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GOP Congressman Takes Aim at Harvard’s Potential Endowment Links to Chinese Companies

The Harvard Management Company manages Harvard's endowment and related financial holdings.
The Harvard Management Company manages Harvard's endowment and related financial holdings. By Steve S. Li
By Eric Yan, Crimson Staff Writer

U.S. Representative Gregory F. Murphy (R-N.C.) called on Harvard to disclose and divest its endowment from any potential holdings in Chinese companies deemed a threat to national security by the federal government in a letter to the school last week.

Murphy asked Harvard to reveal whether its $53.2 billion endowment holds any investments in companies that appear on federal government sanction lists, which target entities that act “contrary to the national security interests or foreign policy of the United States.” He also asked the school to disclose any policies restricting investments in sanctioned companies, as well as whether the endowment has divested from such holdings in 2022.

Murphy requested a response from the University by June 23.

University spokesperson Jason A. Newton confirmed that Harvard received Murphy’s letter, but declined to comment further.

The letter comes as top American universities face increased scrutiny from the federal government over their ties to China. The U.S. Department of Education opened an investigation into Harvard’s foreign funding in early 2020. Separately, Harvard and other schools are currently lobbying against legislation that would impose more stringent disclosure requirements for American institutions that receive foreign funding.

Murphy sent similar letters to the 15 private universities with the largest endowments in the country. In his letter, addressed to University President Lawrence S. Bacow, he wrote that endowments “are now sophisticated institutional investors,” citing the high returns universities enjoyed last fiscal year. Harvard Management Company, which controls the University’s endowment, reported a 33.6 percent return on its investments in fiscal year 2021.

“These large returns are at least partly due to large endowments’ ability to diversify their portfolios and take on more risk than average investors,” he wrote. “However, diversification for endowments should not mean investing in entities that are deemed an unacceptable risk to national security.”

The letter cites a 2019 report in BuzzFeed News, which found that many of the country’s largest endowments — including those of Princeton, Duke, and MIT — are indirectly invested in companies tied to China’s detainment and surveillance of Uyghur Muslims. The report did not single out Harvard for holding such investments.

Murphy wrote that higher education institutions have a “moral obligation” not to invest in companies that “contribute to human rights violations and are detrimental to the national security of the United States,” due to tax benefits university endowments receive from the government.

“Endowments must not invest in entities that are supporting the imprisonment of Uyghur Muslims or aiding the Russian Federation’s horrific invasion of Ukraine,” he wrote.

Harvard said in March that it does not possess direct investments or any “material indirect holdings” in Russian companies.

In April, Bloomberg reported that Harvard is considering cutting back on investments in China due to risks associated with the increasing turbulence in the country’s domestic market, as well as heightened tensions between the U.S. and Asia’s largest economy. (HMC spokesperson Patrick S. McKiernan declined to comment on the report at the time.)

In an interview with POLITICO, Murphy said recent movements by universities to divest from fossil fuels provide “precedent” for endowments to divest from other companies. Harvard announced last September that it would allow its remaining investments in the fossil fuel industry to expire.

“If they tell their investment company ‘we want to divest out of companies in China,’ it’s very easily done,” Murphy said.

—Staff writer Eric Yan can be reached at eric.yan@thecrimson.com.

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EndowmentUniversity FinancesHarvard Management Co