Phone Calls and Philandering

Ma Bell's slip shows in a San Antonio courtroom

On Oct. 17, 1974, T.O. Gravitt, the 51-year-old chief executive in Texas for Southwestern Bell, of which he was a vice president walked into the garage of his $120,000 north Dallas home, turned on the ignition of his Oldsmobile and settled back to die of carbon monoxide poisoning. Later that day, Gravitt's family and Bell colleagues found in his briefcase a nine-page memo accusing his company of political payoffs, illegal wiretapping and using questionable bookkeeping to secure telephone rate increases. A hand-scribbled message added, "There is bound to be much more. Watergate is a gnat compared to the Bell system."

An emotional overstatement, certainly--but Gravitt's suicide touched off a scandal that three years later is badly damaging Ma Bell's image as the staid gray lady of American corporations. In a San Antonio courtroom last week, past and present Southwestern Bell executives accused each other of everything from bribing Texas newspapers and politicians to playing host to parties for local politicians and visiting executives from other Bell system companies. They were testifying in a $29 million libel and slander suit brought against Southwestern Bell by Gravitt's widow, Oleta Gravitt Dixon,* and James Ashley, who was fired as general commercial manager for the San Antonio office of Southwestern Bell a few days after Gravitt's death. The widow claims that the company hounded her husband to suicide; Ashley maintains that he was fired because he and Gravitt were about to expose the "incorrect, duplicitous, deceitful" methods that Bell had used to get rate increases in Texas.

Until last year, Texas was the only state where such increases had to be approved by city officials, and they were frequent and large enough to make it traditionally one of the most profitable states in the entire Bell system. Ashley claims that Southwestern Bell officials were constantly wooing and bribing politicians in such cities as Austin and Dennison.

Among other things, he says, the executives entertained politicians on hunting expeditions at Bell resorts in rural Texas gave them credit cards to make free long-listance calls--and, in one case, staged a three-day orgy at the TraveLodge in downtown San Antonio, where some Bell women employees became party girls Ashley also accused the company of giving top executives a $1,000 raise on the understanding that it was to be donated in $50 installments to a political slush fund. The pot was used for contributions to local and state officials friendly to Bell rate increases. Ward K. Wilkinson, the company's Austin lobbyist, admitted that he collected $1,200 a month from Bell executives for a political fund that was kept in cash in his office safe.

Ashley claims that when Bell learned that he and Gravitt were planning to expose such practices, the company started investigating their private lives. Houston Psychiatrist Gary J. Byrd told the court two weeks ago that Bell had "harassed" Gravitt until he committed suicide. Ashley claims that a Bell vice president at Gravitt's funeral warned him not to join the dead man's family in a suit against the company, saying "You file that suit and the Bell employees will hound you to death. That son of a bitch [Gravitt] lies in the grave--you're next."

Southwestern Bell last week presented an entirely different scenario. Harvard psychiatrist Shervert Frazier, testifying for the company, told the court that the "bad part" of Gravitt's life was about to be exposed and "he didn't want to face the music." Bell lawyers charged that Gravitt had spent $200,000 in company money remodeling his private office, $4,831 of company funds on repairs to his home and thousands more on padded expense reports. The company maintained ftat Gravitt was being investigated at the time of his suicide for philandering with employees on company time. He was accused of trying to seduce a female Bell employee in his private plane on a trip between San Antonio and Laredo as the plane flew on automatic pilot.

As for Ashley, Bell claims that he was fired for joining with Gravitt to create fictional expense accounts and for forcing female employees to trade sex for promotions. On the witness stand, Ashley--who already has won 1 million suit against Southwestern Bell for tapping his phone--admitted falsifying expense forms but claimed he did so to cover up political payoffs. Said I didn't take one penny of Bell money for my use ever. I spent a lot of money on whiskey and a lot of money on politicians."

The whole affair seems an extreme case of office politics. "There were always rival factions within [Southwestern] Bell " says one insider. "When Angus Alston the chairman of the board, was dying of cancer in 1974, a new group came into power and wanted to get rid of their enemies, Gravitt and Ashley." Pat Maloney the flamboyant lawyer for Gravitt's widow, pointed to a Bell organization chart in the San Antonio courtroom; he accused Gravitt's successor, Chester L. Todd, of instigating the investigation that led to the executive's death only to get his job Asked Maloney: "That's really the way the corporate world works, isn't it?"

The scandal already has brought consequences. After Gravitt's death, the Texas legislature passed a law giving state rather than city officials the power to approve or deny telephone rate increases In its first rate case decided in 1976, the new state commission gave Southwestern Bell less than one-fifth of a $298 million raise that the company sought.

This case is not the only embarrassment for American Telephone & Telegraph Co., parent of the Bell companies L.E. Rast, president of Atlanta-headquartered Southern Bell, John J. Ryan, former vice president and general manager for Bell operations in North Carolina, and three other company executives have been indicted in North Carolina on charges of conspiring to force other company officials into falsifying expense accounts so that the money could go into illegal political contributions. The company has admitted that some 80 Southern Bell executives between 1971 and 1973 made contributions to politicians totaling $142,000. Ryan last week pleaded not guilty the others have yet to be arraigned.

* She is remarried to an Oklahoma oilman.

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