This bill mandates that certain large colleges and universities establish policies and public databases for faculty and staff to disclose financial ties, gifts, and contracts involving foreign sources, with strict enforcement and penalties for non-compliance.
John James
Representative
MI-10
The Disclose GIFT Act mandates that certain colleges and universities establish clear policies and public databases for faculty and staff to disclose financial ties, gifts, and contracts exceeding specified thresholds with foreign sources. Institutions must actively manage potential espionage risks associated with these foreign relationships. Failure to comply with these new disclosure and enforcement rules can result in significant financial penalties and potential loss of eligibility for federal student aid programs.
New 'Disclose GIFT Act' Forces Universities to Publicly Track Staff's Foreign Deals, Threatens to Cut Federal Student Aid
The new Disclose Getting Involved in Foreign Transactions Act (Disclose GIFT Act) is dropping a massive new compliance burden onto major research universities, and it comes with some serious consequences for non-compliance—like potentially losing access to federal student aid. This bill targets any university that receives over $50 million in federal research funds or participates in Title VI programs, aiming to force transparency around foreign financial influence.
Starting 90 days after this law goes into effect, these schools must require their staff and faculty to file annual reports. What needs reporting? Any gift from a foreign source above a "minimal value," and any contract worth $5,000 or more. The big kicker is that contracts with "countries of concern" must be reported regardless of value, and the full text of those contracts must be included. All this information then has to be posted in a public, searchable database on the university’s website for five years (SEC. 2).
The Fine Print: Who’s Under the Microscope?
This isn't just about university presidents. The reporting requirement applies to "covered individuals," which essentially means faculty, staff, and researchers involved in certain activities—a very broad group often defined by research security guidance. If you’re a professor collaborating internationally or a researcher getting a grant from a foreign foundation, you’re now on the hook for annual disclosure. For example, a professor receiving a $6,000 contract from a German company to consult on a new engineering design would have to report the contract details, and the university would have to post that publicly (SEC. 2).
The Enforcement Hammer: Fines and Financial Ruin
The enforcement section is where the rubber meets the road, and it’s pretty brutal. If the Department of Education suspects a school "knowingly or willfully" violated these rules, they must ask the Attorney General to file a civil lawsuit. If the court forces compliance, the school has to pay all the government’s investigation costs (SEC. 3).
But wait, there’s more: the fines are steep. A first offense carries a penalty of at least $250,000 or the total value of the unreported gifts/contracts, whichever is larger. Repeat offenders get hit with at least $500,000 or double the value of the unreported deals. The most severe consequence? If a school is forced into compliance via lawsuit three separate times, they become ineligible to participate in federal student aid programs for at least two years. That means no Pell Grants, no federal student loans—a financial death sentence for most major universities (SEC. 3).
The Real-World Impact: Chilling Effect on Collaboration
While the goal is to counter espionage and manage conflicts of interest, the practical outcome for researchers could be a significant "chilling effect." The bill requires institutions to create internal compliance officers and policies to certify adherence. Faculty and staff, already swamped, now face complex new reporting rules under threat of institutional sanction. If a university is worried about a $500,000 fine, they are going to push hard against any international collaboration that even smells risky.
Furthermore, the requirement to publicly post the details of contracts, especially those with "countries of concern," could expose sensitive research details or proprietary business dealings to competitors. Imagine a university research lab working on a cutting-edge material with an international partner; now, the full text of that contract is searchable online. This level of mandatory public disclosure might make international partners think twice before working with U.S. institutions, potentially slowing down critical scientific progress (SEC. 2).
This bill doesn't just ask for transparency; it demands compliance under threat of massive financial penalties, shifting the burden of national security oversight squarely onto the shoulders of university administrators and faculty.