UNITED STATES: Texaco Racial Flap Continues Despite Settlement

By Farhan Haq Reprint | | Print |

NEW YORK, Nov 20 1996 (IPS) - A tape recording in which white business executives call African Americans “black jelly beans” has become a symbol of boardroom racism as powerful as the videotaped beating of motorist Rodney King was of police harassment.

Despite a 176-million-dollar settlement last Friday of a racial discrimination case in which the tape played a major role, the oil conglomerate Texaco remains troubled by charges of top-level racism, and vulnerable to a consumer boycott.

Faced by a boycott called by civil rights leader and former presidential candidate Jesse Jackson and a swift drop in Texaco stock prices — which cost the company’s shareholders roughly one billion dollars in just a week — Texaco has come to symbolise how corporations must respond more quickly to charges of racism.

Texaco Chief Executive Officer Peter Bijur last week agreed to settle a class-action suit in which six black current and former Texaco employees charged the company with racial discrimination in hiring and salary policies. Since then, Bijur has vowed to punish any discriminatory practises at Texaco.

But the managements’ best efforts have not assuaged African Americans angered by the revelation this month that top Texaco executives, recorded on tape by an employee who was since fired, may have called blacks “jelly beans”, “niggers” and “porch monkeys”.

In the taped conversation, two employees who have since resigned from Texaco discuss how, in one employee’s words, “the black jelly beans always seem to wind up at the bottom.” The reference is to the class-action suit, in which black employees charged that the oil company had a “glass ceiling” above which African Americans and other minorities could not obtain high- paying positions.

One Texaco director was recorded worrying about making concessions on the African-American holiday Kwanzaa because of pressure from “the niggers.” Texaco lawyers have since said that a voice analysis of the tape proves the actual words used were “St. Nicholas,” in reference to Santa Claus — a contention many black leaders find unlikely.

The former executive who recorded the senior officers belittling blacks and planning the destruction of documents that had been demanded in the lawsuit was charged by Tuesday with obstruction of justice. Legal experts say the move was designed by federal authorities to secure his cooperation in their probe of the company.

The tape recording was just the latest incident involving Texaco, a company which has faced several previous discrimination charges. Just last June, the federal Equal Employment Opportunity Commission found reasonable cause that Texaco discriminated among salary levels for employees “because of their race.”

Texaco responded swiftly to the latest scandal. The company agreed last week to pay 115 million dollars to the 1,400 black employees participating in the civil suit, 26 million dollars in pay raises for black employees, and 35 million dollars for diversity training.

More important, the settlement provides for a seven-member task force to report directly to Texaco’s board of directors twice a year on how to reform the company’s employment policies for minorities.

“The independent task force we have created will not only have the power to eradicate institutional discrimination at Texaco, but also provide a model for corporate America to follow,” Max Berger, a lawyer for the plaintiffs, said in a statement. “We should all pray for its success.”

But some black leaders remain unconvinced that Texaco should be let off the hook so easily.

“The mission is not complete,” Jesse Jackson said after the settlement was announced. “We must keep the pressure on.” Jackson is continuing his call for a boycott, particularly by African Americans, of all Texaco gas stations.

“A monetary settlement is not a solution, nor should it be viewed as one,” said New York City Councilmember Virginia Fields. “Texaco must continue to negotiate ways to bring meaningful changes within the company. Anything short of that is just playing games.”

What many black organisations, including the National Association for the Advancement of Coloured People (NAACP), fear is that Texaco could return to business as usual after paying the settlement. Many leaders want the scandal to provoke a larger discussion about discrimination in U.S. boardrooms in general.

Noting the significance of the tape recording in casting Texaco in a bad light, black columnist William Raspberry asked in the Washington Post, “How much of a fuss would the top people be making if the embarrassing behaviour could have been kept secret?”

None at all, some black officials argue.

“I think you saw a resolution of the Texaco incident as timely as it was because the tapes were there,” Fields said. “You probably will see the same comments in many boardrooms. But the fact that it was heard on a tape brings it to light in a different way.”

Some black officials argue that the subsequent fallout is more a cynical manouevre over public relations than a tangible effort to address racial discrimination.

“You have had Jesse Jackson shaking down Texaco for millions of dollars because of some offensive remarks,” said one official, speaking on condition of anonymity. “Then you have him saying that that’s not good enough, and asking for more money.”

Far more than pressure from black leaders, however, the drop in Texaco’s stock price convinced Bijur to respond quickly to the scandal, which erupted after the executive who made the recordings turned the tapes over to plaintiffs’ lawyers after he was forced out of the company.

Texaco’s stock price fell by three dollars a share in the days following the disclosure of the “jelly beans” comments in the media.

For the black employees at the centre of the drama, the scandal has only demonstrated how pervasive corporate racism can be.

Joe Leaphart, an in-house lawyer fired by Texaco in 1993, has accused the company of creating an atmosphere of fear among black employees who speak out against discrimination. He argued that the conglomerate was “among the worst” offenders in the oil industry.

Now, Fields said she hopes, the Texaco affair “will cause other corporations to look at their own boards” to root out racism.