Rep. Murphy introduces bill urging universities to divest from China
The bill, dubbed the 'Protecting Endowments from our Adversaries Act,' would impose additional taxes on investments accumulated through partnerships with Chinese entities.
The bill pertains to private universities and colleges with an endowment greater than $1 billion.
North Carolina Congressman Greg Murphy recently introduced a bill that would pressure private colleges and universities to refuse endowments from Chinese-owned companies posing a threat to America’s national security.
The bill, dubbed the "Protecting Endowments from our Adversaries Act" (PEOAA), would impose additional taxes on investments accumulated through partnerships with Chinese entities.
“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,” Murphy said in a July 21 press release.
The bill pertains to private universities and colleges with an endowment greater than $1 billion. Schools that refuse to cut ties will pay “a 50% excise tax on such investments when they're acquired, and a 100% tax on gains realized from such investments.”
Fox News reports that approximately 80 campuses fit this $1 billion endowment criteria.
Murphy sent individual letters to 15 private colleges and universities in early June that implored administrators to examine their endowments and cut ties with adversarial companies that “contribute to human rights violations and are detrimental to the national security of the United States.”
According to the Congressman's press release, the 15 institutions he wrote letters to hold the largest endowments in the United States, including Harvard University, Yale University, and Duke University.
While the responses were reportedly “lackluster,” Murphy stated that 75% of the responding schools have connections with Chinese-based companies.
“Schools argue that these investments are 'not against the law,’ however, Harvard and several schools have a record of divesting from companies for multiple reasons, based on Environmental Social Governance (ESG) causes,” he 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.”
Representatives Brad Wenstrup (OH-R), Adrian Smith (NE-R), Lloyd Smucker (PA-R), Darin LaHood (IL-R), and Neal Dunn (FL-R) cosponsored the legislation.
“When these institutions refuse to voluntarily disclose and divest from China, it is incumbent Congress act. I appreciate Dr. Murphy’s leadership on this issue and am glad to cosponsor this important bill,” Smith told Campus Reform.
Additionally, Smucker claimed to be “proud” to join Ways & Means Committee colleagues to support the “critical piece of legislation.”
“Rep. Smucker believes university endowments shouldn’t be investing in entities controlled by China, who presently poses one of the greatest threats to our national security,” Eric Reath, Smucker’s press secretary, told Campus Reform.
Campus Reform contacted each lawmaker for comment and will update accordingly.
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