Stanford Settles with Navy; Overbilling Case Closed

By 1994, Los Angeles Times | St Louis Post-Dispatch (MO), October 20, 1994 | Go to article overview

Stanford Settles with Navy; Overbilling Case Closed


1994, Los Angeles Times, St Louis Post-Dispatch (MO)


In a major victory for Stanford University, the Navy agreed Tuesday to accept $1.2 million to close its investigation of overbilling by the school, an inquiry that led to the resignation of former Stanford president Donald Kennedy.

The settlement was reached after years of dispute in which the Navy said Stanford had overcharged the government $250 million for research overhead over 12 years. The Navy said the school had billed the government for such items as the depreciation of a 72-foot yacht, a steady supply of fresh flowers for Kennedy's residence and upkeep of the mausoleum where the founding Stanford family is buried.

Stanford and the Navy announced the settlement jointly. Rear Adm. Marc Y.E. Pelaez said in Washington that an investigation found that Stanford adhered to its government contracts and was innocent of fraud or misrepresentation. But congressional staffers said that Stanford would not now be able to get away with the same billings because of changed put in place after the scandal broke out.

Stanford said Tuesday that the school was vindicated of a substantial amount of the wrongdoing with which it had been charged. …

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