Still considering the possibility of a malicious changeling, or some kind of "ghoul elf."
My serious thought: yes, it's racism, and covering for the guy was more racism, and I look forward to the future where they continue to cover for the guy, which will continue to be racist.
(I've been the person who's had to say in meetings: "OK, it seems like you're not considering my proposal, but you're just changing the topic instead of offering a technical reason for it.")