Accounting
Harvard intensifies funding fight with Trump administration
Harvard University sued several U.S. agencies and top officials for freezing billions of dollars in federal funding, significantly ratcheting up a high-stakes showdown with the Trump administration.
The government unlawfully suspended Harvard’s funding after it refused to comply with “unconstitutional demands” to overhaul governance, discipline and hiring policies, as well as diversity programs, lawyers for the university argued in a
“Over the course of the past week, the federal government has taken several actions following Harvard’s refusal to comply with its illegal demands,” the university’s president Alan Garber said. “We filed a lawsuit to halt the funding freeze because it is unlawful and beyond the government’s authority.”
In a statement on the university’s website, Garber cited the government’s pause in federal funding, threats to block an additional $1.1 billion in grants, a crackdown on foreign students, and the possible revocation of Harvard’s tax-exempt status.
The White House is pushing for sweeping changes at the most elite U.S. universities, and has frozen or is reviewing federal funding to Princeton, Cornell, Northwestern and Columbia universities. At Harvard, the government halted $2.2 billion of multiyear grants on April 14, claiming the school failed to enforce civil rights laws to protect Jewish students.
Harvard’s lawsuit claims that the funding freeze violates its First Amendment guarantee of free speech and the Administrative Procedures Act. It asks a judge to bar the U.S. from freezing the funding and declare the government’s actions unconstitutional.
“The government has not — and cannot — identify any rational connection between antisemitism concerns and the medical, scientific, technological, and other research it has frozen that aims to save American lives, foster American success, preserve American security, and maintain America’s position as a global leader in innovation,” the lawsuit claims.
The White House and the Education Department didn’t immediately respond to a request for comment.
Education Secretary Linda McMahon on Tuesday morning emphasized that the government’s actions were designed to protect students’ civil rights rather than infringe on universities’ free speech. She said she hopes Harvard comes back to the table, signaling there may be a path to deescalating the situation.
“We remain open to talking to Harvard, but they responded by filing a lawsuit,” McMahon said in an interview on CNBC.
Trump escalated his fight with Harvard after the school refused to bow to his administration’s demands. Since threatening its funding, Trump suggested the Internal Revenue Service should tax the university as a “political entity,” a move that would significantly hit the school’s finances and make it harder to raise money from wealthy donors.
Government demands
The showdown began last month when the government threatened about $9 billion in federal funding to Harvard. Days later, the administration demanded that Harvard remake its governance, transform admissions and faculty hiring, stop admitting international students hostile to US values and enforce viewpoint diversity.
The government also called for scrapping any hiring preferences based on race or national origin, adopting a broad ban on masks and adding oversight for “biased programs that fuel antisemitism.”
Harvard rejected those demands on April 14, saying it “will not surrender its independence or relinquish its constitutional rights” and that a private university “cannot allow itself to be taken over” by the U.S. government.
McMahon said on CNBC that the demand letter to Harvard was a “point of negotiation” and that she had hoped the university would “come back to the table.”
As part of its legal team, Harvard has hired two conservative lawyers with connections to the Trump administration — William Burck and Robert Hur. Harvard also tapped a lobbying firm, Ballard Partners, where Trump’s chief of staff used to be a partner. The school also named John Manning, a
“The government has only ratcheted up cuts to funding, investigations and threats that will hurt students from every state in the country and around the world, as well as research that improves the lives of millions of Americans,” the complaint claims.
The school has a $53 billion endowment but that money is restricted in how it can be spent, meaning the university relies on federal funding. Without that support, the school said in its complaint, it will be forced to either reduce or halt ongoing research projects and terminate employment contracts with researchers, staff and administrators, or make other cuts to departments or programs.
Campuses across the U.S. were roiled by protests after Hamas, which the U.S. considers a terrorist organization, murdered 1,200 Israelis and took more than 200 hostages in October 2023. Israel’s retaliation against Hamas in Gaza has killed more than 48,000 Palestinians, according to the Hamas-run health ministry.
Other university leaders, including Princeton’s, have expressed support for Harvard’s stance, but they also face pressure from the White House. The administration has already canceled $400 million in federal money to Columbia University and frozen dozens of research contracts at Princeton, Cornell and Northwestern universities.
“All told, the tradeoff put to Harvard and other universities is clear: allow the government to micromanage your academic institution or jeopardize the institution’s ability to pursue medical breakthroughs, scientific discoveries and innovative solutions,” Harvard argued in its lawsuit.
Presidents of some of the most prestigious universities and small colleges signed a joint letter opposing “undue government intrusion in the lives of those who learn, live, and work on our campuses,” according to a
“As leaders of America’s colleges, universities and scholarly societies, we speak with one voice against the unprecedented government overreach and political interference now endangering American higher education,” according to the letter, signed by leaders of schools including Princeton, Amherst College and the Massachusetts Institute of Technology.
Harvard named several cabinet secretaries as defendants in the lawsuit, including Robert F. Kennedy Jr., whose agency, Health and Human Services, funds the most research, as well as other agencies including the Department of Defense and the National Aeronautics and Space Administration.
The case is President and Fellows of Harvard College v. U.S. Department of Health and Human Services et al, 25-cv-11048, U.S. District Court, District of Massachusetts (Boston).
The Public Company Accounting Oversight Board sanctioned Adeptus Partners and its partner Howard Krant for violations related to supervision, review and quality control.
Krant and the firm violated PCAOB rules and standards in connection with the audits of two issuers: Blockchain of Things and Applied UV.
“Substandard audit work and inadequate quality control put investors at risk,” PCAOB Chair Erica Williams said in a statement. ”When violations like these occur, the PCAOB will take enforcement actions to hold auditors and firms accountable.”
The violations committed by Krant include failing to adequately supervise the engagement teams on the 2020 Blockchain of Things and Applied UV audits, including failing to review the workpapers or obtain computer access to review the workpapers. according to the PCAOB. Krant also failed to properly review the engagement team’s work on deferred revenue for the Blockchain of Things 2021 audit to ensure appropriate audit evidence was obtained.
The firm was also sanctioned for failing to provide reasonable assurance engagement teams performed the audits in accordance with the applicable standards and regulations.
“The firm and one of its partners violated PCAOB standards in the conduct of the audits and failed to implement quality control policies and procedures to safeguard against these violations. The sanctions imposed by the board hold the respondents accountable for those failures,” Robert Rice, director of the PCAOB’s Division of Enforcement and Investigations, said in a statement.
Without admitting or denying the findings, Krant and the firm consented to the PCAOB’s order, which:
- Censures both respondents;
- Imposes a $75,000 civil money penalty on the firm, and a $50,000 penalty on Krant;
- Suspends Krant from associating with a registered firm for one year; and,
- Requires the firm to hire an independent consultant to review and make recommendations to the firm’s system of quality control.
The IRS Whistleblower Office has released its first multiyear
“We need help from whistleblowers — people with firsthand knowledge of non-compliance who are willing to share what they know with us so we can investigate,” said IRS Whistleblower Office director John Hinman in his message prefacing the plan.
The plan reflects a multiyear approach to improving processes and operations, expanding collaboration and outreach and integrating stakeholder feedback with:
- An enhanced claim submission process;
- Effective use of whistleblower information;
- Fair and timely awards;
- Keeping whistleblowers informed of the status of their claims and the basis for IRS decisions on claims;
Safeguarding of whistleblower and taxpayer information ; and,- Supporting the office workforce with technology, training and other resources.
Thirty-eight initiatives will address areas to advance the program, including several to speed claims: a claims portal, more locations nationwide for claim review and better initial analysis, among other measures.
Since 2007, the office has made awards of more than $1.3 billion based on collection of more than $7.4 billion from tips. In fiscal year 2024, the IRS paid awards totaling $123.5 million based on tax and other amounts collected of $474.7 million, the third highest amount in the program’s history. Whistleblowers’ awards are generally 15% to 30% of the attributable money collected.
The
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Paul Atkins was sworn in Tuesday as the new chair of the Securities and Exchange Commission; he is expected to bring a more deregulatory and crypto friendly approach to the SEC.
Atkins was previously a member of the commission from 2002 to 2008, when he was appointed by then-President George W. Bush. He was named by
Uyeda, a Republican member of the SEC, has already been
The Senate confirmed Atkins’ nomination on April 9.
“I am honored by the trust and confidence President Trump and the Senate have placed in me to lead the SEC,” Atkins said in a statement. “As I return to the SEC, I am pleased to join with my fellow commissioners and the agency’s dedicated professionals to advance its mission to facilitate capital formation; maintain fair, orderly, and efficient markets; and protect investors. Together we will work to ensure that the U.S. is the best and most secure place in the world to invest and do business.”
Atkins was most recently chief executive of Patomak Global Partners, a company he founded in 2009, where he spearheaded efforts to develop best practices for the digital asset sector. He also served as an independent director and non-executive chairman of the board of global stock exchange operator BATS Global Markets Inc. from 2012 to 2015.
During his previous tenure as an SEC commissioner, he pushed for transparency, consistency, and the use of cost-benefit analysis at the agency. He also represented the SEC at meetings of the President’s Working Group on Financial Markets and the U.S.-EU Transatlantic Economic Council. From 2009 to 2010, he was appointed a member of the Congressional Oversight Panel for the Troubled Asset Relief Program in the wake of the financial crisis.
Before his time as an SEC commissioner, Atkins was a consultant on securities and investment management industry matters, especially regarding issues of strategy, regulatory compliance, risk management, new product development, and organizational control. From 1990 to 1994, he served on the staff of two chairmen of the SEC, Richard Breeden and Arthur Levitt, ultimately as chief of staff and counselor, respectively.
He started his career as a lawyer in New York, focusing on a variety of corporate transactions for U.S. and foreign clients, including public and private securities offerings and mergers and acquisitions. He worked for two and half years in his firm’s Paris office.
Originally from Lillington, North Carolina, he grew up in Tampa, Florida. He and his wife Sarah have three sons.
The Center for Audit Quality congratulated Atkins on Tuesday, saying his deep experience with the SEC and long-standing commitment to investor protection would position him well to lead the commission at a time of rapid change in the capital markets and corporate reporting. The CAQ said it shares his “belief in the critical role that independent assurance plays in fostering trust in our financial system.”
“Strong capital markets depend on strong investor confidence — and investor confidence depends on the credibility of the information they rely on,” said CAQ CEO Julie Bell Lindsay in a statement. “We welcome Chair Atkins’ leadership and look forward to working together to advance thoughtful, forward-looking policymaking that recognizes the vital role of assurance in protecting investors and reinforcing the integrity of our markets.”
Atkins was
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