Red Onion Chief Ordered Bias Policy, State Says

The Red Onion restaurant chain, under fire for the past year for barring minorities from its discos, did so on the 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 5 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 that they had been denied entry to the chain’s discos for racial reasons. Eventually, several local and state agencies and the FBI looked into the matter.

Newman, a 48-year-old Hermosa Beach businessman, has denied that the Carson-based company discriminated against minorities.

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. “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.

‘Too Many Mexicans’

“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.”

Other former employees gave similar accounts. One 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.”

The ABC last month ordered 5- to 10-day liquor license suspensions at the Red Onions in Santa Ana, Fullerton, Riverside, Palm Desert and Lakewood. The suspensions will take effect in May. Also, under a settlement reached last year with the state Department of Fair Employment and Housing, the Red Onion agreed to pay $500 each to 39 people who complained that they were kept out because of racial bias. The company is also awaiting the outcome of the FBI investigation.