2 in Texaco Case Found Not Guilty

May 13 1998

As it appeared in the New York Times


Two former executives of Texaco Inc. who had been taped discussing the destruction of documents demanded in a racial-discrimination lawsuit against the company were found not guilty yesterday on charges they had tried to obstruct justice.

Lawyers for Richard Lundwall, the man who secretly recorded the meetings, and Robert Ulrich, the former treasurer of the big oil company, said the acquittals vindicated their argument that the two had done nothing illegal. But the verdict by the jury of eight men and four women in a Federal court in White Plains stunned and angered civil rights leaders, who said it was based on technicalities and sent a disturbing message about permissible behavior by corporate officers.

The jury foreman, Julius Sas, said in a telephone interview last night that the jury, which included one black woman, was initially split. But over four days, they decided that for several reasons, including the fact that gaps in the tapes created the possibility that comments could have been taken out of context, ”there was just too much doubt in our minds.”

At the time of their disclosure, the contents of the tapes, in which executives made disparaging comments about minority employees at Texaco, prompted boycotts of the company and raised broader questions about whether corporate America had been paying mere lip service to promoting diversity in the workplace.

Texaco responded by settling a race-discrimination case out of court for $176 million and creating a program to promote more minorities.

But the race-discrimination case also raised questions about potential criminal actions. Several passages on the tapes suggested that Mr. Ulrich and Mr. Lundwall had discussed hiding or destroying evidence sought by the employees who were suing the company for race discrimination.

Federal prosecutors brought charges, contending that the two men had violated ”due administration of justice” and had acted with ”corrupt intent” to destroy evidence.

Defense lawyers argued, however, that Mr. Lundwall and Mr. Ulrich had not intended to obstruct justice and had lacked legal guidance at the time about handling company documents. The lawyers also raised questions about the reliability of the tapes, made with a voice-activated recorder Mr. Lundwall kept in his jacket pocket during meetings in 1994 and 1995.

Many of the first listeners, including Peter I. Bijur, the chairman of the company, got the impression that Mr. Ulrich had said ”niggers,” when in fact he had not.

After the tape was subsequently enhanced by an investigator for Texaco, it was determined that Mr. Ulrich had said ”St. Nicholas” while making disparaging comments about Kwanzaa, an African-American harvest festival celebrated around Christmastime. That passage was not played to the jury because it was deemed too prejudicial.

Jonathan Rosner, a lawyer representing Mr. Ulrich, said the tapes had 517 interruptions, making them ”utterly untrustworthy.” He added, ”A man should not forfeit his freedom on such flimsy evidence.”

Mr. Lundwall’s lawyer, Ethan A. Levin-Epstein, said that at the time the documents were destroyed, no court order had been issued for them.

He argued that this was the first time in the 166 years since Congress made obstruction of justice a Federal crime that prosecutors had sought a conviction ”when there was no subpoena outstanding” for documents. However, lawyers for the plaintiffs in the discrimination case had requested Texaco documents.

In a telephone interview yesterday, Mr. Ulrich, who testified during the three-week trial, said: ”I’m very happy this is behind me. It has been a long ordeal of 18 months that I’ve been suffering through. I’m going to go play golf.”

Mr. Lundwall, who did not testify, said he would let the acquittal sink in for a day or two before thinking about his next steps.

”I have not been paying much attention to my future,” he said. He added that he considered it bizarre that he was on trial because he had made the tapes himself and then proceeded to make them public.

”Unless you are some sort of psychotic, you just don’t go doing that,” he said.

The two men had faced up to 10 years in prison if they had been convicted of all charges.

Texaco and its outside counsel declined to comment. Bari-Ellen Roberts, one of the lead plaintiffs in the race-discrimination suit against Texaco, did not return a telephone call seeking comment.

The Rev. Jesse Jackson said yesterday that ”this verdict is as bizarre to me as the verdict after the taping of the Rodney King beating.”

”What we’re seeing,” he added, ”is a shifting from the effect of what was done, which is to deny justice, to a technicality. A technicality is not morality, and it does nothing to detoxify the environment to deter this kind of conduct in the future.”

Barbara Arnwine, executive director of the Lawyers Committee for Civil Rights Under the Law, based in Washington, said she was ”disgusted” by the verdict.

”You can have all the disputes you want about the words on the tape,” she said, ”but there is no disputing their tone and what the executives were trying to do.”

John C. Coffee Jr., a professor at the Columbia Law School, said that considering the nature of the case, he could understand that a jury might find the issues raised to be a ”hopelessly gray area,” particularly because the documents in question were not absolutely central to the case.

But Cyrus Mehri, one of the plaintiffs’ lawyers in the race-discrimination case, said that the withholding of documents had ”denied our plaintiffs a level playing field.”

In an interview published last year, Mr. Lundwall, 56, said he had begun using the tape recorder to protect himself in the event that he was later blamed for any trouble Texaco encountered. Such tape recordings are legal in New York State. Mr. Lundwall turned the tapes over to plaintiffs in the race-discrimination suit after losing his job at Texaco in the summer of 1996.

He had consulted other lawyers in the hope of bringing an age-discrimination suit against the company but had been turned away.

In the interview published last year, Mr. Lundwall said that he thought the tapes could be a ”quid pro quo” that he could provide the plaintiffs in exchange for gaining representation for his own case.

He said that when the plaintiffs’ lawyers declined to represent him, he still gave them the tapes.

Laura Sager, professor of clinical law at the New York University School of Law, said she was concerned that the verdict yesterday would promote insufficient guidance from lawyers as a new catch-all defense in these kinds of cases.

”Will this verdict be an incentive for lawyers not to be very clear about what needs to be done in discovery for a civil case?,” she said. ”I think that is the main danger.”

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