Indiana University has a policy set by the Board of Trustees not to accept
funding for classified research.  I believe this also stems from the 1960s
activism (although I'm much too young to remember clearly).  I have worked with
some individual faculty members who will not apply for Dept. of Defense funding
or funding from one or another particular sponsor.  But the policy against
classified research is the only official one I'm aware of.

-Marcia Zuzolo
Sponsored Research Services
Indiana University
xxxxxx@indiana.edu