Issues of Race: Texaco-Race Relations

CHARLAYNE HUNTER-GAULT: Two years ago, six African-American employees filed a federal anti-discrimination lawsuit against Texaco on behalf of 1400 others. The plaintiffs seek tens of millions of dollars in damages against the oil company, one of the nation's oldest and largest. In a separate action, the Equal Employment Opportunity Commission found earlier this year that Texaco failed to promote black employees because of their race.

BARI ELLEN ROBERTS, Plaintiff: I was called uppity. I was called a smart-mouthed little colored girl.

VERONICA SHINAULT, Former Texaco Employee: When you're walking down the hall and you see that there's nothing but white males that occupy these offices, and rarely do you see any women or minorities, you know that there's a problem somewhere along the line.

CHARLAYNE HUNTER-GAULT: Of its 873 executives who earn more than $106,000 a year, only 6 are black. The discrimination case exploded in a national controversy on November 4th, when court documents from a lawsuit revealed that a laid-off finance manager turned over a secret tape he recorded at corporate headquarters in August 1994.

On the tape, executives seem to belittle minority employees. Three of the participants: then Treasurer Robert Ulrich, David Keough, a senior assistant treasurer, and Richard Lundwall, a senior personnel coordinator, who recorded the meeting. The taped conversations, as shown on ABC'S "Good Morning America," were released by plaintiffs' lawyers after being enhanced for sound quality. African-American employees were referred to as "black jellybeans."

ROBERT ULRICH: (tape comments as shown on screen) I've heard this diversity thing. You know, how black jellybeans agree.

RICHARD LUNDWALL: (tape comments as shown on screen) That's funny. All the black jellybeans seem to be glued to the bottom of the bag.

ROBERT ULRICH: (tape comments as shown on screen) You can't just have we and them. You can't just have black jellybeans and other jellybeans. It doesn't work.

RICHARD LUNDWALL: (tape comments as shown on screen) Yeah. But they're perpetuating the black jellybeans.

CHARLAYNE HUNTER-GAULT: There were also what appeared to be racist remarks about Texaco employees who celebrate Kwanza, an African-American holiday.

ROBERT ULRICH: (tape comments as shown on screen) I'm still having trouble with Hanukkah. Now we have Kwanza–F–ing niggers, they have s—–d all over us with this.

CHARLAYNE HUNTER-GAULT: There were more comments which have reportedly led to a criminal investigation by the FBI of obstruction of justice. The executives are heard making what seem to be plans to destroy evidence in the lawsuit.

ROBERT ULRICH: (tape comments as shown on screen) We're gonna purge the s–t out of these books, though.

CHARLAYNE HUNTER-GAULT: Texaco responded by cutting off two of the executives who are now retired. Two other executives, still with the company, have been suspended with pay. Texaco's CEO Peter Bijur.

PETER BIJUR, CEO, Texaco: (Nightline) It is incredible to me that any managers or executives within our company had the gall, the intolerance, the insensitivity, to say the things that they said.

CHARLAYNE HUNTER-GAULT: Yesterday, there was a new twist. Outside investigators, hired by Texaco and using an enhanced digital copy of the recording, concluded that Ulrich never used a racial slur. Their version of one key paragraph reads: "I'm still struggling with Hanukkah, and now we have Kwanza–I mean, I lost Christmas, poor St. Nicholas–they"–expletive deleted–"all over his beard." Texaco's CEO Bijur said the latest interpretation merely set the record straight, but he said that they do not change the categorically unacceptable context and tone of these conversations.

CHARLAYNE HUNTER-GAULT: Now, a discussion of the Texaco case and its wider implications. For that, we have Michael Armstrong, a Manhattan lawyer who was hired by Texaco to conduct an extensive investigation into the matter; Theodore Shaw is associate director counsel of the NAACP Legal Defense and Educational Fund; Michael Losey is president and CEO of the Society for Human Resource Management, an organization representing human resource executives worldwide; and Cyrus Mehri is a lawyer for the plaintiffs. And starting with you, Mr. Mehri, do the tapes set the record straight about the remarks, the racist remarks that were made?

CYRUS MEHRI, Texaco Plaintiffs' Attorney: We don't agree with Mr. Armstrong's version of the tapes. What we do agree with–

CHARLAYNE HUNTER-GAULT: I guess I should say the alleged racist remarks. I'm sorry.

MR. MEHRI: What we do agree with is Mr. Bijur's statement that this–that the tone and context and language of the tapes, even under Mr. Armstrong's digitized version, is completely unacceptable and intolerable.

What these tapes have shown and they've confirmed what we've heard from people around the country, such as Jimmy Porter in California, who's was called orangutang, Cheryl Joseph, who received from her boss a cake on her birthday when she was pregnant which had the picture of a pregnant woman and then said, "It must have been the watermelon seeds."

It confirms what Mike Masio, a Caucasian manager in Denver, who was told that he should fire a black woman for bringing an EEO claim. And when he resisted, his boss told him, well, we treat niggers differently down here in Texas. These tapes have confirmed the widespread feeling of class members and witnesses around the country that Texaco is a hostile place for African-Americans, Mr. Armstrong, the tapes confirm that?

MICHAEL ARMSTRONG, Texaco Attorney: (New York) Well, I made no judgment, and I was not retained to make any judgment with respect to the merits of the lawsuit. The plaintiffs claim one thing; the company claims another, and apparently they're moving to a settlement. I don't know anything about that. I was told to look into specific allegations with respect to specific tapes and specific transcripts of those tapes.

When we got the tapes, we professionally enhanced them, using the modern techniques, and made them clearer. When we made them clearer, it became apparent that certain things that were apparently on the tapes weren't there, and we gave our opinion with respect to those issues.

CHARLAYNE HUNTER-GAULT: Can you just briefly–

MR. ARMSTRONG: We haven't completed our investigation of the question of document destruction or anything like that.

CHARLAYNE HUNTER-GAULT: All right. What did you find, though, that was purported to be there that wasn't?

MR. ARMSTRONG: Well, the "n" word–nigger–was, uh, supposedly stated by Mr. Ulrich, and that is simply not there. Uh, we, uh–our experts say that. We had–we made the tapes available to any reporters who wanted to come in and listen to them and none of them disputed the–our conclusion. I don't think there's any question of the fact that word wasn't there for whatever that use–that is–

CHARLAYNE HUNTER-GAULT: And what about the black jellybeans? What explanation is there for that?

MR. ARMSTRONG: The question of the black jellybeans is whether the statement was a–was meant as a racial slur or not. The lawyer for Mr. Ulrich says it was not and points to diversity training where jellybeans of different colors are used as an example and said that that's what he was referring to. When we look at the tape, the enhanced version seems to, uh, corroborate that by saying that when it was introduced, when the black jellybean reference was introduced, it was introduced by Mr. Ulrich as saying, uh, we don't have black jellybeans or green, differentiating in the colors, as opposed to saying all black jellybeans agree, as was on the original tape, and then the conversation that goes on–in context–fully two or three phrases–the whole black jellybean reference is only two or three phrases–indicates that Ulrich seems not to be meaning any racial slur by the reference.

There is a remark in there by Lundwall, where he says–interrupts Ulrich to say, "Well, all black jellybeans stick to the bottom of the bag," and that could be Lundwall is the fellah who's taping the conversation.

CHARLAYNE HUNTER-GAULT: But you don't know what that means? You haven't determined–

MR. ARMSTRONG: You can interpret it yourself. I mean, it could mean–it could mean that– that unfortunately blacks are stuck to the bottom of the bag by the way our society forces them to be there. It could mean other things–I don't know–but in any event, Lundwall was the fellow who was surreptitiously taping these conversations. This wasn't done as part of–to make minutes at a meeting.

This was a surreptitious tape in what may have been a conversation just between these two people. We don't know. Now, we make no judgment as to–as to what remains. We just felt that this time it was necessary to lower the rhetoric by removing the terribly, terribly offensive references that seemed to have been made, and then what was really said can be judged on the merits.

CHARLAYNE HUNTER-GAULT: Mr. Mehri, how does the–you mentioned the remark by–or the, more or less, apology by the CEO, Mr. Bijur. How significant is that in terms of the whole issue that you now feel is the most important in this matter, the issue of hiring and promotion or promotion?

MR. MEHRI: If and when this case goes to trial, we're going to be bringing forward statistical data that is going to show that there is a wide disparity between Caucasians and African- Americans, where African-Americans have been underpaid by tens of millions of dollars over the last several years. We're going to be bringing forward anecdotal evidence, such as the type I mentioned earlier from around the country, and the fundamental problems at Texaco are that there's a company-wide systemic problem of discrimination against African-Americans.

For example, their performance evaluation system, which is the cornerstone of all promotions and pay decisions, has been held not only by allegations by us, but by the EEOC, as being invalid, and, therefore, every evaluation that has been made over the last several years has been considered invalid. And finally, what we have is a secret promotion system and a secret bonus system at Texaco that is used widespread as a way of keeping the African-Americans behind the Caucasians.

CHARLAYNE HUNTER-GAULT: Mr. Armstrong, that was not in your specific mandate, but do you have a general reaction to what you just heard.

MR. ARMSTRONG: I really don't think it's appropriate for me to react to the allegations in a lawsuit made by the plaintiffs. Texaco has its side. I have nothing to do with that lawsuit, so I'm sorry I can't be much help.

CHARLAYNE HUNTER-GAULT: Right. Ted Shaw in New York, the NAACP's Kweisi Mfume said today that the language allegedly used was symptomatic of a larger mood of intolerance that is too often given comfort in corporate America. Is he right?

THEODORE M. SHAW, NACCP Legal Defense Fund: (New York) Well, I think that it would be a total mistake if we were to fall into the trap of evaluating the merits of this case by determining whether or not the term "nigger" was actually used. He's right that the underlying actions, the practices, and the policies of Texaco are really what–that's what should be at issue here. These statements that were alleged to be made are consistent with the allegations in the complaint about the actual discrimination. So, uh–I think that's what we need to focus on.

CHARLAYNE HUNTER-GAULT: But my question is: Is this situation unique, or is this–

MR. SHAW: No, it's not unique.

CHARLAYNE HUNTER-GAULT: –as Kweisi Mfume was suggesting–rampant throughout corporate America?

MR. SHAW: Well, I can answer the question this way. The Legal Defense Fund receives thousands upon thousands of phone calls and requests for assistance in writing on an annual basis, uh, alleging that discrimination has been taking place within the corporate environment. We can only do a small portion of the number of cases that we're asked to take on, so that leads me to conclude that this is a problem that is more systemic than what people care to admit.


MR. SHAW: And this is a problem that should receive nationwide attention because it's a nationwide problem.

CHARLAYNE HUNTER-GAULT: Nationwide problem, Mr. Losey?

MICHAEL LOSEY, Society for Human Resource Management: I would have to disagree. It's not a nationwide problem. If so, why the outrage? Why do so many people recognize this as inconsistent with what they see in their community, what they see as their company policy where they work, what they see as a practice? It jumps off the table if these accusations are anywhere close to correct that they're inappropriate.

MR. SHAW: Yeah. It's terribly naive to think that, uh, the one case in which somebody spills the beans–if I can use that term–uh–and talks about what happened within this all white-male conversation is the only example of this happening. Now, when I say this is a nationwide problem, that doesn't mean that every corporation, every company is engaging in racial discrimination.

What it does mean is that there is a much broader problem than what we tend to admit these days at a time in which the general public discourse on issues of race suggests that the only people who are being victimized by racial discrimination are the white males. Our complaints and our cases, the cases we litigate simply belie that contention, and it would be a terrible mistake to isolate this and say that this is–uh–one instance which is unrelated to anything that happens elsewhere. That's terribly naive.

CHARLAYNE HUNTER-GAULT: Mr. Mehri, what's your–

MR. SHAW: But people are going to jump to do that.

CHARLAYNE HUNTER-GAULT: What's your take on that?

MR. MEHRI: Texaco is a laggard among laggards. Texaco is a place that has a good old boy network that's even been recognized by their EEO officer who came on a couple of years ago. Early on in this case, we developed a chart that just showed how Texaco compared with other peer companies in terms of diversity commitments. Texaco didn't–

CHARLAYNE HUNTER-GAULT: I'm not sure that can be seen, or we–

MR. MEHRI: But Texaco doesn't even have the basic building-block programs, such as mentoring, diversity training, evaluating managers based on their diversity, compliance, and commitment. Texaco is far behind its peers.

CHARLAYNE HUNTER-GAULT: But you heard what Mr. Losey said, that Texaco was an aberration.

MR. MEHRI: Texaco is indicative of what's happening across the country, but just like what's happened in different other periods of time before, uh, this is going to be a landmark case, and a new paradigm is going to have to be set, where Texaco is going to have to set the standard. They're not going to be the worst. They're going to have to be not only the best in the oil industry, they're going to have to be the best in corporate America and set a new standard if they want this case resolved.

CHARLAYNE HUNTER-GAULT: Mr. Armstrong, I know, again, that you have a specific mandate here, but what is your sense about–having heard and being familiar with the complaints against Texaco- -do you think that this is aberrational, this is unique to Texaco?

MR. ARMSTRONG: (clearing throat) Well, I hate to duck again. I–I can only say that my experience with the company is that, for one thing, they hired me. And they asked me to look at these–at these allegations, and they didn't tell me to come out any particular way. I have a background that indicates that, I think, that I would–I would come out the right way. I'm counsel to the New York Urban League. I was a member of the NAACP in 1950.

CHARLAYNE HUNTER-GAULT: So what are you saying, that Texaco is trying to do the right thing?

MR. ARMSTRONG: All I know is that people I've seen who have dealt with me have–have told me that they want to–they want to know it as it is. They want to know what really is true, because they say to me–and appear to be very sincere–that they want to do something about it, and if there is a problem, they want to know about it. And–and there hasn't been any interference with what I have been trying to do, I can't judge the statistics that–that are involved in the lawsuit or the merits of the complaint. I–you asked me, and I will tell you that I observe that the people who have set me to my task seem to me to be very sincere, and they want me to do my job. And I'm going to do it.

CHARLAYNE HUNTER-GAULT: Mr. Mehri, is this case going to be settled, do you think?

MR. MEHRI: Mr. Bijur has made a lot of statements in the press. We have a policy–we don't talk about settlement–but if Mr. Bijur is serious, he should be calling us up and telling us directly what he's telling–talking about with the press. We are right now preparing for a hearing in ten days or so about the destruction of documents that have taken place to obstruct justice here. After that, we're going to be moving to get the class certified, shortly thereafter, and then we will be preparing for trial.

CHARLAYNE HUNTER-GAULT: Mr. Shaw, what do you think the solution is, not only to Texaco but to these other things that you've described? Is it more lawsuits?

MR. SHAW: Well, I think that lawsuits are always a last resort, but they are a necessary weapon in the arsenal against racial discrimination. Obviously, there are companies that have implemented affirmative action policies, have sought diversity, have been fair in the treatment of employees, and I think that those companies ought to be sought out and emulated. This company has been caught with its pants down. I hope it doesn't engage in a now–an effort to try to tell us that we didn't hear what we heard and disaggregate the evidence. I think that this company needs to get its act together and set an example.

CHARLAYNE HUNTER-GAULT: Briefly, Mr. Losey, what do you think the answer is, not just to Texaco but generally?

MR. LOSEY: Generally, this is a wake-up call. The question is the equality of our nation, the diversity, are these soft issues? When CEO's are worried about global competition and national competition, and shareholder equity, sometimes these things don't get the priority. I agree with other spokesmen. This, I can guarantee you–the Texaco chairman is doing little more this week than concentrating on this. It can bring the focus of the corporation to an abrupt halt and interrupt important activity. Clearly, this is a wake-up call.

CHARLAYNE HUNTER-GAULT: All right, gentlemen. Thank you.