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Former Texaco Execs Found Innocent

May 12, 1998 GMT

WHITE PLAINS, N.Y. (AP) _ Richard Lundwall, the Texaco executive who created a racial scandal and got himself indicted by going public with embarrassing tape recordings, was found innocent Tuesday of obstruction of justice.

His former boss, retired Texaco treasurer Robert Ulrich, also was acquitted by a federal court jury in White Plains, N.Y.

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.

Lundwall, 56, of Danbury, Conn., and Ulrich, 64, of White Plains, were accused of plotting to hide or destroy Texaco documents that were being sought by black employees suing the company for race discrimination.

The obstruction of justice charges stemmed from two microcassettes Lundwall made on a voice-activated recorder in his jacket pocket at various gatherings of Texaco executives in 1994 and 1995.

Because the tapes showed company officers belittling blacks, and the first transcript erroneously included a racial epithet, the recordings created a scandal at the oil giant when they became public in November 1996.

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 were indicted and Keough was named an unindicted co-conspirator.

At the trial, prosecutors played extensive excerpts of the tapes, including several passages they said supported allegations Lundwall and Ulrich discussed how to hide documents that might help the black plaintiffs.

``We’re going to purge the ---- out of these books,″ Ulrich is heard saying. ``Shred ‘em and get rid of ’em,″ he says at another point.

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Lundwall says, ``Let me shred this thing and any other restricted versions like it.″

At one point, the sound of paper being torn can be heard on the tape.

The recording also revealed bitter remarks by the executives about plaintiffs in the discrimination case. They ``are both going to be held accountable,″ Ulrich says.

In closing arguments, prosecutor Stanley Okula said, ``The defendants’ own words are the very best proof of what they intended ... what they meant when they sat around the offices of Texaco and discussed shredding and getting rid of documents.″

Defense attorneys tried to show that Lundwall and Ulrich, who are not lawyers, had no intention of obstructing justice, but were not given the legal help they needed to understand what was required of them.

Lundwall’s lawyer, Ethan Levin-Epstein, also suggested that the fact that Lundwall went public with the tapes provided ``built-in reasonable doubt.″

``What criminal records the evidence of his guilt?″ he asked the jury.

Jonathan Rosner, Ulrich’s lawyer, brought out that there were more than 500 interruptions on the tapes, making them ``utterly untrustworthy.″

``A man should not forfeit his freedom on such flimsy evidence,″ Rosner said.

Lundwall did not testify.

Ulrich said on the stand that he had delegated responsibility for collecting documents for the lawsuit. His own taped comments about destroying documents, he said, were actually his plans for a new company policy.