Stanford, Notre Dame and Duke.
The chairman of North Dakota's Legacy Fund denied that it was invested in the controversial Chinese firm Alibaba – until local news outlet KX News revealed that $20 million from the fund was invested in the company. (Qilai Shen/Bloomberg via Getty Images)
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{{#rendered}} {{/rendered}}Major U.S. funds, like endowments controlled by these universities, include complex and diverse investments, which sometimes make it difficult to identify what exactly funds are invested in, and hard to unwind those investments.
The state of North Dakota has an $8 billion Legacy Fund – a comparable size to many major college endowments – which was invested in the Chinese firm Alibaba until earlier this year, according to KX News. The former chairman of the legacy board denied that the fund invested at all in Alibaba, until KX News identified nearly $20 million invested in the firm. The North Dakota fund later unwound that investment.
Murphy says any complaint universities have about getting their investments out of hostile foreign countries for moral reasons is hypocritical, as some start to get out of the fossil fuel industry, citing climate change.
{{#rendered}} {{/rendered}}Harvard University has the largest endowment of any private college in the U.S. (Michael Fein/Bloomberg via Getty Images)
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"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 said. "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."
Murphy is joined by Reps. Brad Wenstrup, R-Ohio, Lloyd Smucker, R-Pa., and three others as original cosponsors on the bill.