Ex-Texaco Executive Faces Criminal Charges

The former Texaco Inc. executive whose secret tape recordings touched off a racial scandal at the giant oil company became the first to face criminal charges Tuesday when a federal complaint accused him of obstruction of justice.

The complaint, unsealed at the U.S. District Court in Texaco’s corporate hometown of White Plains, N.Y., charges Richard A. Lundwall with concealing, withholding and destroying evidence sought by plaintiffs’ attorneys in a sweeping job discrimination lawsuit brought by black Texaco employees.

Texaco settled the case Friday for an estimated $176 million in cash and other consideration, the largest such settlement on record.

Although the complaint states that other unnamed Texaco executives participated in hiding or destroying records, only Lundwall has been charged. U.S. Atty. Mary Jo White, who is in charge of the grand jury investigation, said in a statement Tuesday that the probe is continuing.

“It’s truly ironic the only person under indictment is the person to come forward,” Christopher Riley, Lundwall’s attorney, said Tuesday. He said his client has cooperated with prosecutors.

Lundwall, 55, of Danbury, Conn., was a senior personnel manager in Texaco’s finance department when he taped an August 1994 meeting at which he and three other executives disparaged black workers and discussed hiding and destroying documents that Lundwall later acknowledged were at “the crux of the [discrimination] case,” according to the court complaint.

An FBI agent, whose testimony was the basis for the complaint, said Lundwall admitted that he and others had shredded portions of the documents being sought and had deleted handwritten comments from other records. Lundwall also said that one of the express purposes for the taped meetings was to review material requested in the lawsuit, the agent said.

Last summer, after Lundwall learned his job had been targeted for elimination in Texaco’s latest reorganization, he turned over his tapes to the plaintiffs’ attorneys. One of them, Washington-based Cyrus Mehri, said the tapes confirmed his suspicion that documents Texaco eventually handed over in the case had been “sanitized.”

Transcripts of the tapes filed in court by the plaintiffs’ lawyers quoted Texaco’s then-treasurer, Robert W. Ulrich, as calling black employees “niggers” and exhorting subordinates to “purge the s--- out of these books,” referring to records of meetings at which minority hiring and promotion practices were discussed.

The explosive transcripts triggered a crisis at Texaco, sparked the grand jury probe and forced the company to the negotiating table. Texaco Chairman Peter I. Bijur apologized publicly and promised to improve the company’s dealings with minority workers. Civil rights leaders called a boycott and threatened a stock divestiture campaign.

The public outcry was little diminished by an outside investigator’s report saying that computer-aided analysis of the tapes showed that the word “niggers” had never been used.

Lundwall was released Tuesday on $50,000 bond and ordered to remain in the area pending a preliminary heading on Dec. 18. If convicted, he faces up to 10 years in prison and $250,000 in fines, authorities said.

Ulrich’s lawyer, Jonathan L. Rosner, said his client has still not received a “target letter” from the government indicating that he is a subject of the criminal investigation.

Two current Texaco executives, J. David Keough and Peter Meade, also appeared on the tapes. Keough’s attorney did not return calls, and Meade, reached at home, declined to comment. Both have been suspended with pay from their jobs, pending completion of Texaco’s outside investigation.

Texaco has also suspended severance payments to Lundwall and health and insurance benefits to Ulrich, who retired last year.

Under Friday’s settlement of the civil suit, which must still be approved by the court, Texaco will pay a lump sum of $115 million to about 1,400 current and former employees and give pay raises of at least 10% to all black salaried employees. In the most extraordinary aspect of the settlement, Texaco also will create a powerful “equality and tolerance task force” giving the plaintiffs a say in personnel policy.

Times wire services contributed to this story.