Robert D'Agostino, the former Justice Department official who caused a furor last year by suggesting in a memo that blacks are more likely than whites to be emotionally disturbed, is the leading candidate to become president of the Legal Services Corp., according to sources close to the program.
The sources, opponents of D'Agostino's selection, said that another candidate is Alfred S. Regnery, deputy assistant attorney general in the department's lands division, who has suggested in the past that Legal Services be eliminated.
Regnery headed a study group for the conservative Heritage Foundation in 1980 that recommended that Legal Services be abolished. "The corporation is so basically flawed that it is beyond reform sufficient to justify its continuation . . . . The only real option is its demise," he said in the report.
The 11-member Legal Services board of directors is scheduled to meet Friday to choose a president from among five finalists. The selection is not subject to confirmation by the Senate.
The Reagan administration has tried without success to persuade Congress to eliminate the federal program that provides legal aid to the poor.
Legal Services supporters say they believe the administration is hoping to install a president who would curtail services the corporation has been providing to the poor.
D'Agostino, a former deputy assistant attorney general in the Civil Rights Division, enraged department lawyers last year when he recommended that the department drop a major school and housing discrimination suit against Yonkers, N.Y. D'Agostino wrote in a memo that it was not improper for the school district to put more blacks than whites in programs for the emotionally disturbed.
"Blacks, because of their family, cultural and economic background, are more disruptive in the classroom on the average. It seems they would benefit" from programs for the emotionally disturbed, he said. He argued that the suit found discriminatory intent in almost any act that didn't lead to "the ultimate good as defined by the Justice Department, racial mixing."
More than 100 lawyers in the Civil Rights Division circulated a petition of protest against what they called unfair racial stereotypes.
D'Agostino, who worked in the Reagan campaign as national chairman of Law Deans for Reagan-Bush, also has been criticized for an incident in 1978 in which he hit a secretary who refused to type a paper for him at the Delaware Law School where D'Agostino was teaching. D'Agostino later conceded that he hit the woman after she attacked him with her "fingernails."
Sources familiar with Legal Services say that there are five final candidates for the job of president -- the person who would run Legal Services on a day-to-day basis. They say that D'Agostino is the likely winner, with Regnery a close second.
Legal Services is run by an 11-member board of directors. Sources familiar with the program say President Reagan has been displeased that the board, which still has not been confirmed by the Senate, has not been more aggressive in moving toward phasing out the program.
Those sources say a split has developed on the board between two factions, one very conservative, and the other somewhat less conservative. "It's no longer a fight between the liberals and conservatives. It's between the right and the far right," one said.
They say the fight is between board member Howard H. Dana, who heads the more moderate faction, and William F. Harvey, the conservative University of Indiana law professor who is now chairman of the Legal Services board and will be fighting in the Friday meeting to retain his position as chairman of the board. Sources there say that Harvey will back D'Agostino for president.
Harvey was reported yesterday to be driving here from Indianapolis for the Friday meeting and could not be reached for comment.
Last weekend, Reagan made two final appointments to the board that are expected to strengthen Harvey's position. They are Frank J. Donatelli, a Washington lawyer and conservative activist who played an important role in the 1980 presidential campaign, and Dan Rathbun, 25, a divinity student at Christiandom College in Front Royal, Va.
Rathbun, who has declared financial independence from his parents, is filling one of the two positions reserved on the board for poor people who are eligible for Legal Services.