Murphy Pressures University Endowments to Divest from Adversarial Chinese Entities Sanctioned by U.S. Government

Washington, D.C. – Yesterday, Congressman Greg Murphy, M.D. (NC-03) sent a letter to the 15 private colleges and universities with the largest endowments, including Harvard, Yale, and Duke, urging them to purge their investment portfolios of Chinese entities deemed a threat to U.S. national security. This letter comes after Rep. Murphy released draft text of his upcoming legislation, the Protecting Endowments from our Adversaries Act (PEOAA). Read more about the letter HERE as first reported by POLITICO.

In the letter, Rep. Murphy writes, "Endowments are now sophisticated institutional investors with diversified portfolios, investing in fixed income, global public equities, and alternatives. According to the National Association of College and University Business Officers (NACUBO), in FY21 the average overall return for endowments was 30.6 percent.^[1] These large returns are at least partly due to large endowments' ability to diversify their portfolios and take on more risk than average investors. Diversification is a bedrock principle for all investors, from institutional to retail. However, diversification for endowments should not mean investing in entities that are deemed an unacceptable risk to national security.

He continues,"Because colleges and universities have an educational mission and receive the significant benefit of tax-exempt status, they have a moral obligation not to use their endowments to invest in companies that contribute to human rights violations and are detrimental to the national security of the United States. Endowments must not invest in entities that are supporting the imprisonment of Uyghur Muslims or aiding the Russian Federation's horrific invasion of Ukraine." Read the full letter HERE.

Background: University endowments have a history of links to companies implicated in human rights abuses in China. BuzzFeed reported in 2019 that MIT, Duke, and Princeton invested endowment funds in a company linked to human rights abuses against Muslim Uyghurs in Xinjiang. There is precedent within these institutions to actively divest from entities that do not align with their values, including on environmental issues. Rep. Murphy argues that divesting from Chinese entities could be easily accomplished based on this precedent. In addition to the 15 aforementioned private schools who received the letter, Rep. Murphy also sent his letter to Davidson College and Wake Forest University – both of which would be subject to his PEOAA legislation with endowments over $1 billion.

Rep. Greg Murphy, M.D. (NC-03) is a member of the House Ways and Means Committee where he sits on the Oversight, Health, and Worker and Family Support Subcommittees.