2 Former Execs Acquitted in Texaco Case

Two former Texaco executives were acquitted Tuesday of trying to hide or destroy secretly made tapes that recorded company officials making disparaging remarks about black employees.

Richard Lundwall, 56, and Robert Ulrich, 64, were found not guilty of obstruction of justice, a crime that carries a sentence of up to 10 years in prison.

Lundwall, a former personnel manager, made the tapes at meetings of executives in 1994 and 1995. The tapes could have been used as evidence in a race discrimination case, which was eventually settled out of court.

Lundwall and Ulrich clapped their lawyers on the back, and their relatives hugged one another as the verdict was read. The jury had deliberated 21 hours over four days.

The tapes created a scandal when they were released in November 1996. They showed company officers belittling blacks, and the first transcript erroneously included a racial epithet.

In a passage the jury never heard--the judge said it was too prejudicial--Ulrich said: “I’m still struggling with Hanukkah, and now we have Kwanzaa. I mean, I lost Christmas, poor St. Nicholas, they [expletive] all over his beard.”

The company quickly settled the race case for a record $176 million, including the cost of programs to make Texaco more receptive to minorities. Texaco fired one executive--Assistant Treasurer David Keough--suspended another and cut off Lundwall’s and Ulrich’s retirement benefits to the extent legally possible.

But as the civil case faded, the criminal case began. Federal prosecutors decided that the behavior captured on Lundwall’s tapes was not merely a stonewalling of the discrimination suit but also a violation of the “due administration of justice.” Lundwall and Ulrich, former Texaco treasurer, were indicted and Keough was named an unindicted co-conspirator.