Odd man out at Enron; did Michael Kopper's sexual orientation play a role in his becoming the first man to fall in the country's biggest corporate scandal? - Business

He made his fortune by operating on the sidelines--familiar territory for this gay man. And at Enron Corp., it was a role Michael J. Kopper used to his advantage--in order to slip through the cracks unobserved by the public as he bilked investors out of millions of dollars.

Today, however, Kopper is anything but on the sidelines. By pleading guilty to conspiracy to commit wire fraud and money laundering charges on August 21, the 37-year-old became the first Enron executive to come clean and place himself in the dead center of one of the highest-profile corporate scandals this country has ever seen. Now, as investigators and the media speculate about how he might help untangle Enron's maze of cooked books, some gay people are asking just how much of a part, Kopper's homosexuality played in getting the former executive to where he is today.

At first glance it seems preposterous to think the Enron scam could have anything to do with sexual orientation. Certainly, neither former chief executive Jeffrey SMiling nor former chief financial officer Andrew Fastow considered his heterosexuality when taking actions that investigators say led to the company's demise. But a closer look suggests that Kopper and his fellow executives were well aware of a way Kopper's homosexuality could illegally benefit Enron.

The key lies in the series of sham partnerships Enron created and that, starting in 1997, Kopper managed in order to hide much of the company's ballooning debt. Enron used one such partnership, Chewco Investments, to shuffle more than $700 million of debt off its books, and Kopper made his domestic partner, William Dodson, a joint owner of Chewco. After the shell company was "sold" back to Enron, the couple netted more than $7 million from an initial investment in Chewco of $125,288.

CEO Skilling prevented the company's straight executives from setting up similar arrangements with their spouses. According to some outside observers, Kopper was the exception because the lack of legal recognition for his life partner made it much more difficult for investigators to connect Dodson's work at Chewco to Kopper's work at Enron.

"Ironically, if [gay] people had legally recognized relationships or civil unions with all the effects of marriage, the relationship between [Chewco and Enron] would have been known taster," says Bob Witeck, CEO of Witeck-Combs Communications, a Washington, D.C.-based public relations and marketing consultancy. "If [Kopper] had done tiffs with a legally married spouse, it might have pointed the way to something that someone might have noticed faster."

But Michael Kopper has never made a practice of being noticed. In fact, Alana Caraccio, Kopper's junior high English teacher in Woodmere, N.Y., told Newsday that he was an unexceptional student who "did not stand out at all." He is said to have been an equally unremarkable student at nearby Cedarhurst's Lawrence High School, from which he graduated in 1982. (Neither Kopper nor Dodson could be reached for comment for this story. Contacted at home by The Advocate, Caraccio declined to be interviewed. Kopper's parents did not return phone calls for comment.)

After high school Kopper attended Muhlenberg College in Allentown, Pa., before transferring to Duke University, where he studied economics. Then, after earning an advanced degree from the London School of Economics, he worked at Chemical Bank and Toronto Dominion Bank, the parent company of discount broker TD Waterhouse. By 1994 it seemed that Kopper had found his dream job at Houston-based Enron, where he worked in the global finance division and quickly moved up the ranks, becoming CFO Fastow's fight-hand man.

Far less is known about Dodson, 45, who, prior to his role at Chewco, worked in the finance department at Continental Airlines, according to Continental spokeswoman Julie King. (King would not verify Dodson's exact title at Continental nor his reason for leaving the company more than five years ago.) Described as an attractive blue-eyed blond, Dodson is remembered fondly by his college classmates from the University of Texas, which he attended in the early 1980s. "I thought he was one of the sweetest, nicest people I had ever met," says one friend, who asked that his name be withheld because he feared retribution from his Houston business associates. "We were both in business school in a financial accounting study group. I was working on an MBA, and so was he."

Kopper and Dodson met in Houston about seven years ago, according to acquaintances. And as a couple, they continued a pattern of sticking mostly to the margins, report gay Houston residents, who say the former Enron executive and Iris partner spent most of their time with a tight circle of friends. A distant acquaintance, who asked to remain anonymous because he feared being caught up in the litigation surrounding the Enron scandal, says Kopper and Dodson partied with an A-list crowd, traveled a lot, and generally "lived large, with nice homes and nice cars."