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."

Tim Brookover, president of the Houston Lesbian and Gay Community Center, offers a more sober assessment. "They were an unknown quantity," he says. "And many in the gay community don't want to comment because they were so much in the background."

Though Houston has a large gay population, the people who live there are reluctant to talk about Kopper and Dodson because most people in the community know each other quite well, sources say. Enron also has played an important role in the city's economy, and until recently, speaking out against it could be compared to speaking out against the Big Three automakers in Detroit.

Despite their tendency to stay in the background, Kopper and Dodson donated generously to gay causes. In 2001, for example, they gave between $5,000 and $10,000 to the Human Rights Campaign, giving them a place in that group's Federal Club and at HRC's annual fund-raising dinner in Houston. "They are major donors," says Jim McElgunn, an HRC officer based in Houston. "But they have not been active volunteers."

In 2001 the couple also supported a political action committee formed in an effort to defeat Houston's antigay Proposition 2, which voters ultimately passed, preventing the city from providing benefits to the same-sex partners of municipal employees. According to Grant Martin, the chairman of the committee, Kopper and Dodson donated $12,500. Enron also chipped in $10,000.

But activism isn't the only place Kopper and Dodson spent their money. The former Enron executive is reported to have a wardrobe full of Armani suits, and the couple's 5,269-square-foot home in the tony Houston suburb of Avondale Place is valued at $1.4 million. The house reportedly features a Cinderella-like glass staircase, an interior balcony, a swimming pool, and a large garage--an appropriate feature, since the couple has four BMWs.

Kopper was certainly well-compensated for his work at Enron. His salary, bonuses, and stock options added up to more than $3.6 million the year before Enron's fall, according to one report. But it remains unclear how accepted he actually was in the company's good-old-boy corporate culture. Enron had adequate, though not stellar, policies regarding gay and lesbian employees. Offering same-sex domestic-partner benefits and a nondiscrimination policy that included protections for sexual orientation, the company earned in 2001 a 6 on a 10-point index used by HRC of gay-friendly companies.

Yet Kopper's career seemed to advance--with an uncharacteristic degree of openness on his part as a gay man--in the company's hard-driving atmosphere. He served on a Enron diversity committee and developed a remarkably close relationship with Fastow, helping him structure many of Enron's illegal partnerships. Colleagues referred to Kopper as one of "Andy's Boys," a select circle of finance executives who did Fastow's bidding, according to The Wall Street Journal.

But while Kopper and Fastow were neighbors--Fastow's parents even purchased one of Kopper and Dodson's former homes with an $850,000 mortgage secured by their son--the Journal also reported that the two rarely socialized. Fastow was part of the superelite in Houston, the report said. It would seem Kopper's sexual orientation prevented him from being a part of that crowd.

In the end, it may have been Kopper's executive-but-not-elite status that led investigators to pursue him. In order to catch the bigger fish, investigators typically seek out an executive who is not at the top of the corporate food chain but who nevertheless has made headlines, says Gilbert Geis, a professor emeritus in the Criminology, Law, and Society department at the University of California, Irvine.

"He was relatively a small fry," says Geis, commenting on Kopper's role as the outsider. "He was staging orders from someone else, but he was not an initiator."

Kopper fit the bill for a number of other reasons as well. "Generally speaking, the biggest deal is to avoid prison, and [Kopper] may" avoid the sentence of up to 15 years his charges could bring, says Geis, who has studied white-collar crime for 50 years.

But, he adds, it very likely is Kopper's sexual orientation that helped prosecutors cinch the plea bargain deal, in addition to Kopper's desire to protect Dodson from prosecution. "[Kopper] might also have felt that the fact he was gay might have handicapped his case with a jury," GeLs says, adding that by choosing a plea bargain, Kopper avoided a trial, which would have made public many more details of his and Dodson's personal life.

Because of Kopper's confession, he and Dodson will forfeit the $12 million Kopper admits to stealing from investors. Additionally, the Securities and Exchange Commission, the governing body for publicly traded companies, says it will permanently bar Kopper from acting as an officer or director in any publicly traded company. If he's lucky, his plea bargain will help him avoid prison completely, but he may still wind up with a reduced sentence or probation.

To many, it seems like a small price to pay. Searching for the deeper and personal motivations behind Kopper's crime, Witeck recalls Andrew Tobias's book The Best Little Boy in the World. The concept, Witeck says, is that gay children try everything possible to please their parents and supervisors in an effort to compensate for the perceived flaw of their sexuality.

Something similar may have been at play with Kopper at Enron, he says. "If you are their ideal protege, you have a wife or family, but if you don't, you might do the heavy, lifting and the dirty chores," Witeck says. "Seeking parental love, kicks do wacky things to get approval, and perhaps some gay people translate that into the executive suite. But that is not a good sign for the rest of us."

Quittner has also written for The New York Times and Business Week.