Harvard: Look Into Texaco Holdings

The time has come for Harvard to seriously consider divesting from the Texaco Corporation. The recent scandal in which top Texaco executives were taped discussing their own discriminatory policies is only the latest evidence that the oil giant has been seriously lacking in institutional integrity.

Last week, Texaco board chair Peter I. Bijur settled a class-action lawsuit that had been filed several years ago by several black employees who claimed they were denied promotion opportunities because of their race. The corporation, which had previously been fighting the suit tooth and nail, offered the $176.1 million settlement only after a former Texaco executive disclosed a tape-recording he had made of a 1994 board meeting. On the recording, top Texaco brass discuss destroying evidence of hiring discrimination while using racially insulting language.

In addition to the cash settlement, Texaco has agreed to create an independent Equality and Tolerance Task Force that will be charged with ensuring that the company behaves itself in the future. Given that this Task Force will have the power to bring Texaco to court should the company fail to live up to its recommendations, it is conceivable that major improvements in the company's climate are inevitable.

Given this, it is possible to argue that Texaco has admitted its wrongdoing and begun to repair the damage it has wrought, and that no more action is necessary. However, the nature of Texaco's crime is so heinous and destructive to our communities and race relations in America that we must make it clear that its actions are not only illegal but also completely unacceptable to society in general. Otherwise, we run the risk of painting our anti-discrimination laws as hollow lip-service to racial equality that do not reflect the opinions of our citizens.

As if these domestic ills are not enough, Texaco also maintains operations in Burma, whose repressive military government has come under heavy fire in recent years. In fact, last year when former Director of Dining Services Michael P. Berry decided to remain with Coca-Cola instead of switching to Pepsi, part of his rationale was Pepsico's involvement in Burma. (And the loss of this $1,000,000 contract became part of Pepsico's subsequent decision to partially divest from the Asian country.)

And so we call for Harvard Corporation Committee on Shareholder Responsibility to begin immediate investigations into whether Harvard should rid itself of its Texaco holdings--a process that usually begins with a letter of concern sent to the corporation in question. We would like to see such a letter sent within the next month, if at all possible. We must stop just short of calling for immediate divestment because decisions of this magnitude must not be made rashly, but at this point we feel the onus is on Harvard to demonstrate to the community as soon as possible why it should not sell off its interest in Texaco.

This call for quick action on Harvard's part is especially important considering the history of apathy Texaco shareholders have shown in the past years. According to Time magazine, there has been evidence for years that Texaco discriminates in its hiring and promotion policies, most notably in a 1991 lawsuit in which a California jury awarded $17.6 million to a female Texaco employee who sued after the company denied her promotion and gave her job to a man, a reprimand last year by the Office of Federal Contract Compliance Programs for unfair employment practices at its Houston facility and an investigation by the Equal Employment Opportunity Commission in June that found reasonable cause to believe that Texaco discriminates against some blacks in the organization. In other words, the company's shareholders have had ample time to realize that there was something shady about its practices and yet have done nothing.

Divestment is never a decision to be made lightly, but the evidence has become overwhelming that Texaco is malignant and unjust in its actions. We need to send a clear message that its blatant prejudice and social irresponsibility will no longer go unnoticed. Harvard is in a prime position to take the first step.