U.S. Investigates Stanford on New Overbilling Charges

The federal government is investigating new allegations that Stanford University overbilled taxpayers as much as $480 million for research in the 1980s, more than twice previous estimates.

“There have been some new questions brought up, which we’re looking into, but nothing has been resolved yet,” Norm Hanson, spokesman for the Office of Naval Research, said Friday. “This is all part of the review process.”

Stanford financial chief Peter Van Etten called the new charges “incredible” and a “figment of the imagination” of the Navy’s on-campus research contract negotiator.

Government auditors have been investigating to determine if Stanford overcharged as much as $180 million in the 1980s for research overhead in an inquiry that spread to other U.S. schools and prompted a congressional hearing.

Stanford officials have denied any intentional attempt to overcharge, but the school has paid back about $2 million in inappropriate charges. Improper bills included depreciation on a school yacht and flowers, parties and furniture at Stanford President Donald Kennedy’s campus home. Kennedy has announced that he will resign in August because of the scandal.

Paul Biddle, the on-campus contract negotiator for the Office of Naval Research, prompted the investigation after alleging last year that Stanford overcharged $200 million for research overhead in the 1980s.

On Thursday, Biddle raised his estimate to $480 million by including another $180 million in Stanford employee benefits and $100 million resulting from mishandled federal property.

“The bill keeps rising and Stanford is still denying anything’s wrong,” Biddle said.