I would like to know if there is a stand alone chemical that will
deink paper enough to make it illegible.  I've read that hydrogen
peroxide or household bleach may do this, but I'm not sure.  I would
like to be able to dump large quantities of paper into a large vat of
water (mixed with the appropriate chemical) and have the paper
somewhat deinked.  The ink does not have to be completely removed but,
after treatment, the paper would have to be illegible and recyclable
after drainage.  Is there anything simple (chemical wise) and safe
that will do this?  I'm willing to experiment!

I would suggest a good shredder instead.

Nelson's suggestion is sensible. There are shredder companies whose
machines pulverise the paper to a powder. These meet or exceed
guidelines for the destruction of classified documents. You could
always burn the paper.

Carbon tetrachloride would probably do it. Unfortunately it is a very
dangerous chemical and most municipalities have banned its use.