UC Berkeley Failed To Disclose $220 Million Deal That Benefitted Sanctioned Chinese Companies: REPORT

Editor’s note: This piece has been updated to include comments from the University of California, Berkeley.

A California university allegedly did not report hundreds of millions of dollars in funding from the Chinese government that was used to launch a joint research campus in China, according to The Daily Beast.

Between 2014 and 2018, the University of California at Berkeley allegedly received a $240 million investment from the Chinese government and Tsinghua University — which has been called “China’s MIT” — to launch a joint research facility in Shenzhen, China, known as the Tsinghua-Berkeley Shenzhen Institute (TBSI), a Daily Beast investigation reported Monday. However, Berkeley allegedly never formally disclosed any of the foreign investment to the U.S. government prior to being notified of the investigation, according to the report, which Berkeley disputes. (RELATED: University Housing Biden Center Took Funds From Firm Controlled By China’s ‘Supreme Organ Of State Power,’ Docs Show)

In 2018, Berkeley allegedly struck a $220 million deal with the Shenzhen government to construct an approximately 1.7 million-square-foot research campus in China, according to the report. Despite this, Berkeley has allegedly never reported the $220 million Shenzhen campus deal to the U.S. government, claiming that facilities are still under construction, according to The Daily Beast.

However, Dan Mogulof, assistant vice chancellor of Berkeley, told the Daily Caller News Foundation by email that although the university does have an agreement with Tsinghua, it “did not receive and has not benefitted from any $220m investment made by the Shenzhen government, or any other entity in China,” and characterized The Daily Beast’s report as “rife with serious, demonstrable errors.”

The Daily Beast’s report claims that the TBSI venture began in 2014 when the Shenzhen government promised to provide Berkeley with $52 million to begin the project. More than half of the $52 million was allegedly earmarked to buy equipment in China “effectively adding facilities and equipment to Berkeley’s research capacity,” according to a 2015 Berkeley document The Daily Beast claims to have obtained.

Shenzhen’s mayor at the time allegedly attended the ceremony launching the TBSI project, which Tsinghua’s president purportedly characterized as a “university-government-industry partnership,” according to the report.

In 2016, Tsinghua then allegedly injected a $19 million investment into the TBSI venture, according to The Daily Beast.

“Berkeley did sign a Master Affiliation Agreement in 2016 with Tsinghua University that arranged for $22M in sponsored research ($19M) and startup operations ($3M) funding in 2015-16,” Mogulof told the DCNF.

Behind the scenes, the $19 million Tsinghua grant was allegedly sponsored by Shenzhen Waranty Asset Management, a state-owned enterprise, according to The Daily Beast. In exchange for its financial support, the state-owned company would reportedly receive “priority commercialization rights” to negotiate a license for intellectual property resulting from its $19 million investment.

However, Mogulof told the DCNF that “Berkeley does not do proprietary research for anyone” and “has not licensed intellectual property” from TBSI “to any Chinese entity.”

In addition to Shenzhen Waranty Asset Management, The Daily Beast claims that dozens of Chinese companies have supported and advised the TBSI venture, including tech firms that the U.S. government has sanctioned, such as Huawei, ZTE and DJI.

Furthermore, The Daily Beast reported that Berkeley never disclosed the $19 million Tsinghua contract to the U.S. government, claiming that the Department of Education lacked clear reporting requirements at the time the deal was struck.

Mogulof told the DCNF that “as per reporting norms in place at that time, UC Berkeley did not report the $19M sponsored research agreement,” but has “reported all international funding in accordance with updated Department of Education guidelines.”

The Daily Beast also reported that a Berkeley spokesperson originally told the outlet that the university “does not have any ownership of property at Tsinghua, therefore, is not required to report investments made in, or for, the Tsinghua University campus,” before the spokesperson allegedly later stated that “the provision of a facility and/or equipment could qualify as an in-kind contribution and thus require disclosure.”

Universities have a “reporting obligation” to the U.S. government “within six months” of when they sign a foreign contract, experts told The Daily Beast.

In January 2022, Berkeley also allegedly neglected to disclose the renewal of its agreement with TBSI to the U.S. government, which a Berkeley spokesperson claimed was due to “an issue in the query pulling the data,” according to The Daily Beast.

Berkeley only reported the agreement renewal to the U.S. government after The Daily Beast reached out for comment in February 2023, according to The Daily Beast.

Berkeley also allegedly allowed Chinese officials tied to TBSI — including party officials and the vice mayor of Shenzhen — to privately tour their U.S. semiconductor facilities at the Marvell nanofabrication laboratory, with one Chinese press release concerning a lab tour stating that the visitors wished to “build a better lab abroad,” according to The Daily Beast.

Mogulof told the DCNF that Berkeley “takes the matter of undue foreign government influence seriously” and has “taken steps at different points throughout our 7-year relationship with Tsinghua University to ensure that the TBSI collaboration adheres to the university’s principles of fundamental research, compliance and transparency, as well as relevant policies and laws.”

The Daily Beast did not respond immediately to the DCNF’s request for comment.

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