It seems like the whole incident resulted from confusion and panic on both sides. The driver probably did not realize the undercover cops were cops and thought he was being attacked. The cops thought they were being attacked.
Police tend to make up stories to justify there actions, so I would not believe everything they said about showing badges etc.
This whole business of having the undercover cops hanging around strip clubs to try to bust them for alcohol and prostitution violations seems a little questionable in the first place. Undercover police need to be aware that people may not realize they are police and be more careful in their actions.
I think the police screwed up here, but I don't think it was deliberate, and certainly not racially motivated.
(A)The cops watch way too much TV. (B)Undercover cops in NYC really look like the sleazoids in the milieu they are trying to penetrate. (C) Since a solid citizen could make that mistake, and often has, cheap and sordid criminals are legally entitled to the same latitude. Since the cops have been staking out this dive for months, they should have had uniformed backup instantly available.
BTW, NYC Cop marksmanship is the pits, their waste of ammo prodigious. A full clip of 9MM could easily make sure a car doesn't leave the scene, with 4 flats and a blown radiator.
This copper is actually damn lucky his victim really is such an unloveable character and the multiple rounds down range didn't take out any "innocent" bystanders.