To Tell the Truth

A lawsuit closes in on allegations that Southwestern Bell has strict billing policies targeting poor, predominantly minority neighborhoods

Long after prime-time television hours, speaking by phone from a Marriott hotel room in a suburb of Chicago, Doug Hamilton is sounding anything but happy. His wife and three school-age children are back at the family's home in Rockwall, just east of Dallas.

But Hamilton had to accept the only work he has been able to find since he was fired by Southwestern Bell. The new job means reporting every week to an office outside Chicago and flying home for the weekends. He hopes to finish the project he is now working on in time to get home for Christmas.

"It's 100 percent travel, and it gets really lonely. It's hard," Hamilton says, and he knows that he is not the only one suffering. "It's hard on my wife too," he says. "She is kind, having to shoulder everything at home."

There has been little for Hamilton and his family to cheer about since he was fired by Southwestern Bell in February 1995. The 43-year-old former manager is suing the company, claiming that Southwestern Bell wrongfully terminated him.

Along with economic hardships, Hamilton has suffered stress, his wife says, from the intense scrutiny he has been subjected to as company lawyers scour his employment history looking for fault.

But, despite the uncomfortable inquisitions and the financial setbacks, several specific steps taken by Southwestern Bell since Hamilton filed his suit have convinced him that he will be doing the right thing when he heads into a federal courtroom as scheduled next month to press his case against the company.

Although the outcome of his case remains uncertain, Hamilton's litigation has already shown a side of Southwestern Bell that consumers rarely see. As the Dallas Observer reported in its February 15, 1996 cover story,"Project X," Hamilton contends that he was fired--in part--for refusing to go along with a Southwestern Bell policy which he and other employees say targeted low-income, primarily minority neighborhoods for stricter billing practices.

The phone company, Hamilton and others say, called its strict scrutiny of low-income customers "Project X." They claim the policies meant that poor customers were more likely to have their phone service cut off, or be forced to post large deposits with the phone company.

When the Observer first reported on the allegations, Southwestern Bell spokesman Chino Chapa declined to comment on the existence of Project X. Chapa did say that the company denied "any and all allegations of discrimination" and has "a commitment to equal opportunities for all citizens."

Southwestern Bell director of regulatory affairs Kirt Hapfinger says that the company does "absolutely not" use geographic factors as a way to differentiate among customers for billing purposes.

But as a trial date nears for Hamilton's lawsuit against the company, the fired manager and his attorney believe that the evidence of Project X's existence is getting stronger. Documents and evidence unearthed since Hamilton filed his suit, they say, lend credence to his claims that Southwestern Bell effectively discriminates against poor and minority customers.

Doug Hamilton assumed that he would be a lifer at the phone company. Before he was fired, he had put in 20 years at Southwestern Bell and had no reason to think he'd ever leave.

Indeed, his wife's medical condition--she was diagnosed in 1986 with multiple sclerosis, an incurable disease of the brain and spinal cord--made the insurance package he received from his employer an absolute necessity. Because she had a serious, pre-existing medical condition, any new employer might refuse to provide her medical coverage.

In 1992, Hamilton was transferred into a supervisor's job in the revenue management office in Dallas, then a newly created division. It was that office, according to Hamilton and five other current and former Southwestern Bell employees interviewed last year by the Observer, which enforced policies that unfairly targeted poor and predominantly minority neighborhoods.

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 to avoid starting service for those with a high risk of failing to pay, and deciding when to pull the plug on those who had fallen behind in their bills.

Hamilton and other Southwestern Bell employees told the Observer that they were instructed to scrutinize customers in low-income, high-minority-population areas more closely than those in neighborhoods that were more affluent and heavily Anglo. On busy days, for example, the workers say they were told to 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 of the new customers in more affluent Addison.

The company would move to cut off service to customers in West Dallas if they were late paying bills as small as $50, Hamilton and other Bell employees said. But customers in North Dallas could fall behind as much as $200 without even getting a call from the phone company asking about the late payments.

If relatively new customers in West Dallas began making more than $100 a month in long distance calls, they would be asked to put up a hefty deposit--as much as $1,500, workers said. Customers in Richardson or Addison with similar long-distance charges were not asked for an additional deposit.

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