"Herman Malone, who was the largest black contractor in US West's vendor corps, selling as much as $10 million a year in product toUS West, began to experience the same things that other black contractors across the West and Midwest later reported. His contractto supply plastic conduit toU S West construction sites was in trouble." - from Lynched by Corporate America

Recognizing racism is the first step toward correcting it, yet recent studies of racist conduct find that racism in America has changed - whether in the workplace, the marketplace, the classroom or the streets. It's less recognizable, more subtle, and it rarely is stated openly.

"It may not be direct discrimination, but it still matters indirectly," Dalton Conley, a sociology professor at New York University said about a recent release of Census Bureau racial data that showed continued disparity among whites, blacks and Latinos in America.

"It doesn't mean it's any less powerful just because it's indirect," Conley said.

A new book, Lynched by Corporate America, by Denver-area businessman Herman Malone and Colorado journalist Robert Schwab, was written to bring to life a story of local institutional racism in our courts and corporations for people who want to fight those forms of racism in this century.

February is Black History Month, and this book documents a part of black business history in Colorado that was laid out in a 1990s court battle against the former U S West Communications, now Qwest Communications International. Seven African-American business owners, working in all parts of Qwest's 14-state telephone-service region, made an unprecedented claim of racial discrimination in contracting against the company.

Qwest settled the claims with six of the plaintiffs for more than $1 million.

Only Malone, still CEO of his own Denver-based telecommunications company, RMES Communications, pressed the case through two seven-day jury trials in federal court to prove his point. In doing so, his marriage broke up, and his business filed for bankruptcy protection and survived. He also forced Qwest to accept him as a 50-50 joint-venture partner in a new contract the two companies held together at DIA.

But Malone lost the discrimination case and is still paying its bills.

Malone's experience offers a case study in how federal law and Fortune 500 corporate policy can stack up against a small-business owner who chooses to challenge them. It also offers a road map of the potholes large and small companies can fall into, even as their public efforts to harness the buying power of racial minorities in the United States seem well-intentioned and altruistic.

Excerpts from 'Lynched by Corporate America,' by Herman Malone and Robert Schwab

• From Chapter Three, "Feeding the Lions"

Russ McGregor really wasn't a very likeable guy, but he could talk a good game.

"We were fed to the lions, sir," he told U S West lawyers when he was deposed.

"If you have a policy that you claim is to include minority contractors, and you recruit minority contractors - African-American contractors - into that plan and then, after they're in that plan you feed them to the lions, that's race-based," McGregor said. "We were fed to the lions."

McGregor was black, a former employee of U S West who struck out on his own, turning an office-products company he owned into a technology company, selling computers, parts, and maintenance services to big companies like Xerox, U S West and Lucent Technologies.

By the time McGregor made his little speech to the U S West lawyers, however, he felt like he had been chewed up and spit out by the lions of the telephone company - particularly one lion, U S West Chairman Dick McCormick. McGregor knew McCormick from the time they had both worked in Omaha, where McCormick was an executive at Northwestern Bell and McGregor was an up-and-coming technician.

Dick McCormick was (U S West CEO)Jack McAllister's junior, but he was definitely pegged as a potential McAllister successor. That's why McGregor valued his relationship with McCormick and considered McCormick an advocate for him inside the giant company.

Most black business owners who had worked for U S West or its predecessors for many years date losing their business with the company from the year that McCormick stepped up to chairman, succeeding McAllister in May of 1992.

Herman Malone, who was the largest black contractor in U S West's vendor corps, selling as much as $10 million a year in product to U S West, began to experience the same things that other black contractors across the West and Midwest later reported. His contract to supply plastic conduit to U S West construction sites was in trouble, or seemed to be.

In September 1992, Malone got a letter from U S West that warned him it might even terminate the contract it had with RMES (Communications, Malone's company) earlier than June 1993, its original expiration date.

• From Chapter Four, "The Frying Pan"

Malone needed a minister.

His life was falling apart. His business was failing. He was arguing with his wife, Pauline, the love of his life. His company was under fire.

Losing U S West's conduit contract forced him to lay off nearly half of his employees, including Pauline, who had been working with the company ever since she and Herman had married in 1992.

The black plaintiffs in the lawsuit had won the right to depose McCormick and (Sol) Trujillo, but U S West's attorneys also tried to silence the black men by asking a U.S. magistrate who was handling the preliminary legal steps in the case to issue a gag order that would have kept the press from continuing to report on it.

Malone had been deposed in January during a contentious, all-day meeting with those same U S West lawyers. Malone was forced to recount the dramatic drop-off in business at RMES during the first year of his marriage.

From 1993, when the company posted $11.7 million in sales - mostly its conduit work with U S West - his business had dropped to just $2.7 million in 1994, $1.2 million in 1995 and less than that in 1996.

Serving as chairman of the National Black Chamber of Commerce gave Malone national standing in the Colorado black community. The ministers did come to his aid, and other people looked up to him and admired his taking on U S West. But others in the black community bitterly resented him for making trouble. The Colorado Black Chamber, led by former U S West executive Bob Patton, refused to host the National Black Chamber's convention, partly because the national chamber, led by Malone, had gone ahead and filed the lawsuit despite Patton's reticence to attack a powerful source of the local chamber's funding.

Many of the volunteers who helped Herman organize the National Black Chamber's convention were also loyal and active members of the local chamber, but U S West - an early supporter of the National Black Chamber - was conspicuously absent from its list of sponsors for the Denver convention.

The national chamber's lawsuit, the depositions and public backbiting between the plaintiffs and U S West in the press had a lot to with with U S West's absence.

Robert Schwab was most recently editor of Colorado Biz magazine. He is a former reporter and deputy business editor with The Denver Post. Lynched by Corporate America, HM-RS Publishing (2006), can be ordered in hard cover ($19.95) or soft cover ($15.95) at www.lynchedbyCA.com.

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