The U.S. Department of Education is investigating the University of Michigan for allegedly violating a federal disclosure law about foreign gifts after two Chinese researchers linked to the university were charged with smuggling biological materials into the country.

The Tuesday letter from federal education officials to UM interim President Domenico Grasso accused UM of "incomplete, inaccurate and untimely" disclosures of foreign gifts and contracts valued at $250,000 or more connected to Chinese research.

The letter from Paul R. Moore, chief investigative counsel and assistant general counsel at the U.S. Department of Education, said UM has submitted foreign funding disclosures of $375 million since January 2021 and that more than 20% of those disclosures ― about $86 million ― were submitted in an untimely manner.

"Additionally, many of UM’s disclosure reports appear to include transactions in which the counterparty was erroneously identified by UM as nongovernmental," according to Moore's letter.

Moore wrote that UM reported $2.04 billion in fiscal year 2024, including $1.17 billion in federal research funding from grants and contracts from and with the U.S. departments of Defense, Energy, Transportation, the National Institutes of Health, the National Oceanic and Atmospheric Administration, the National Science Foundation, and other federal agencies.

On June 2, federal agents arrested a University of Michigan scholar from China on charges she tried to smuggle a biological pathogen into the United States characterized as a potential agricultural terrorism weapon that can be used for targeting food crops. On June 9, federal agents arrested a second University of Michigan scholar from China for smuggling biological material into the United States.

In January — six months earlier — UM ended a two-decade-long joint institute with Shanghai Jiao Tong University in China that provided global academic opportunities to hundreds of students following concerns about national security by GOP members of Congress.

"Announcement of the closure occurred subsequent to a letter to UM from Chairman John Moolenaar (U.S. House Select Committee on the Chinese Communist Party) which raised serious national security concerns related to China’s ability to use the joint institute to contribute to China’s 'most sensitive defense programs, including nuclear weapons, carrier rockets, satellites, nuclear submarines, and fighter jets,' Moore wrote, referring to the Michigan Republican congressman.

"Through UM’s Center for Chinese Studies, UM continues to engage in substantial research collaborations with Tsinghua University, Peking University, Fudan University, and Zhejiang University — all universities deeply involved in China’s emerging science and technology research efforts directly linked to military programs."

On June 10, following the Department of Justice's criminal complaints involving UM-affiliated research personnel, interim UM Vice President for Research and Innovation Don Jordan reminded UM research personnel that the university "takes seriously its duty and responsibility to comply with all applicable laws and policies," including compliance with federal regulations, according to Moore's letter.

"Unfortunately, other prominent UM officials have downplayed the vulnerability of research developed at its joint institutes with Chinese research universities," Moore wrote.

In a December 2022 meeting with the FBI director, Ann Chih Lin, the director of UM’s Center for Chinese Studies, accused the FBI of “overstat(ing)” the threat of technology transfers to China in academic settings, the Department of Education letter said. Lin repeatedly disputed that the Chinese government is engaged in an effort to obtain technology from the U.S., including emerging technologies developed at federally funded research universities, Moore wrote.

In the center’s 2022-23 annual report, Moore said Lin published an account of her rebuke to the FBI director of the FBI’s “overstated” national security concerns and her attempts to force the FBI to acknowledge that it had unwarranted concerns with the vulnerability of university research to China.

"Considering DOJ’s recent criminal charges brought against UM-affiliated researchers, Lin’s assertions appear to be ill-conceived," Moore wrote. "Lin’s apparent indifference to the national security concerns of the largest single source of funding for UM’s annual research expenditures — the American taxpayer — is particularly unsettling. Contrasted with Vice President Jordan’s recent letter to UM research personnel unequivocally affirming UM’s federal compliance obligations, Lin’s remarks also indicate a troubling difference in opinion among senior UM administrative personnel for UM’s compliance obligations."

Federal officials are making an extensive records request from UM. They are seeking tax records; international student, faculty, and research personnel agreements; and a full and complete list of all university research personnel and contract personnel, undergraduate and graduate, involved in bilateral or multilateral research collaborations with non-U.S. research institutions including foreign government agencies, foreign educational institutions, foreign corporations, non-governmental foreign entities, and foreign individuals.

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