STANFORD — If it were not for Paul Biddle, Stanford University might have gone on for years overcharging the federal government. In the eyes of many, his work as a whistle-blower revealed the renowned university as just another defense contractor that tried to bilk the taxpayers.
The role sat well with Biddle, an eccentric, portly Navy accountant who saw in the Loma Prieta earthquake a sign from God that something was amiss at Stanford.
He found and publicized questionable billings, and reveled in the national attention that resulted--a congressional inquiry of the nation's top research universities and upheaval at the highest levels of Stanford.
At the same time, he saw in the scandal his chance for personal riches. Under federal law, Biddle could be eligible for 30% of whatever money the government recovers from Stanford--a bill that could total $230 million--and he talked openly of his plans for the fortune he stood to collect.
On Thursday, Biddle announced a new twist in his relationship with Stanford--he resigned his post as a federal watchdog over the university and will seek instead to become its representative in Congress.
Biddle, a 47-year-old Republican, hopes to replace Rep. Tom Campbell (R-Palo Alto), a Stanford law professor before his election in 1988, who is running for the U.S. Senate. If elected, Biddle said, he would continue casting a critical eye on Stanford's affairs.
"Paul Biddle is the pebble in the shoe," said Biddle, who often refers to himself in the third person. "Paul Biddle is not a line unit. Paul Biddle is a guerrilla."
Stanford officials, who have battled Biddle since he arrived in 1988, were not amused at the news. Larry Horton, Stanford's associate vice president for public affairs, said Thursday that the university "has no comment on Mr. Biddle's candidacy now and never will have in the future."
Stanford, which had long sought Biddle's ouster from his Navy post, complained again Thursday to the Office of Government Ethics, citing portions of a rambling, 26-page letter in which Biddle recently accused Stanford trustees of a cover-up and called Stanford administrators "two-legged rodents."
"Is this permissible conduct by an employee of the United States government who is suing Stanford for hundreds of millions of dollars?" Stanford attorneys asked.
So far, Biddle's legacy at Stanford includes the resignation of university President Donald Kennedy, a budget crisis so severe the university must cut faculty and classes, and a system of fiscal accounting that alone costs the school $10 million a year.
Ultimately, Biddle's discovery could force the university to pay back as much as $230 million to the federal government--he insists it's more like $480 million--and jeopardize the huge research program that helped make Stanford one of the nation's premier universities.
What Biddle exposed, after combatting both the university and his superiors at the Office of Naval Research, was a pattern of improper billing by Stanford officials for the overhead expenses of research projects funded by the government.
Stanford came to rely on the federal overhead payments as a major source of income--second only to tuition--to finance the university's operations.
The university has admitted improper billings totaling $2.3 million, including such items as depreciation of the university's 72-foot yacht, a steady supply of fresh flowers for Kennedy's home and upkeep of the mausoleum where the founding Stanford family is buried.
Though school officials still deny the bulk of Biddle's accusations, their initial confident assurances that all payments had been proper turned out to be wrong.
"Stanford admits there were mistakes," said Peter Van Etten, the new Stanford chief financial officer brought in to clean up the mess. "There is no question Stanford is contrite and concerned. . . ."
But, he added: "There is a general belief among people that we are ripping off the country. Our belief is that couldn't be farther from the truth."
Stanford's problems with the federal government triggered unprecedented scrutiny of other research universities. But Stanford, according to government auditors, was in a league of its own. Taking advantage of a cozy relationship with Navy overseers, its reimbursement rate for overhead costs rose to 74% in 1990, one of the highest in the nation. This meant that for every $100 received by Stanford researchers from the government, the university got $74 more for overhead.
Among other things, Stanford billed the government for costs that federal auditors said had nothing to do with research: $185,000 for operation of a shopping center on Stanford property, ornate furnishings for the president's house and an orientation for freshmen students that included a trip to the beach.
Kennedy and other Stanford leaders have consistently maintained that such charges were legal, but they have been forced to concede they were not necessarily appropriate.
