OPINION
Ian Oxnevad | Minding the Campus
The ongoing war over Iran’s nuclear program has overshadowed the end of a financial fight with Iran here at home.
This past March, the Alavi Foundation, a New York-based nonprofit connected to the Iranian government, shut its doors and transferred its assets to a new nonprofit called the Amir Kabir Foundation after a $318 million settlement over terrorism and sanctions violations. For decades, Iran used the Alavi Foundation and money generated in the United States to circumvent sanctions while funneling millions of dollars to American charities and universities, building soft power and influence along the way. Here is how they did it.
Originally founded as the Pahlavi Foundation in 1973 before the fall of the Shah, the organization was later rebranded as the Mostazafan Foundation and, eventually, the Alavi Foundation. Its U.S.-based real estate portfolio, namely its 36-story Manhattan skyscraper at 650 Fifth Avenue, helped Iran circumvent sanctions while the foundation gave millions to charities and organizations in the U.S.
Money flowed to Persian-language programs and Middle East Studies departments across American higher education, as well as to local Islamic initiatives. Federal investigators were scrutinizing the Alavi Foundation as early as 2003 over suspicions that it helped Tehran monitor Iranians in the United States, obtain information about U.S. technology, promote the regime’s views, and channel money to American academics. A late 2009 asset forfeiture action triggered a lengthy court battle between the Alavi Foundation and the U.S. government that ended only this past March with a $318 million settlement.
Colleges and universities are geopolitical terrain and soft targets for influence, offering platforms for propaganda, access to emerging technologies through fundamental research, and a cash-hungry professoriate with an animosity toward the West. The Alavi Foundation seized on this.
Between 2000 and 2008, the Alavi Foundation donated $3.1 million to American universities and schools. The universities that took Alavi Foundation money include elite schools like Harvard, Columbia, UC Berkeley, UCLA, the University of Southern California, and the University of Pennsylvania. Other recipients are more surprising, such as Sacred Heart University, Portland State University, the Catholic University of America, Kutztown University, Hunter College, and Lake Forest College.
American law tacitly recognizes that colleges and universities are ripe for foreign influence. This is evident in Section 117 of the 1965 Higher Education Act, which requires universities to report foreign donations exceeding $250,000. The National Association of Scholars has found that universities routinely fail to report foreign funds, including money from China and Qatar, even when those funds far exceed the $250,000 reporting threshold. Iran was more careful: not one donation between 2000 and 2008 was large enough to require universities to report it.
Most of the Alavi Foundation’s funding to universities went to support Persian-language programs and Middle East Studies departments. And though the dollar amounts were small and beneath the reporting threshold, they were enough to pay the salaries of specific faculty and affect both campus culture and curricula.
When the government seized the Alavi Foundation’s assets in 2009, the New York Post reported that the foundation’s funds to Columbia and Rutgers supported programs with professors “sympathetic to the Iranian dictatorship.” In 2007, Columbia University received $100,000 from the foundation after agreeing to host then-Iranian President Mahmoud Ahmadinejad. From 2005 to 2007, the foundation gave $351,600 to Rutgers’s Persian-language program. Hooshang Amirahmadi, former head of Rutgers’s Center for Middle Eastern Studies, which then housed the university’s Persian program, has a history of defending Hamas and Hezbollah, going so far as to call terrorism a “true myth.”
When Michael Rubin of the American Enterprise Institute asserted that Iran was “laundering their policies through academe,” Amirahmadi countered that universities, rather than professors, received the funds. Amirahmadi is correct: money is fungible. Receiving $100,000 in outside grant funding for one program frees up $100,000 for the university to redeploy elsewhere. Alavi Foundation money followed personnel. The Alavi Foundation donated to Princeton, Columbia, and others where Mohammad Jafar Mahallati, who was Iran’s ambassador to the United Nations, taught.
But the Alavi Foundation’s university grants were only one part of the story. Just as important was where the money came from. Rather than sending funds directly from Iran to American universities, the foundation generated money through its U.S. real estate holdings and used that revenue to support its grantmaking. At the center of this arrangement was 650 Fifth Avenue, a Manhattan skyscraper that the foundation co-owned with Assa Corporation, which was itself tied to Bank Melli, Iran’s state-owned bank.
That relationship eventually drew the attention of federal authorities. In 2013, U.S. District Judge Katherine Forrest issued a judgment against the Alavi Foundation, stating that “based on uncontroverted record evidence, Assa was (and is) a front for Bank Melli, and thus a front for the government of Iran.” The building was originally constructed by the Pahlavi Foundation with support from the Shah. Assa Company Ltd. held a minority interest in the property through Assa Corporation and represented the interests of Bank Melli, Tehran’s state-owned bank. Assa Company Ltd. was registered in Jersey, a British Crown dependency in the Channel Islands. Iranian ambassadors to the UN routinely met with the Alavi Foundation over managerial decisions. In 2017, a jury in New York ruled that the federal government could seize the foundation’s assets, valued at about $1 billion. This was the largest terrorism-related forfeiture in U.S. history.
Iran successfully demonstrated the flimsiness of Section 117 and, indeed, the limits of American sovereignty over its own higher education system. The money was raised in the U.S., crossed no borders, and flowed through a minority ownership structure embedded in an offshore tax haven. The private sector and business world are routinely demonized in college classrooms, yet universities will happily take money from foreign sources without serious scrutiny or questions. If federal higher education law is meant to prevent malign foreign actors from abusing the university system, it demonstrably failed with the Alavi Foundation.
At the same time, American counterterrorism and sanctions laws did work and show a way forward, even if it is a slow one. Shutting down the Alavi Foundation took years and leaves specific funding relationships unexplored. If money from terrorists, dictatorships, and Communist countries such as China is to be kept out of American education, lawmakers need to start treating education as a national asset worth defending.
This article was originally published on August 25, 2026 by Minding the Campus.
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