Actually it happened in the Washington DC City Government (1998) when a senior white staffer used the word and was beset by black colleagues and staffers as using a racist term. The newly elected Mayor Anthony Williams (non-white) succumbed to the pressure and fired the victim, David Howard.
The irony became much hotter when it turned out that Mr Howard was also a member of a victim group, being an out-of-the-closet homosexual and the most senior one in the DC City Government at that. Mr Howard was rehired shortly afterwards when a 'review' came to this conclusion; "The review also showed that one of our employees did misunderstand Mr Howard to have used a racial epithet.''
Thanks for that info....impressive in its details!