Texaco: A Series Of Racial Horror Stories A former employee of the oil giant describes a corporate culture that treated minority workers to pay discrimination, periodic harassment, and outright ridicule.
By Anne Fisher

(FORTUNE Magazine) – When the trial of former senior Texaco executives Richard Lundwall and Robert Ulrich--both indicted for obstruction of justice and conspiracy--begins this spring, the two had better hope that jurors haven't read this book. Seems unlikely. Everybody who reads newspapers may remember excerpts, leaked to the press in late 1996, from tape recordings of high-level Texaco meetings. That's where black employees were called "black jelly beans" (and worse epithets that I won't repeat), and where managers spoke of destroying documents crucial to the race-discrimination suit that had been filed against the company. In these pages, plaintiff Bari-Ellen Roberts (who is expected to testify against Ulrich and Lundwall) tells the rest of the story.

And what a story it is. Roberts came to Texaco from Chase Manhattan in 1990 as a senior pension fund manager, against her better judgment. A colleague who knew the oil company inside out told her: "Watch your back. I know those Texaco guys, and I don't trust them. They're a bunch of jerks." Based on the evidence here presented, truer words were never spoken. Roberts gradually came to realize that while Texaco talked a good game about work force diversity, the reality was something else.

The cumulative effect of the dozens of examples Roberts gives of mistreatment of black employees is enough to put you off your feed, but here are a few examples: When word spread through Texaco headquarters that a black woman was sitting in a coveted two-window office, dozens of people came by to gawk. Said one staffer: "Well, Jesus Christ, I never thought I'd live to see the day when a black woman had an office at Texaco." In a meeting, David Keough, a senior assistant treasurer, called Roberts a "little colored girl." After she earned an exemplary performance review, it was mysteriously erased and replaced with a lower score. No specific reasons were ever given--except that the executive responsible had been heard to refer to Roberts as "uppity." Meanwhile, Roberts learned from personnel records that hundreds of minority workers throughout the company were systematically paid less than the minimum salary for their job levels--which should have come as no particular surprise in a culture where a division vice president dressed up as black sambo for a company party.

After a long legal battle whose twists and turns make compelling reading, Texaco agreed to pay the plaintiffs $176 million, the highest race-discrimination award in history. Anyone who has participated in a high-stakes lawsuit will appreciate Roberts' account of precisely how that figure was arrived at. Suffice it to say that it was apparently Texaco's own stubbornness that cost a cool $146 million of the total. At one memorable point in the proceedings, just $30 million would have done it.

Maybe the real lesson here is for companies that believe they've got this diversity thing licked: Be careful whom you put in charge of human resources. Roberts writes that she and her fellow plaintiffs might never have filed suit if not for a bully named John Ambler, who asked for a list of proposals on diversity and then trashed Roberts' suggestions (which were cautious to a fault: why not recruit at a black college or two?) as the "militant" rantings of "Black Panthers." Ambler had little or no human resources training. He was given the job because after three decades at Texaco, no one was quite sure where else to put him.

What's remarkable is how calmly, and with what generosity, Roberts unfolds this ugly tale. Her account of her pre-Texaco career gives credit to mentors who were (mostly) white and male. And, in a typical and oddly moving passage, she recalls a conversation with her former Texaco boss who--shortly before the infamous tapes were made public--wanted to know whether he could be heard talking on them. Roberts answered, "Do you think you could be?" In reply, she writes, "he lowered his head into his hands and spoke in an agonized voice so low I could barely hear him. 'I don't know. I don't know.'

"I got up and left him to deal with his misery. We were even. I almost let myself feel sorry for him--but not quite."