A jury in San Antonio today dealt Bell Telephone the latest in a series of financial and public-relations blows that began nearly three years ago when the head of the company's Texas operations killed himself and left a suicide note saying that "Watergate is a gnat compared to the Bell Telephone System."
In a 10-to-2 vote that climaxed a month-long trial and 14 hours of deliberation, the jury award a total of $3 million to the widow of T. O. Gravitt, the Southwestern Bell executive who killed himself in the midst of an intensive company investigation, and to Gravitt's corporate ally, James Ashley. They had sued Bell alleging libel and slander during the investigation and its aftermath.
Ashley, a Gravitt lieutenant who once headed a department of 12,000 in San Antonio and directed rate-increase requests in nearly 200 Texas cities and towns, was fire in October, 1974, purportedly for sexual misconduct.
After that and after Gravitt's subsequent suicide, Ashley charged that Bell misled local rate regulators into approving higher-than-necessary rates, used Bell System buying power to influence city councilmen who voted on rate increases, and maintained a political slush fund collected from senior executives who allegedly were given raises to cover campaign contributions.
Ashley, who is 4, and was a 23-year veteran of the phone company, maintained that he and Gravitt had found the company's deceptions increasingly untenable and susceptible to being exposed, and he said they were being harassed because of their efforts within the company to change the practices.
Bell denied those charges.
Bell charged that both men were being investigated for financial irregularities and for pressuring female employees to have sex with them in exchange for promotions. During the trial, Bell produced about a dozen of its women employees who testified that one or the other of the executives had either propositioned them or slept with them, or that they had witnessed others having sex with them.
Pat Matoney, the plaintifs' attorney, said that testimony had demonstrated widespread promiscuity among other executive within Bell. He said "Bell will never again have its old, prestigious conservative image."
In the complex 35-point decision the jury accepted one of Bell's allegations that Gravitt had filed false vouchers with the company, and the jury ordered his widow, Oleta Gravitt Dixon, to repay Bell $1,771.56. The jury also declined to award any money to Gravitt's two sons, who were also plaintiffs. Its $3 million award to Ashley and Dixon - $1.5 million each - was barely one-teeth of the $29.2 million they had sought.
United Press International quoted Ashley as saying he felt "a strong sense of justice" about the jury's decision (he and his wife earlier had won $1 million from Bell in a separate invasion-of-privacy action growing out of the internal investigation).
C. L. Todd, vice president and general manager of Bell's San Antonio office, called the decision "definitely a miscarriage of justice" that resulted from the trial being held in San Antonio, where publicity about the Bell scandal has been intense. UPI said.
In addition to today's decision, which Bell says it will appeal the,
Texas scandal has cost Bell dearly. The company has lost millions of dollars requested in rate increases in the five-state Southwestern Bell territory, and the scandal has also resulted in the creation of a public utilities commission in Texas, something successfully opposed by Bell in past years.