U.S. charges ex-Texaco aide who provided bias evidence Arrest appears aimed at getting him to testify


The former Texaco executive who recorded senior company officers belittling minority groups and planning the destruction of documents that had been demanded in a discrimination lawsuit was charged yesterday with obstruction of justice.

The charge is the sharpest turnaround yet in the fortunes of the executive, Richard A. Lundwall, who until August was an executive in Texaco Inc.'s finance department.

It was Lundwall who, after he was forced out of Texaco, turned the tape recordings over to plaintiffs' lawyers in the discrimination suit. Those recordings set off a furor about the company's relations with minorities, and led to last week's record $176.1 million settlement of the 2-year-old bias suit.

"It's truly ironic that the only person charged so far in this case is the person who came forward," said Christopher Riley, one of Lundwall's lawyers. "It sends a very negative message."

But legal experts said the charge was structured more like a message from the government to Lundwall about the need to strike a deal in a federal investigation into obstruction of justice by Texaco officials in the discrimination case.

Lundwall, who has not yet agreed to provide testimony in the case, is the first Texaco executive to be charged in the matter and the lowest-level executive to participate in the conversations.

Prosecutors did not seek an indictment against Lundwall from the grand jury investigating the Texaco matter -- a typical move in such a case. Instead, an FBI agent swore out a complaint, which was used to arrest Lundwall.

That approach is a strong sign that prosecutors were moving rapidly to bring the charge for strategic purposes, rather than carefully drafting a criminal indictment to bring a case to trial.

"This is an invitation to have this fellow come in and develop some kind of working relationship with the U.S. attorney," said Harvey Pitt, a prominent Washington lawyer who has handled a number of prominent white-collar cases. "Otherwise, I don't know why they would be doing this in this order and in this fashion."

Stanley J. Okula Jr., an assistant U.S. attorney handling the case, declined comment.

Legal experts said the charge against Lundwall represented a slight expansion of the law on obstruction. Lundwall is not charged with hindering a governmental investigation, the crime that is usually characterized as obstruction. Nor did he directly mislead a judge by claiming personally to the court that the documents did not exist. That type of act has resulted in an obstruction charge in other cases.

Instead, Lundwall was charged with actions taken outside of court, in which he is said to have tried to impede the discovery process in a civil lawsuit.

"The government is pushing the envelope here, but it's not an unforeseeable or unreasonable expansion," said John C. Coffee Jr., a professor at Columbia University Law School. "But it's not the classic obstruction-of-justice case."

People with knowledge of the situation said that Lundwall's lawyers had been hoping to win immunity for their client before he would agree to cooperate, but that their efforts had not worked.

It was not clear yesterday whether Lundwall had made an offer of proof, known as a proffer, about testimony he could provide to aid in the investigation of others. He has already provided the grand jury with documents in response to a subpoena, including one memo indicating that a Texaco lawyer may have advised him on how to avoid turning over a document to the plaintiffs.

The charge was a shock for Lundwall, who was said to have been unaware that the government intended to arrest him.

Indeed, Lundwall was scheduled to appear this morning before the grand jury in White Plains, N.Y., even though his lawyers had informed the government that he would invoke his right against self-incrimination.

Shortly before Lundwall arrived for the grand jury proceeding, he learned that a warrant had been sworn out for his arrest.

Lundwall surrendered at the federal marshal's office in White Plains. He was handcuffed temporarily and was booked on the obstruction charge.

A bail hearing was then held before a federal magistrate in White Plains. Lundwall, dressed in a gray suit, said little during the hearing, and was released on a $50,000 unsecured bond. A hearing was set for Dec. 18, by which point the government has to bring an indictment.

The criminal complaint charges Lundwall with one count of obstruction of justice, which is punishable by a maximum of 10 years in prison and a fine of $250,000.

In an affidavit, FBI agent Joseph Mangan testified that Lundwall had told plaintiffs' lawyers in the discrimination case that he had participated in the destruction of documents they had demanded. That was done by shredding some pages and deleting material from others.

Also, the affidavit said, certain finance department executives were instructed to say that they had not retained copies of records that had in fact been distributed to them. The affidavit does not identify any of those executives.

The only other executive referred to in the affidavit, although only by title and not by name, is the former company treasurer. That executive, Robert Ulrich, was among the officials whose conversations were captured on the recordings, which Lundwall made to help him keep minutes of meetings.

The affidavit cites an instance on a tape, which was recorded in August 1994, in which Ulrich indicated to Lundwall that he should not turn over certain records to the plaintiffs and Lundwall agreed. Lundwall later said on the tape, "Let me shred this thing," the affidavit said. The plaintiffs never received the document.

Pub Date: 11/20/96

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