ON A RECENT SATURDAY AFTERNOON in Southeast Portland, a mass of two dozen nudists, painted blue, were gathered at Reed College.

They call themselves “Picters,” after an ancient Scottish tribe, and they carried turkeys and other assorted meats for the feast that was about to ensue as hundreds of hungry students lined up.

The breasts and genitals on display attracted no stares. Neither did the student nearby who took a hit off a footlong glass bong as gray-bearded alums walked by with their toddlers and teenagers in tow.

For that matter, students took little notice later that evening when a student, under the influence of psychedelics, was escorted through campus by two emergency workers, his screams echoing off the brick walls of the library:

“I’m white! You’re black! Oh, for the love of God, you fools! Death! Oh, for the love of God! Sex! Death!”

Workers took him to a large white tent on campus specially designed with plush beds, soft lighting and deep-blue tapestries to comfort people having bad trips.

This is Renn Fayre, a party held at Reed each spring. Begun as a Renaissance fair in 1968, it has since morphed into a three-day festival of music, performance art and chemical enhancement that students see as a well-earned release.

Two days before the start of this year’s festival, Reed’s student newspaper, the Quest, printed advice on which drugs to take.

“Renn Fayre is extremely intense, and even experienced psychonauts can (and will) flip out,” the paper wrote. “Most of you won’t be doing a single drug, will you? Nope, you’re going for double or nothing and betting on drug cocktails.”

Less than a month earlier, Alejandro “Alex” Lluch, an 18-year-old freshman from Malibu, Calif., died alone in his dorm of a heroin overdose.

If there was any remorse, or sense that Reed’s extraordinarily

tolerant attitude toward drug use had changed, it was nowhere in evidence at Renn Fayre.

In fact, Reed College—a private school with one of the most prestigious academic programs in the U.S.—is one of the last schools in the country where students enjoy almost unlimited freedom to experiment openly with drugs, with little or no hassles from authorities.

Reed, whose alums include Pulitzer Prize-winning poet Gary Snyder and Apple boss Steve Jobs (a dropout), has built its reputation on two foundations—as the college president, Colin Diver, knows very well.

“When you say Reed,” Diver says, “two words often come to mind. One is brains. One is drugs.”

IN THE HYPER-COMPETITIVE WORLD of American higher education, the most successful schools have managed to stand out by identifying and cultivating a niche. Purdue produces engineers. Georgetown, federal officials. USC cranks out filmmakers; the University of Chicago, neocons.

One hundred years after its founding, Reed College has managed a double play. It’s known simultaneously as one of the most rigorous undergraduate schools in the nation, as well as one of the most permissive.

“It’s like this is the only place left in America where we still have rights,” says Matt Milton, a 19-year-old freshman from Chicago who chose Reed specifically for its openness to drugs.

Since arriving last year he’s tried LSD, mushrooms, DMT and 2-CB, a rare mescaline analogue that’s found few places outside of Reed. He was introduced to all those drugs his freshman year.

As the 2007 Insider’s Guide to the Colleges says of Reed: “Students can’t get busted for alcohol or drug use unless they harm or embarrass another student.”

It’s a social contract most students welcome.

“There’s things people do on campus that in the real world would get one arrested,” says senior Alise Scheeler. “I think it’s a good thing that Reed allows you to figure that sort of thing out for yourself without fear of getting thrown in jail for life.”

Reed’s dual reputations for hard studying and drug use may seem mutually exclusive, and at times perhaps they are.

Reed’s graduation rate is 71 percent—below average compared with other private schools. Diver says about 30 percent of students with academic problems have issues with alcohol or other drugs.

But for those who think drugs a strange fit with high-caliber academics, generations of Reed alums argue there’s no paradox. That, in fact, drugs have the potential to open hidden doors and lead to intellectual and spiritual revelations. And that pushing boundaries, challenging convention and questioning moral dogma are the core of a liberal-arts education.

And the occasional casualty like Alex Lluch? While no one this reporter interviewed would say so on the record, it was hard not to get the sense that many felt it’s simply the price to be paid for that freedom—not a reason to make changes. Not a single student we interviewed believes Reed has any problem with drugs.

As senior Mark Jones put it, the only drug problem Reed has is in the public eye.

“It doesn’t feel at all like a problem to me,” Jones says. “I don’t think it’s a problem until someone dies.”

WHILE IT’S NO SURPRISE DRUGS EXIST on many college campuses, there’s little question Reed is unique.

The student handbook, distributed each year to incoming freshmen, has a lengthy chapter on “the recreational drugs that you will most commonly encounter at Reed.”

The handbook, written by students, provides a user’s guide to pot and alcohol, cocaine, amphetamines, “benzos,” LSD, DMT, mescaline, MDMA, PCP, ketamine, nitrous oxide, opiates, depressants and psilocybin.

“If one of the things that brought you here was the possibility of mixing every psychoactive substance known to man in a cereal bowl and watching the Muppets until you hear Jim Henson tell you that you are his last and greatest puppet creation, then go for it,” the student handbook reads.

Ironically, that quote comes from a chapter on how it’s possible to live drug-free at Reed. But for those who don’t, there are few consequences.

Students told WW that, at a memorial party for Lluch in Reed’s student union a week after his death, one classmate was caught doing lines of cocaine. Security confiscated the coke and let her go.

After the party, but in the same building, another student was caught snorting MDMA. She was called in for questioning after the powder also tested positive for heroin, but in the end she was let go with no punishment.

Two weeks after Lluch (pronounced “yook”) died, Reed held another party, the yearly “Nitrogen Day” event, where students inhale from balloons filled with nitrous oxide in the quad.

According to Reed alums and the student handbook, past parties in the school’s student union have included baby pools filled with Humboldt County gold and giant ladles hanging from the ceiling filled with MDA.

A “bong couch” with a 40-gallon built-in water tank stood in the student union for years until security finally removed it in 2006. On rainy days, when the college’s sprawling front lawn is soaked, the student union still serves as the backup spot for students to get stoned.

Campus security apparently understands the rules of engagement.

“I’ve called the safety officers four or five times when my friends have just drugged their brains out,” says freshman Andrew Wilder, a close friend of Lluch’s.

Wilder says that one time a friend mixed painkillers with booze and passed out. Wilder called security, who woke the friend up, fed him bagels and ignored the drug paraphernalia scattered around the room. “They just closed their eyes to it,” he says.

The current and former students we spoke with said heroin is rarely seen or heard of on campus. But recent events show it may be flourishing to an extent they don’t fully realize.

Administrators now acknowledge a sophomore woman suffered a near-fatal heroin overdose on campus in December, when a security guard saved her life with CPR. The overdose was not revealed to students and faculty until after Lluch died, when the Quest broke the news.

Lluch’s death also prompted one student to write an essay for the Quest about her former “raging heroin problem” and the administration’s efforts to keep it quiet.

In February, before Lluch died, a former security guard sued Reed, alleging he had cleaned out a campus apartment filled with needles, scales and other signs of heroin use and was fired after he refused to destroy the evidence. Ex-guard Josh Chambers’ lawsuit charged that school officials insisted on handling it “the Reed way” by disposing of it quietly without notifying police.

Reed settled the lawsuit in March for an undisclosed sum.

Diver called the case a “nuisance lawsuit” filed by a “disgruntled” former employee. Administrators declined to discuss specific incidents, citing medical confidentiality. But Diver says Reed takes disciplinary action when necessary, citing the fact that one student was expelled and two suspended as a result of the raid on the Reed campus apartment.

Outside authorities, however, rarely hear of problems on campus.

Cmdr. Derrick Foxworth, head of the Portland Police Bureau’s Southeast Precinct, says officers rarely get called out to Reed by campus security. “We don’t have any problems reported to us that would indicate there is a drug issue over there,” Foxworth says.

The Multnomah County District Attorney’s Office says the same. “We find it very curious that we get few if any referrals from Reed,” says Mark McDonnell, head drug prosecutor for the DA. “At Lewis & Clark [College], they’re fairly aggressive.”

The comparison between these two private colleges in Portland couldn’t be more striking.

Both campuses are required by federal law to report crime stats. Reed reported 15 liquor violations and 18 drug violations in 2006, the most recent data available. Lewis & Clark, with 600 more students than Reed’s 1,400, reported 288 liquor violations and 85 drug violations that same year.

Security at Lewis & Clark has a written agreement with Portland police to report any evidence a felony has been committed. That includes suspected drug dealing and even possession of hashish, for which one sophomore was arrested in March.

Reed, all the while, lives in a world apart.

IT DOESN’T TAKE LONG walking around Reed’s campus to feel as if you’ve been transported into a parallel dimension where “Promethean” is an everyday word, students go to class wearing fairy wings, and the fire-twirling team is the coolest club around.

Reed has cultivated a reputation for subversion. In the 1950s it was a suspected hotbed of communist sympathy. The school refused to adopt a drug and alcohol policy during President Reagan’s drug wars. Reed thumbs its nose at U.S. News and World Report, refusing to participate in its college rankings.

At the same time, Reed produces one of the highest ratios of Ph.D. students in the country, drawing privileged kids with almost unlimited intellectual potential.

“Word on the street about Reed College: It’s known for its rigorous academic programs and for the independent students it attracts,” says Tony Pals, spokesman for the National Association of Independent Colleges and Universities. “These are very gifted and serious students.”

Reed’s mascot is a burgundy griffin, but the school is best personified by its president, Colin Diver. Few could better represent the intellectual achievement and social conscience Reedies aspire to—or their detached ambivalence to drugs.

Diver is a graduate of Amherst College and Harvard Law, and his family’s experiences living in a historically black neighborhood in 1960s Boston were chronicled in J. Anthony Lukas’ 1985 Pulitzer Prize-winning book Common Ground.

Dressed in tweed and a tie, Diver, 64, looks the part of the Ivy League elder. But he’s as comfortable sharing beers with seniors at Renn Fayre—earning the affectionate nickname “C-Divvy” among students—as he is in his wood-paneled office in Eliot Hall.

Diver brings a cerebral sensibility to the question of drugs. He knows students are going to experiment. He’s aware a number of them come to Reed specifically for its tolerance on the issue. The question, he says, is how best to discourage more dangerous drugs like heroin.

“Not for moral reasons, because moral arguments don’t work,” Diver says. “The most important thing we can do is protect the health and safety of the students, which in most cases means you address the medical and therapeutic dimensions of the problem first.”

Like an uncertain parent, he peppers such acknowledgements with threats of drastic change if students don’t take more responsibility for their actions, including the possibility of killing Renn Fayre.

“There are some people who say what Reed needs is shock therapy: a five-year police state or a 10-year police state,” Diver says. “There are extreme versions of this from some of our alumni and members of the community volunteering their advice. But I don’t hear that as a serious proposal from too many people.”

After the near-fatal overdose in December, the college began reviewing its drug and alcohol policy, including how it’s enforced. But even after Lluch’s death, Diver says he’s uncertain if there will be any changes made when the new school year starts in September.

Diver is clearly conflicted. On one side are students, alums and even some faculty members who insist Reed needs to stay out of the failed war on drugs. They’re proud that Reed resisted forming a drug and alcohol policy at all until 1993, after the federal government threatened to pull the school’s funding.

On the other side is the publicity nightmare that’s come with Lluch’s death—as well as the possibility of more lawsuits. “If they’ve covered up heroin overdoses and heroin distribution in the dorms, they have exposed themselves to enormous liability,” says Portland attorney Greg Kafoury.

Students say they’re likely to oppose any effort to crack down after Lluch’s death. “All of us were concerned that they were gonna use this as a vehicle to change the policy, and that would be unfair to Alex,” says Milton, who was also close with Lluch.

LLUCH’S DEATH DID HAVE ONE EFFECT: It brought out Reed’s reclusive instincts. The school has a reputation among Portlanders as a closed environment that neither engages in nor invites much interaction with the rest of the city.

Neighbors in wealthy Eastmoreland are free to walk their dogs among Reed’s red-bricked Collegiate Gothic halls. And the college is home to the Chamber Music Northwest festival. But Portlanders have long complained of Reed as an enclave of self-absorbed arrogance.

“They treat us like, ‘We know better than you, we’re Reed College,’” says Mike Fisher, vice chairman of the Eastmoreland Neighborhood Association. “Their style of negotiating is basically telling us what they’re gonna do, and we can take it or leave it.” WW was escorted off campus by Reed security four times while trying to report this story. We were barred from attending Renn Fayre but went anyway as the guest of an alum, until security removed us.

And there has been enormous reluctance on the part of the faculty to talk about Reed’s drug lifestyle. Of 13 current and former professors we contacted, only two would talk on the record. And they had little to say.

While there seems to be little momentum for change, some Reedies do feel the college needs to rethink its policies. They include Steve McCarthy, a 20-year member of the board of trustees who sees an “entrenched drug culture” at the school.

McCarthy, an alumnus and owner of Portland’s Clear Creek Distillery, entered Reed in 1961, when it was still a bucolic community of 600 students. “Wine was our drug of choice,” McCarthy recalls.

He took a year off to travel and returned to Reed in 1964, the start of a time when McCarthy says events on and off campus “whipsawed” the tiny school.

“The drug culture was kind of washing up the coast like a tsunami, and drugs became a big thing at Reed,” McCarthy recalls. “You had this pleasant little college that just got completely torn to pieces and had no idea what to do with itself.”

TO BE FAIR TO REED, abstinent students say they feel no pressure to do drugs. And, importantly, Alex Lluch had a heroin problem well before he came to Portland.

After what one friend described as a lonely childhood—a brainy kid stranded in the swanky beach suburbs of Malibu—Lluch had finally found a home at Reed College in Southeast Portland.

Six feet tall and rail-thin, Lluch distinguished himself as gregarious and outgoing at a school with more than its share of socially awkward intellectuals. He was known to regale his dorm mates with history lectures at 2 am, then wake up and blast hip-hop first thing in the morning.

But Lluch also brought to Reed a habit he’d picked up in high school: a predilection for heroin. During his first semester, friends say, he found a downtown dealer to supply his needs. He was trying to quit—a struggle he was open about with his close friends, who pushed him to stop and even forced him to break his needle on one occasion.

On the morning of April 5, Lluch ran into his roommate, Josh Oppenchild, outside their room in Naito Hall. They made plans to meet for lunch at the college cafeteria, and Lluch went alone to his room to get ready.

A half hour later Oppenchild tapped on the door and peeked inside. Lluch was lying naked, face down, on the bed. Thinking he was asleep, Oppenchild went to lunch without him. He checked on Lluch again at around 1:30 and 4 pm, but Lluch hadn’t woken up.

It wasn’t until 11:30 that night that Lluch’s friends tried to rouse him, failed, and finally called campus security. Police, a fire crew and an ambulance arrived at quarter to midnight and pronounced Lluch dead of a heroin overdose at age 18. There was a fresh injection mark in his right arm and a syringe nearby.

Now Portland police are working with the U.S. Attorney’s Office to find the dealer, with the possibility of prosecuting under the federal Len Bias law, which provides lengthy prison sentences for dealers who sell lethal doses.

Alex’s father, Carlos, says Reed needs to change the way it handles drugs. But like Diver and others at the school, he struggles to define what exactly that means.

“They have to change something,” he says. “I don’t know what, but they have to change something.”

Newsweek magazine ranked Reed last year as one of 25 “New Ivies.”

Tuition at Reed runs $38,000 a year, making it the most expensive school in Oregon.

In a 2007 survey, 25 percent of Reed students said they’d used an illegal drug other than marijuana in the past 30 days.

Campus life at Reed is ruled by an “honor principle” where students and staff agree not to harm one another or the school.

In last year’s Princeton Review, Reed ranked highest nationally in three categories: Best Classroom Experience, Students Never Stop Studying, and Students Ignore God on a Regular Basis.

Reed’s endowment is $450 million, and the school received $1.4 million in federal money in the past fiscal year.

Fifty-eight percent of Reed students live on campus.