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Texaco Says Epithet Wasn't Used

Workplace: Corporation still decries 'unacceptable' tone of taped conversation. Settlement talks held on racial bias suit.


NEW YORK — Moving on several fronts to confront its racial scandal, Texaco Inc. held settlement talks in a discrimination lawsuit, met with national civil rights leaders and released a report by an outside investigator Monday saying that a former executive did not use a racial epithet in the secret tape recording that triggered the controversy.

Michael Armstrong, the former federal prosecutor hired by Texaco to investigate the scandal, reported that analysis of a digitally enhanced version of the August 1994 tape recording shows that, contrary to a court transcript of the tape, then-Treasurer Robert W. Ulrich did not use the word "niggers" in reference to African American employees.

Ulrich, in an expletive-laced discussion of his difficulties in dealing with employee holidays other than Christmas, mentioned "St. Nicholas," Armstrong said in his report, which Texaco released Monday. It was the name "Nicholas" that was mistaken for "niggers" on the transcript filed by plaintiffs in the suit, Armstrong said.

Texaco Chairman Peter I. Bijur, in a statement accompanying the report, said, "These preliminary findings merely set the record straight as to the exact words spoken in the conversations, but they do not change the categorically unacceptable context and tone of those conversations."

Lawyers for the plaintiffs in the $71-million discrimination suit quickly agreed.

Even if Armstrong's version of the tape is accepted at face value, "it doesn't detract one iota from the racial hostility and animus that is all over the tape," said Daniel L. Berger, a New York-based attorney for the six Texaco employees who brought the suit.

The thrust of the class action--that the six employees and nearly 1,400 fellow black professionals and middle managers at Texaco were systematically denied job advancement because of their race--is amply supported even by the new transcript, Berger said.

Still undisputed are portions of the conversation where Ulrich and three other Texaco executives allegedly plotted to hide or destroy documents being sought by the plaintiffs in the suit, he added.

Berger declined to discuss settlement negotiations. But someone with knowledge of the situation said that if a settlement does not come this week, there probably will be no further discussion until Nov. 22, when the judge presiding over the lawsuit has scheduled a hearing on the possible destruction of evidence.

A federal grand jury in Texaco's corporate hometown of White Plains, N.Y., looking into possible criminal wrongdoing by the executives at the meeting was expected to issue an indictment in the case as early as today, the Wall Street Journal reported. A spokesman for the office of the U.S. attorney for the Southern District of New York, which is handling the criminal probe, did not return calls for comment Monday.

Bijur, who last week repudiated the comments of the executives on the tape, is meeting with civil rights leaders to reaffirm his commitment to improving Texaco's minority-hiring and advancement performance. He already has met with the heads of the National Urban League and the United Negro College Fund, a spokesman said.

Today, Bijur is scheduled to meet separately with the Rev. Jesse Jackson and Kweisi Mfume, president of the National Assn. for the Advancement of Colored People.

Over the weekend, African American protesters gathered at a Los Angeles Texaco station to urge a national boycott of Texaco products.

Meanwhile on Monday, Texaco stock, bouncing back from last week's losses, gained $1.375 to close at $97.25 in trading on the New York Stock Exchange. But it remained more than $2 below the pre-scandal price.

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