Colleges and universities - including some here in New England - have been caught up in a controversy over the use of offshore tax havens.

The scandal stems from a story in The New York Times detailing how several universities use offshore tax havens to protect investments and keep controversial investments discrete.

While college endowments are tax-exempt, schools can be taxed on certain investments not related to their educational mission.

The Times says Dartmouth is one of several schools that use offshore companies to shield such investments from federal taxes.

The Times report is based on the Paradise Papers, confidential documents leaked from a Bermuda-based law firm.

The Times says schools may also use offshore accounts to hide potentially controversial investments.

In 2012, Northeastern University invested in a Cayman Islands partnership that developed oil fields. None of the offshore activities are considered illegal.

In a short statement, a spokesman for Northeastern University said, "It is important that we diversify our portfolio to enhance the return on these investments within the strict guidelines of the law. Consistent with other mission-driven institutions, the university maintains some limited investments in offshore entities.”

Dartmouth did not respond to a request for comment from WGBH News.

Terry Hartle, a senior advisor with the American Council on Education, which represents hundreds of colleges across the country, admits the optics don't look good but says schools have "a fiduciary duty to maximize revenues and minimize taxes."

The report also comes as House Republicans are rolling back their plan to tax colleges with large endowments.

As part of their tax overhaul, Republicans had proposed a 1.4 percent excise tax on hundreds of private colleges with endowments worth at least $100,000 per full-time student.

Higher education leaders objected, saying the tax would have dire consequences financial aid, research and jobs on campus.

On Monday, Republicans passed an amendment to the plan that would increase that threshold to $250,000 per student, lowering the number of schools that would have to pay the tax.

About 70 colleges, including nine in Massachusetts, would still be affected.