including one now living in Bermuda -- destroyed documents relating to a discrimination lawsuit, according to US newspapers.

Both The New York Times and The Washington Post yesterday reported that federal investigators were looking into whether Texaco bosses destroyed documents being sought in the lawsuit.

Three company executives, including David Keough who is now chief financial officer at Bermuda-based Heddington Insurance, were caught on tape allegedly discussing destroying some of the documents.

The tapes also record some of the executives referring to black Texaco employees as "jelly beans'' and "niggers''. Mr. Keough is not heard to say any racial remarks.

Yesterday Mr. Keough was off the Island and it is understood he was at the Texaco headquarters in White Plains, New York.

Texaco spokesman Peter Maneri declined to discuss if Mr. Keough and the other executives would be suspended from their jobs while an internal company investigation and the federal investigation were carried out.

He said: "We do not want to make judgments until we have had an opportunity to review the tapes which have only just been made available to us.'' Mr. Keough moved to Heddington Insurance, a Texaco subsidiary, in April or May last year.

Last night Heddington's senior vice-president John Turner said the company had no comment to make.

"Mr. Keough has been working for us since last April or May time and all these allegations are prior to that date.'' The lawsuit against Texaco is a class-action brought on behalf of 1,500 black employees of the oil company who claim they were denied promotions because of their race.

According to the tapes, as transcribed in court papers, in 1994, after Texaco had been asked to produce any documents relevant to the discrimination case, executives spoke frankly about papers that should be hidden or destroyed.

Richard A. Lundwall, then senior coordinator of personnel services, recorded the conversation and identified the speakers on the tapes, according to court papers.

Discussing a collection of documents on minority hiring, a man identified as Robert Ulrich, Texaco's treasurer, says: "There is no point in even keeping the restricted version anymore. All it could do is get us in trouble.'' To which Mr. Lundwall replies, "Let me shred this thing and any other restricted version like it.'' A man identified as J. David Keough, then senior assistant treasurer, looks at a chart of women and minorities and says: "If we can't explain this thing, I mean, it shouldn't be in there. .. .If it was a favourable chart, you'd want to retain it.'' Later, Mr. Ulrich says: "We're going to purge the (expletive) out of these books, though. We're not going to have any damn thing that...we don't need to be in them.'' When the conversation turns to race relations, Mr. Ulrich says: "This diversity thing. You know how black jelly beans agree.'' Mr. Lundwall responds: "That's funny. All the black jelly beans seem to be glued to the bottom of the bag.'' Texaco issued a statement saying if the allegations were true they represented an "outrageous violation of the company's core values and principles''.

It said Texaco had clear and "vigorously enforced'' policies against workplace discrimination and towards the retention and production of documents.

"If any documents related to this lawsuit were in fact concealed or destroyed, such conduct would constitute a clear violation of these policies.

"If the company through its investigation determines that the alleged misconduct occurred, it will take appropriate disciplinary action against the employees, which could include termination,'' said the statement.