U.S. fines Stanford $2M for failing to disclose foreign research funds

Stanford University in Palo Alto, Calif., has agreed to pay a nearly $2 million over allegations that it failed to disclose professors' connections to foreign funds when applying for U.S. grants. File Photo by Terry Schmitt/UPI

Oct. 2 (UPI) -- Stanford University has agreed to pay nearly $2 million to resolve allegations that it submitted research proposals to federal agencies, including the military, without disclosing that faculty members were receiving funding from foreign sources, including China.

The $1.9 million settlement dated Thursday but announced by the Justice Department on Monday only resolves allegations and does not determine liability, federal prosecutors said.

"Protecting research and development programs funded by taxpayer dollars is a top priority for us," Acting Assistant Inspector General for Investigations Michael Graham of the NASA Office of Inspector General said in a statement.

"The settlement agreement with Stanford University is the result of a joint effort to guard against fraud, waste and abuse in government grants."

A Stanford University spokesperson told UPI in a statement that it is "pleased" this issue has been resolved and that it is committed to ensuring its researchers meet federal compliance responsibilities.

"Stanford takes seriously the threat of foreign governments seeking to undermine U.S. national security," the spokesperson said.

The settlement follows Justice Department allegations that the famed Palo Alto, Calif., university violated the False Claims Act by submitting 16 grant proposals to the Army, Navy, NASA and the National Science Foundation between 2015 and 2020 that failed to disclose that 11 Stanford investigators on those projects had received or were to receive money from foreign sources.

Prosecutors detailed Stanford's failure to disclose that at least one of the faculty members was receiving funds from Fudan University, a Chinese public university in Shanghai. That same professor had also been awarded a grant from the National Natural Science Foundation of China, which was also not disclosed to U.S. National Science Foundation nor to the involved military departments.

Of the $1.9 million fine, $1.3 million is restitution and is to be paid no later than 15 days from the date the agreement was inked.

As part of the agreement, Stanford said it will work with the National Science Foundation Office of the Chief of Research Security Strategy and Policy on implementing best practices that have been identified by the U.S. government.

"Complete and accurate disclosures by principal investigators and universities of current and pending support are essential to federal agencies that make decisions on awarding federal grants," U.S. Attorney Erek Barron for the District of Maryland said in a statement.

"Those individuals and universities that knowingly fail to do so skew the grant awarding process in their favor and will be held accountable."

The Stanford University spokesperson told UPI that its research security policies have evolved since the first alleged transgression occurred to match federal guidelines, while upholding its "core values of academic freedom, global engagement and openness."

"We treat compliance matters as a high priority and will continue working with the National Science Foundation and other federal funding agencies on best practices in this area," the spokesperson said.