Clouds Hang Over Party for Stanford’s Centennial : Education: The prestigious institution, hit by a quake and budget cutbacks, now faces a federal inquiry.

This was supposed to be a triumphant season for Stanford University. The most prestigious private university on the West Coast was to celebrate its centennial with confidence that the future looked ever brighter and lucrative donations more obtainable.

The centennial parties and lectures continue and donations roll in, but there is some unanticipated gloom these days on “The Farm,” as the 8,180-acre campus is affectionately nicknamed.

Stanford has not recovered fully from the October, 1989, earthquake, which caused $160 million in damage on the campus. Recent budget cuts resulted in about 100 non-teaching layoffs. Now, Stanford braces for congressional hearings today in Washington, capping months of bad publicity about the university’s alleged abuse of federal funds for research overhead.

“Between the earthquake, the drought, the overhead investigation, the budget reductions and general effects of this, that and the other thing, we sometimes lose sight of the fact we have a lot to celebrate,” said John Perry, philosophy department chairman. “It’s all kind of put a shadow on things.”

Nearly everyone on campus wants Stanford President Donald Kennedy to make a good showing today before the congressional panel, refuting allegations that the school may have overbilled the government as much as $200 million in research overhead since 1980. Yet, beneath those good wishes, some faculty and students are tugged in two directions: anger at federal investigators for dragging Stanford’s name through the mud and embarrassment about some of Stanford’s actions.

“People are very proud of this university. They worked damned hard to get in here. If someone comes up to me and says Stanford is a capitalist, elitist, brat-snob school, I would defend Stanford. I think it is a great institution,” said Kasandra Vitacca, a junior and history major. However, she considers Stanford’s handling of indirect research costs as “definitely questionable” and some of the expenditures as “incredibly frivolous.”

Sally Cole, the administrator who handles student discipline cases, said the campus feels somewhat besieged because of the hearings and reports that Stanford billed the government for depreciation on a yacht and buying flowers for the president’s house. While insisting it did no wrong, the school withdrew about $690,000 in such overhead bills recently.

“There are a lot of Stanford haters out there and we are aware of a certain bloodthirst . . . a certain satisfaction when the mighty appear to be falling,” Cole said. As a result, she said many people at the school are rallying strongly behind Kennedy and centennial events: “This is a time Kennedy wants to be a time of great institutional pride. It’s harder when everybody is feeling stressed out because they are the objects of scrutiny and suspicion.”

Stanford’s leaders have hired high-powered public relations and law firms in Washington to counter the probe by Rep. John D. Dingell, a Michigan Democrat. In this centennial year, school officials spend a lot of time rehearsing television interviews and practicing damage control against news leaks from Dingell’s aides. Meanwhile, fund-raisers are worried about an impact on donations to the school, although they say they have seen no drop-off.

Most Stanford students, staffers and professors predict that Stanford’s reputation will not be soiled for long, particularly as investigators begin to focus on other institutions such as Harvard University and the University of Pennsylvania.

“I think most students know that things go on like this at other schools. I’m sure it will blow over,” said Kimberly Reed, who graduated from Stanford three years ago and now has an administrative job at the medical school.

On the other hand, Jason Moore, a junior majoring in history, called for Kennedy’s resignation. “I think the administration operates with a really smug attitude toward the rest of the world and they’ve finally got their comeuppance,” he said.

Stanford’s trustees seem strongly behind Kennedy, who has been president of the 13,350-student campus for 10 years.

There is even some mirth about the situation. During a centennial event speech last weekend, novelist Wallace Stegner, a Stanford professor emeritus, recounted how railroad tycoon and politician Leland Stanford Sr. and his wife, Jane, opened the school in October, 1891, in memory of their only child, a teen-age son who died of typhoid. Later, the Stanford estate faced a rough tax probate. “1991 was not the first time Stanford had difficulty with the government,” Stegner quipped, winning a big laugh from his audience.

Some Stanford leaders worry that the difficulty with the government could result in cutbacks in federal support for higher education. But now, education and research thrive in the high-tech laboratories and in the sandstone quadrangles decorated with Rodin sculptures. According to fund-raising and recruiting barometers, Stanford is far from hurting, despite the recent round of budget tightening.

Fewer than five years ago, the school announced what was then the most ambitious fund-raising drive in American higher education history: $1.1 billion by February, 1992. Stanford is only $40 million short of that goal and seems certain of making the deadline.

Nobody has announced withholdings of donations because of the research cost controversy, but about 30 donors have asked for further explanations, said Elizabeth Sloan, communications director for the development office. She said the school received a similar number of inquiries about a new policy allowing homosexual and unmarried heterosexual couples to live in graduate student housing.

“One of our feelings about the indirect cost issue is that it is esoteric and complicated enough (not to affect fund raising). That doesn’t mean we aren’t worried about it. In the current economic environment, anything that happens to plant doubt in the minds of donors about the way you manage money can’t help,” Sloan said.