After two years of scrutinizing Harvard's admissions policies, the U.S. Department of Education said yesterday it could find no evidence that the College either used quotas or otherwise illegally discriminated against Asian-American applicants during the last decade.

According to the findings of a review released yesterday, Harvard did not violate federal civil rights statutes by admitting white applicants at a higher rate than Asian Americans.

Instead, the Department accepted Harvard's contention that a policy of giving preferential "tips" to alumni children and recruited athletes--groups that include relatively few Asian Americans--had caused the discrepancy. Such preferential treatment is acceptable under the law, according to Paul H. Wood, a spokesperson for the Department.

"[The Department's Office of Civil Rights] reviewed current case law and found no legal authority to suggest that giving preferences to legacies and recruited athletes was legally impermissible," says the letter of finding, which was sent to President Derek C. Bok at 11 p.m. Thursday night.

The Education Department began its investigation in 1988, in response to allegations that three schools--Harvard, the University of California at Berkeley and UCLA--were discriminating against Asian-Americans. The Department was investigating whether the schools had violated the 1964 Civil Rights Act, which prohibits discrimination on the basis of race, color, religion or national origin in institutions that receive federal funds.

Through its investigation, the Education Department determined that between 1979 and 1989 Harvard accepted 13.2 percent of Asian-American applicants while accepting some 17.4 percent of white applicants. Harvard officials countered by noting that Asian-Americans now account for 20 percent of the Class of 1994 compared to 6 percent in the Class of 1979.

"This data does not support a hypothesis that ceilings are placed on the number of Asian Americans admitted," the Education Department said.

Harvard officials said yesterday that they were pleased with the investigation's results. William R. Fitzsimmons '67, dean of admissions and financial aid, said that the report was a recognition of the College's efforts toattract and admit Asian Americans.

And although the Education Department limitedits official statement to clearing Harvard'streatment of Asian-Americans, Daniel Steiner '54,the University's vice president and generalcounsel, said yesterday that the finding'slanguage indicated an endorsement of the entireadmissions program.

"All they explicitly clear up is that Harvarddoes not discriminate against Asian Americans,"Steiner said, "but there is a lot of language inthat report that seems to refer to generalapproval of admissions policies in a general way."

Steiner noted that the Education Department'sfinding was consistent with the Supreme Court'sanalysis of Harvard affirmative action policies inthe 1978 case, University of California v.Bakke. In that case, the majority struck downa quota system used at UC Davis, and citedHarvard's admissions policies--which give membersof minority groups preferential tips but do notset numerical quotas on admissions--as the idealalternative.

But while Harvard officials were elated,representatives from two Asian American lobbygroups contacted yesterday had mixed reactions tothe report.

Kathy O. Turner, the acting executive directorof Chinese for Affirmative Action, a SanFrancisco-based group, blasted the findings in atelephone interview. She said legacy preferencewas "tantamount to affirmative action for whitesand it perpetuates the white establishment."

A representative of the Japanese AmericanCitizens League, however, said that giving thechildren of alumni an edge in admissions wouldwould benefit Asian Americans in 20 to 30 years,when the children of current students begin toapply. Igasaki said he was more concerned that theEducation Department missed certain subtle formsof discrimination in its reviews of prospectivestudents.

"Instead of quotas they'll use other methods ofdiscrimination like emphasizing verbal over mathscores," Igasaki said, noting that Asian Americanstend to score higher on the latter. This sort ofdiscrimination could never be discerned by areview, he said.

On Capitol Hill, where several members ofCongress have criticized the Education Departmentfor dragging its feet in the investigation,sources said yesterday that legislators werepleased to see the probe completed. But neitherSen. Paul Simon (D-Ill.) nor Rep. Dana Rohrabacher(R-Calif.), the two members most closely involvedwith the proceedings, had time to developstatements on the content of the report, accordingto staffers.

With the review of Harvard completed, focus nowshifts to Berkeley's law school and UCLA'sundergraduate programs, where investigations arestill under way.

Earlier this week, the Education Departmentfaulted one of 84 graduate programs investigatedat UCLA for discriminating against AsianAmericans.

The Berkeley and UCLA reviews should becompleted within the next few months, Wood said,and sources say that other universities--possiblyStanford and Yale--may be reviewed later. [Seestory page 3]