Project X

After a Southwestern Bell manager saved a woman's life, the phone company celebrated him as a hero. After he complained about what he alleges were racist billing practices, it fired him.

Doug Hamilton, a 43-year-old Southwestern Bell manager, left work early on a wet, stormy October day in 1994 to attend a conference with his daughter's kindergarten teacher.

When the meeting ended, Hamilton began driving his wife and three young children home to Mesquite, but decided, two blocks from the house, to take a fateful detour.

His wife and children wanted to see the culvert under the Highway 80 service road near Town East Boulevard because they knew that when the city fails to close the floodgates--as it had that day--overflowing rainwater creates a dramatic whirlpool along the road.

"You know how it is," says Hamilton. "Cheap thrills for little kids."
As Hamilton steered his red Chevrolet Astro van toward the edge of the service road, Elisa Moore, a 29-year-old special-education teacher at The Notre Dame of Dallas School, was heading home to her apartment near the freeway. Moore drove her blue 1990 Mustang down the highway ramp--and straight into the flood.

The swirling waters drowned her engine. Then water began streaming into her car, rising first to her waist, then creeping up toward her neck. A rippling wave from a whirlpool spun the Mustang around. Moore didn't know how to swim. "I was terrified," she recalls.

With the engine dead, the panicked teacher could not open her electric door locks or lower her windows. The water continued to rise inside her car. She couldn't muster the strength to punch out the glass. Says Moore: "I had to assume I was going to die."

Then Moore looked out her window and noticed a man with an orange electrical cord tied around his body, swimming in the water and banging on the glass.

It was Doug Hamilton. Spotting Moore's bobbing Mustang, he had sent his wife Janet home to fetch an inner tube and all the electrical cords--he knew he didn't have any rope--that she could carry. When she returned, Hamilton handed one end of a 100-foot cord to a group of men, who had stopped by to see what the floods had wrought. "Whatever you do," Hamilton told them, "don't let go."

Then he waded into the chilly, chest-high waters while debris rushed by him. He yelled for Moore to open her car door, but she couldn't. Then--to this day Hamilton doesn't know exactly how--he pried the door open himself from the outside.

"Please don't let me die," Moore blurted.
"I don't intend to," Hamilton replied.

In the weeks following the rescue, the tale of Hamilton's heroics dominated the water-cooler conversation of his colleagues at the phone company's Dallas offices. When his Southwestern Bell bosses got wind of it, they nominated him for the company's highest honor, the Theodore N. Vail Award, which includes a $5,000 cash prize. The company had only conferred the distinction six times before.

Eager to bask in the glory of its employee's actions, Southwestern Bell even assigned a public-relations specialist to drum up publicity about the rescue. In the ensuing December 30 Dallas Morning News story, featured prominently on the front page of the "Mesquite" section, the Dallas-Fort Worth vice president and general manager for Southwestern Bell, Tom Morgan, sang Hamilton's praises. "He is a hero in every sense of the word," Morgan told the News.

Yet Doug Hamilton never received the Vail award. One of his superiors informed Hamilton in February 1995 that a Southwestern Bell award committee had decided he was "not worthy." Later that month, nearly five months after he had saved Moore's life, the telephone company--this time without publicity--fired him from his $47,000-a-year job.

Hamilton, who had never held another job since graduating from college, had worked for Southwestern Bell for 20 years. His bosses told him he was being dismissed for conduct unbecoming of a manager.

In response to Hamilton's court challenge to his firing, Southwestern Bell cited a single confrontation he had had with a female colleague. In court papers, the company says Hamilton had "verbally and physically accosted a co-worker...in an aggressive and abusive manner."

Hamilton says he and the woman both raised their voices during the "altercation"--which he regrets--and that he merely swatted her finger away after she began poking him in the chest during the exchange.

In a wrongful-termination and employment-discrimination suit he filed last November against Southwestern Bell in U.S. District Court in Dallas, Hamilton alleges that the reasons the company cited for canning him were "pretextual and in no way descriptive of the actual reason for discharge." In court documents, he claims that the actual circumstances of his dismissal violated state and federal law.

His brush with death, Hamilton contends, triggered a case of Post Traumatic Stress Disorder, which produces irritability, flashbacks, and uncharacteristic impulsiveness. He claims he told his superiors in December 1994 that the condition left him disabled, and that the doctor he'd seen had diagnosed the problem and prescribed medication. Yet the company, he says, refused requests to switch him temporarily into a less stressful, nonmanagement job. Hamilton blames the condition for the incident cited in his dismissal.

In court papers, Southwestern Bell concedes that Hamilton's supervisor knew he was suffering "some problems which he related to the rescue and that he was seeking counseling through his church." The company denies that Hamilton or the doctors advised his bosses he was disabled.

Hamilton alleges that Southwestern Bell had another, more insidious reason for wanting to get rid of him. Hamilton became a marked man, according to his suit, because he had been complaining to his supervisor about the possible illegality of company policies known internally as "Project X."

According to Hamilton's complaint, Project X was the name for a set of procedures in the company's Dallas revenue-management office that discriminate against minority customers. Hamilton--and others who worked in the department with him--say the term and policies came from their boss, Dennis Dorsey, area manager for the revenue-management center. Project X, says the lawsuit, involves rules "concerning the establishment and termination of telephone service to minority subscribers" that are "radically different" from those applied to nonminority customers.

Southwestern Bell spokesman Chino Chapa declined to comment on the existence of Project X, but said the company denies "any and all allegations of discrimination" and has "a commitment to equal opportunities for all citizens." Asked about Project X, Dorsey replied, "I'm not even sure what we're talking about there." Dorsey's boss, Thomas Rasberry, just laughed when asked about Project X.

But five other Southwestern Bell revenue-management office employees--three still there and two who have left--confirmed details of the Project X policies in interviews with the Observer.

Responding to a description of Project X practices at Southwestern Bell, Rick Guzman, an assistant public counsel in the Office of the Public Utility Counsel, an Austin state agency established to serve as a watchdog for telephone consumers, said: "Sounds like high-tech redlining to me."

"It's difficult when people come and tell me I am a hero," says Doug Hamilton as he finishes a lunch of fried chicken, potatoes, and corn in a Rockwall restaurant. "I don't think a hero would act like this. In the movies, the hero lives happily ever after. They don't have flashbacks and nightmares."

The son of an auto mechanic, Hamilton describes himself as a born-again Christian. The first in his family to graduate from college, he started at Southwestern Bell immediately after earning his degree in 1975. His first job was in an Oak Cliff business office, where he began as a customer-service representative, an assignment that meant handling all kinds of telephone customers' requests, including those for repairs and starting up service. Fond of his job and the company, Hamilton planned to be a lifer with Southwestern Bell. Hamilton became even more intent on that plan in the spring of 1986, when he discovered that his wife, Janet, a part-time dental hygienist, suffered from multiple sclerosis, an incurable disease of the brain and spinal cord. He knew that it would be difficult to obtain health insurance if he switched jobs, given his wife's pre-existing condition.

That same spring, Hamilton completed his master's degree in business administration and moved into management. In January 1992, a corporate restructuring landed him a supervisor position in the newly created revenue-management office. His boss was Dennis Dorsey.

Employees in the revenue-management office focused their energies entirely on maximizing Southwestern Bell's collection of cash: screening potential customers' billing and credit information (such as addresses, employers, and social-security numbers) to avoid starting service for those at high risk of failing to pay; and deciding when to pull the plug on those who had fallen behind on their bills. The revenue-management workers also call customers to demand prepayments or deposits on accounts with high long-distance charges.

It is in the course of this everyday business that Dorsey reportedly began instituting the policies known within the revenue-management office as Project X. Hamilton and four others familiar with the policies there say they first heard the term from Dorsey.

The Southwestern Bell employees say Dorsey instructed his subordinates to scrutinize customers in lower-income, high-minority-population areas more closely than those in neighborhoods that were more affluent and heavily Anglo. Even the Southwestern Bell computer-billing software is programmed, Hamilton and the others say, to focus bill-collection activities on areas such as Oak Cliff rather than Addison, Northside Fort Worth rather than North Richland Hills.

Careful scrutiny of prospective customers is a legal and prudent business practice--as long as it is applied equally. Public Utility Commission of Texas rules state: "No utility shall discriminate on the basis of race, nationality, color, religion, sex, or marital status." But at Dorsey's direction, Hamilton says, Project X implemented specific approaches that treated customers in low-income areas more harshly.

On busy days, for example, revenue-management supervisors would tell their staffs to investigate and validate 100 percent of the social-security numbers and previous addresses on service applications from prospective customers in Oak Cliff--while not checking a single one from Richardson.

At other times, they would be told to start service-termination procedures for any Oak Cliff resident who was late on a bill of more than $50. Workers were told not to bother contacting North Dallas customers even if they were delinquent on a $200 bill.

If a relatively new customer in West Dallas began making more than $100 in long-distance calls a month, supervisors told revenue-management workers to call and ask for a deposit--as much as $1,500. Southwestern Bell typically required no such deposit from a Richardson or Addison resident with comparable long-distance charges.

Southwestern Bell customers remained unaware of such disparate treatment, the revenue-management office workers say. "How would they know?" asks Shawn Tankersly, a revenue-management employee who was fired by the company this fall after 15 years. "People in $255,000 houses don't talk to people in $300-a-month apartments about their telephone bills."

The geographic areas targeted for more-rigorous collection procedures are neighborhoods that, according to Southwestern Bell records, consistently produce the largest percentage of unpaid bills and outstanding debts.

Each month, revenue-management supervisors calculate for each geographic area (or "wire center," as insiders call them) the percentage of bad debt compared to total billings. One such report for a period covering January 1994 shows an Oak Cliff neighborhood left the company with $445,055 in unpaid bills--3.14 percent of $1.42 million Southwestern Bell billed customers in the area that month. In comparison, an Addison neighborhood left the company with $448,406 in unpaid bills--just 1.8 percent of the $2.5 million billed in that area that month.

The company, of course, had an economic desire to minimize bad debt to boost profit for shareholders. But Dorsey had a personal incentive. His compensation is linked to the overall debt ratios in Dallas and Fort Worth neighborhoods, according to Hamilton and another former supervisor in the revenue-management department who still works for Southwestern Bell. The lower the bad-debt number, the higher Dorsey's take-home pay.

Hamilton and the others say the revenue-management office supervisors, including Hamilton, intent on keeping a tight grip on bill-payers in the targeted neighborhoods, sometimes pushed staff to skirt a state Public Utility Commission requirement that customers receive 10 days' notice before any termination of service.

The notion of Southwestern Bell systematically treating customers from poorer neighborhoods with more scrutiny and less sympathy offends both consumer and civil-rights activists.

Rick Guzman, the assistant public-utility counsel who said the Project X policies sounded to him like "high-tech redlining," says both PUC guidelines and state law require Southwestern Bell, a regulated utility, to provide service without regard to race.

Guzman and his predecessors at the Office of Public Utility Counsel had not previously heard of complaints about such discriminatory practices, but suspect the silence stems from a lack of consumer knowledge. "This is the kind of thing a customer might feel, but it takes an employee on the inside to know that," says Kathy Grant, who was an information specialist for the watchdog agency and now works as lobbyist for an Austin law firm.

Craig Murphy, an Oak Cliff resident and Democratic Party precinct chairman, had a personal reason to suspect Southwestern Bell was treating residents of his neighborhood harshly. Last year, Murphy recalls, he had fallen one month behind on payments for a second telephone line that had recently been installed in his home office. Southwestern Bell shut off his service--without notice, Murphy says, although he concedes the company claimed it had warned him. Murphy received such treatment, he says, even though he had consistently paid his phone bills on time for 15 years. A supervisor reinstated his service and "popped out with the fake apologies," Murphy recalls.

Murphy remains unhappy about how quickly the plug was pulled and suspects the location of his residence had much to do with the swiftness of the termination. Southwestern Bell "should take the time to use a more reasonable standard" than geographic lines to determine who merits credit, he says.

Plenty of other Southwestern Bell customers have lodged complaints with the Texas PUC. In a recent five-month period between September 1, 1995, and January 26, 1996, the commission's records show it received 59 complaints about billing issues--20 about service terminations, 20 about discontinued service, seven about inadequate or no-notice cutoffs, and four about the company's handling of delinquent payments.

Kathy North, manager of consumer affairs for the PUC, says that the formal complaints filed with her agency most likely massively underrepresent consumers' problems with Southwestern Bell. "Most people don't know we exist, and the company has no obligation to report complaints to us," says North.

She identifies the Texas PUC as one of the nation's least aggressive in policing such matters. "We don't get into the details of their [Southwestern Bell's] business practices," she says.

PUC rules give the telephone company freedom to handle customers disparately. As long as the company is filling 95 percent of service requests within seven days and giving 10 days' notice before terminating service for delinquent payment, it is operating within the PUC guidelines.

But as North concedes about Southwestern Bell, "They know how to get around the rules."

Doug Hamilton concedes that he never intended to sacrifice his job to fight discriminatory practices at Southwestern Bell. Though he had voiced complaints about Project X over the years, he says he did so gingerly--at first. "I had to protect my job," he says.

Hamilton says his conflict with supervisors over Project X worsened in the months after he pulled Elisa Moore from her sinking Mustang. The emotionally draining experience, he says, led him to begin acting less cautiously, more irritably, and more impulsively--both at the office and elsewhere.

In fact, the brush with death had thrown both Hamilton and Moore into emotional tailspins.

At the scene that day in October 1994, the two strangers had hugged each other as they climbed out of the water. Moore then thanked Hamilton. "By the way, what's your name?" he asked. She told him her first name and then climbed into a police cruiser for a lift home.

On their way home, Moore recalls, the officer stopped to tell some Utah tourists on the other side of the culvert--busy snapping photos of the rushing waters--to move from the danger. Says Moore: "I remember being furious that they had been standing there, taking pictures of me dying."

At home, she stripped off her soggy clothes, showered, and then "lost it," she says. "I called my parents and just started sobbing."

Moore's return to normal life was slowed by an irrational fear of water. "It took me until Christmas to take a regular shower and until February to get behind the wheel on a rainy day." Unable to make it to work through rain--feeling panicked and paralyzed--she would turn her car around, head back home, and call in sick.

Hamilton endured similar post-rescue frights. On the evening of the event, Hamilton had told his wife to drive the children home without him. He wanted to walk the few blocks by himself. On his way back, he recalls, he sat down in a field and cried for 90 minutes. "I couldn't stop," he says. It was only when he got home and took a shower that he realized that fire ants had covered his body with bites. A counselor would later tell him that such a lapse in physical awareness is common after emotional experiences, a result of soaring adrenaline levels.

A few weeks later, Hamilton learned of other men who had tried to save flooding victims, only to drown themselves. Losing sleep and suffering from nightmares, Hamilton decided he needed to find Moore and talk to her to establish some closure. He asked his Mesquite city councilwoman to help him find Elisa, whose last name he didn't know.

Hamilton and Moore compared notes about nightmares and stress. They began talking on the telephone once every few weeks. They didn't see each other again, however, until a Southwestern Bell public-relations man asked them to pose together for a photograph that appeared on December 22, 1994, in The Mesquite News, along with a story about Hamilton's nomination for the Vail award.

By then, Hamilton's problems at work had already begun to surface. As a supervisor in the revenue-management department, one of Dorsey's right-hand men, he was working for a demanding boss.

Hamilton says he was having increased conflicts with Dorsey, particularly over Project X. "I had expressed concerns about the way we were treating our customers, particularly when there were blatant violations of the PUC guidelines. I wanted to know who was going to take the fall."

One practice in particular, Hamilton says, made him nervous that the PUC might personally charge him with violating its regulations. When prospective customers from areas targeted under Project X applied for phone service, the revenue-management office workers who scrutinized the credit information often conducted their checks after a dial tone was already on, Hamilton says. As a result, they sometimes belatedly discovered that the customer had provided a faulty address or social-security number. Dorsey, Hamilton says, wanted his workers to order service terminated in such cases without 10 days' notice, as though it had never been started.

This clearly violated PUC rules, Hamilton contends. He says he went to Jan Moody, a supervisor in another department, the department responsible for initiating dial tones, to try to develop a procedure that lowered debt levels while staying within the PUC guidelines. Moody, now in another Southwestern Bell department, confirmed that she knew Hamilton but declined to say anything else.

Hamilton was not the only Southwestern Bell employee to raise questions about Project X with Dorsey. Tankersly says her black and Hispanic co-workers repeatedly objected to the patterns they detected--patterns that discriminated against residents of their own neighborhoods. "They would be living in those areas, and they would say it is not right," Tankersly says. A black 20-year Southwestern Bell employee still in the revenue-management office concurs, saying, "I understood Project X to be highly discriminatory." She says she complained to Dorsey, but that he didn't even acknowledge her objections.

Meanwhile, in October 1994 Hamilton had advised Dorsey that he was suffering emotional problems stemming from the rescue and was discussing the difficulties with his minister, Michael Armour at the Skillman Church of Christ, according to his complaint. On December 2, 1994, Hamilton claims, he asked Dorsey to refer him to the Employee Assistance Program for counseling. A program counselor that day recommended he begin seeing a licensed psychotherapist.

By then, Hamilton says, his uncharacteristically erratic temper had produced an incident that Dorsey would use as a pretext to fire him.

The incident occurred on November 30, 1994, between Hamilton and Darlene Starks. Hamilton says Starks, a peer in the revenue-management department with whom he had previously enjoyed a good relationship, had spent the better part of the workday Christmas shopping with several other women from the office. The women had approval to leave for an hour or two, he says, but had left for half the workday, much longer than Hamilton deemed appropriate. Their absence had left Hamilton and his staff unfairly overburdened, he says. When Starks finally returned that afternoon, he confronted her.

He says she responded by jabbing her finger in his chest. He concedes he used foul language that he now refuses to repeat. He also admits that in a moment of frustration he finally slapped Starks' jabbing finger to get it off his chest.

Starks did not return messages from the Observer left on her voice mail.
Although the shouting took place in Starks' office, it produced a stir throughout the department. Several employees listened at the door, then scrambled back before their eavesdropping was discovered. "The door started to open," Tankersly recalls, "and we flew back to our chairs."

Almost immediately, Hamilton knew he had gone overboard. He visited with his minister that evening. Recalls the Rev. Armour: "He came to me and said, 'I think I really blew it.'"

On December 9, the company received an anonymous letter about the incident, alleging that Hamilton was "abusive and dangerous." Although Southwestern Bell never established who wrote the letter, the company concedes in court papers that the letter played a role in the investigation that led to Hamilton's firing.

By December 21, Hamilton had visited with a psychiatrist, as the company-recommended therapist had suggested. Dr. Babette Farkas diagnosed Hamilton as suffering from non-psychotic Post Traumatic Stress Disorder, according to a statement she sent to the Texas Employment Commission. She recommended that Hamilton leave work for a week until the medications she had prescribed took effect and returned him to "functioning in a rational 'common sense' manner."

Dr. Farkas wrote in the April 23, 1995, statement to the TEC: "Mr. Hamilton's behavior of November 30, 1994, was an understandable consequence of a psychiatric disorder and should not be interpreted as a rationalization or misconduct."

Written appraisals from his supervisors suggest that Hamilton--prior to the incident of November 30, 1994--had been an exemplary employee. In July 1993, Dorsey, who prepared the evaluation, and senior manager Thomas Rasberry, who endorsed it, signed an appraisal stating that "Mr. Hamilton has been the critical linking pin in the district's successful effort to meet customer access on Mondays...he used exceptional interpersonal skills to pull together...the district office into a highly effective, well functioning team. As a result, the [revenue-management center] managers are able to focus on employee development and the reduction of the company's uncollectible expense."

In an early December 1994 evaluation--after the incident in Stark's office--Dorsey and Rasberry muted their praise only slightly. "He usually has the right idea on how something should be done, but can benefit from a softer approach," they wrote. Nonetheless, Hamilton's bosses gave him high marks for planning work effectively, communicating clearly and concisely, and demonstrating an understanding "of who the customer is." His only low mark on a 19-item checklist came in the category of "coordinating and negotiating with other team members."

Yet on February 9, 1995--two months after that evaluation and five months after his conflict with Darlene Starks--Hamilton was escorted by Dorsey into the office of senior manager Thomas Rasberry. The two superiors informed Hamilton he was being fired.

Dorsey and Rasberry cited the encounter with Starks as evidence of his unstable behavior, Hamilton says, and they gave him no opportunity to defend himself or explain the unfortunate episode.

In court papers, Southwestern Bell contends Hamilton had an opportunity to respond, but offers no further explanation. Reached by telephone, Dorsey and Rasberry declined to discuss Hamilton's firing, citing the pending litigation. Southwestern Bell spokesman Chapa said "there were other factors" involved in Hamilton's firing besides the run-in with Starks, but declined to elaborate.

Eleven days after Hamilton received notice of his termination, the Mesquite City Council presented him with a Public Safety Assistance Award for "recognition of his courageous and unselfish action in the rescue of a Mesquite citizen from dangerous floodwaters."

Says Hamilton: "I wondered if I should tell them, 'Thanks. By the way, I've just been fired.'"

As for his $5,000 Southwestern Bell Vail prize, Hamilton, shortly after his termination, was advised by Rasberry that the award would not be forthcoming. The company supervisor advised Hamilton that he was "unworthy" of the honor.

These days, Hamilton supports his family with his wife's part-time income, his savings, and money he gets from vending machines he has purchased. His biggest concern is the ticking clock on his Southwestern Bell health-insurance benefits. Federal laws require companies to allow terminated employees to maintain coverage for at least 18 months at their own expense. Hamilton has about six more months of coverage.

His wife's multiple sclerosis is in remission, so the family remains optimistic, Hamilton says. Without full-time work, he spends several days a week taking care of the kids while his wife cleans teeth. He has some time to think.

When the weather gets bad, he still has nightmares, he says. When his mind turns to that stormy October night that triggered so many problems, he also asks himself if he would wade out into those waters again--and knows that he would.

"Even if my wife had not come back with the cord, I would have gone after her," says Hamilton. "I could not let a woman die.

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