Texaco probed for alleged evidence tampering Subpoenas seek tapes said to contain racial slurs by executives

Legal affairs

November 05, 1996|By NEW YORK TIMES NEWS SERVICE

NEW YORK -- An unfolding scandal at Texaco Inc. widened yesterday as federal prosecutors in White Plains opened a criminal investigation to determine whether senior company executives illegally destroyed documents sought in a discrimination lawsuit, people with knowledge of the situation said.

Already, subpoenas have been issued seeking a number of pieces of evidence including original audio tapes secretly recorded by a former Texaco employee. In the tapes, senior executives can be heard discussing plans to shred records and belittling the company's minority employees with racial epithets.

The government action came after an article in the New York Times yesterday reported on the existence of the tapes -- in which senior Texaco executives can be heard referring to minority employees as "black jelly beans" and other racial epithets. The article quoted excerpts from the tapes contained in court records.

Investors reacted to the disclosures by selling Texaco's stock. The company's shares dropped 2.6 percent yesterday, closing at $97.625, down $2 in trading on the New York Stock Exchange.

At Texaco's corporate headquarters in White Plains, senior executives began an internal damage-control effort yesterday, aimed at assuring company employees that use of the words reported in the article was a violation of Texaco policy.

To a large degree, the company is in an unusual bind because it has yet to hear the tape recordings at the center of the controversy. The recordings, which were obtained by plaintiffs in the discrimination suit, are expected to be turned over to Texaco this week.

Still, Texaco officials went to great lengths yesterday to distance themselves from the words quoted in the Times, and to assure employees of Texaco's commitment to recruit and promote minority employees.

Peter I. Bijur, the company chairman, told employees he had put all of Texaco's programs for diversity and equal employment opportunity under immediate review. Bijur also instructed the company's human resources department to adopt new programs for attracting and keeping minority employees.

Bijur, who was described by a person at the company as "absolutely livid" about the words quoted from the tapes, made his statements in a videotaped presentation shown throughout Texaco yesterday.

"The rank insensitivity demonstrated in the taped remarks reported in today's New York Times offends me deeply," Bijur, visibly angry, said in the videotape. "This alleged behavior does not represent the way this company feels about any of our employees. This alleged behavior violates our code of conduct, our core values and the law."

In the videotape, Bijur said the company had begun an investigation using an outside lawyer, and stressed that Texaco would not shirk from unpleasant realities.

He added that if the investigation found the accusations accurate, disciplinary action, including termination, would be taken against the executives involved.

Already, some action has been taken against one executive who, according to the court papers, participated in the discussions and taped them. Richard Lundwall, the former senior coordinator for personnel services in Texaco's finance department who was laid off in August, was informed by letter that the company was suspending any payments to him under a pay plan for downsized executives.

In the letter, the company said that the actions recorded on tape by Lundwall, who turned the recording over to the plaintiffs, warranted his termination.

No action has been taken against the other executives heard on the tape, including Robert Ulrich, the former treasurer, and J. David Keough, the former senior assistant treasurer who now works as chief financial and administrative officer at a Texaco subsidiary, the company said.

Pub Date: 11/05/96

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