State Blames Red Onion’s Minority Ban on President

The Red Onion restaurant chain, under fire for the last year for barring minorities from its discos, did so on direct orders of company President Ronald Newman, a state investigation has concluded.

Documents from the state Department of Alcoholic Beverage Control, which recently announced it will briefly suspend Red Onion liquor licenses at five of its 14 locations, said “active racial discrimination has been practiced as a matter of plan and design for at least 10 years within this corporate family” and “appears to be the result of a conspiracy from the corporate president. . . . “

The discrimination filtered down from Newman “through a strict chain of command to his subordinate managers, down to the lower level employees,” ABC senior investigator Robert L. Durham wrote in a summary of the agency’s several-hundred page report.

State officials launched an investigation of Red Onion admission practices after blacks, Middle Easterners and Latinos complained they had been denied entry to the chain’s discos for racial reasons. Eventually, several local and state agencies and the Federal Bureau of Investigation looked into the matter.

Newman, a 48-year-old Hermosa Beach entrepreneur, has denied that his Carson-based company discriminated against minorities. He has declined all interview requests since the allegations first surfaced last April.

According to state and federal reports reviewed by The Times, the ABC’s findings were supported by 12 Red Onion employees--including managers--and 70 minority patrons who told investigators they were denied entrance at Red Onion discotheques in Santa Ana, Fullerton, Riverside, Palm Desert and Lakewood.

“What we found was that there was discrimination from Newman right on down,” said John W. Thompson, assistant director of the ABC’s Southern Division. “I think this was truly a design of management to enhance the patronage of certain types of people. It turns out they went too far.”

Last September, Robert Leone, a 51-year-old former door host at the Red Onion in Palm Desert, told an ABC investigator that it was Newman who told him to limit the number of Latinos in the club on busy nights.

Approached by Newman

“Initially, I was not pressured to preclude minorities but in January or February, 1985, a Friday evening, I was approached by Ron Newman” regarding approximately 30 Latinos who were in the club, Leone said.

“He told me there were too many Mexicans . . . and that I was going to have to limit them on busy nights to 10 or 12. He said he didn’t want them taking over. He told me to use double ID, the dress code or anything to keep them out.

“I told him I couldn’t do it,” Leone explained, “and about a week and a half later, I was taken off the door and placed in the dining room where those duties are not required.”

A former Red Onion general manager told state and federal investigators that during her two years with the company there was “a policy of discrimination against blacks, Hispanics and minorities which was ordered by Newman and reasserted by district managers.

‘Nothing in Writing’

“There was nothing in writing--however, it was very clear to see what was going on during the day-to-day operations,” said the former manager who, when reached by a reporter, asked not to be named. “It was Newman’s logic that inasmuch as blacks and other minorities make up approximately 12% of the total population of the United States, that the clientele at any given time . . . should not consist of more than 12% non-whites.”

The former manager told investigators there were also comments in the Red Onion’s daily operation logs pertaining to the racial mix, noting that blacks were oftentimes referred to as “Norwegians” and that comments included “the room was too dark” and “looks like Africa in here tonight.”

She also told investigators that her colleagues “experienced a great amount of stress in having to daily think up ways and excuses to turn away minority customers” but that they carried out the bias policy “because they did not want to lose their jobs.”

Following news stories in The Times last April, dozens of minority customers told how they were stopped at the Red Onion’s disco door because the photo on their driver’s license did not look like them or they failed to meet the dress code. More than 50 of these people later filed complaints with local and state human rights organizations or sued the Southern California chain for discrimination.

Seen as Challenge

According to Newman’s associates, the Red Onion president views the various investigations, the civil lawsuits and the resulting publicity as a “challenge.”

“He sees this as an opportunity to make the company better,” said one associate, describing Newman as a tough-minded businessman.

Nathaniel Trives, the consultant Newman hired last summer to revamp the Red Onion’s hiring and training policies, added: “I’m not saying he’s admitted anything . . . but let’s face it, if a person is making a lot of money and all of a sudden he is charged with something that could put him out of business, then he has to see the handwriting on the wall and change his way of doing business.

“I think Ron was there in the fast track and did whatever he thought had to be done to keep those cash registers going,” Trives added. “I think he now realizes he can get out of the business of social management--of discriminating collectively and controlling crowds--and still be successful.”

Keeping His Promise

Trives said that Newman is “one of the best participants” in the cross-culture sensitivity training sessions that he has since instituted for the Red Onion’s approximately 2,000 employees and is keeping his promise to reach out to minorities through a scholarship program and efforts to buy products from minority vendors.