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In February, 2005, I received a call from an FBI agent who wanted to ask me some questions about an old boyfriend of mine, a guy named Jeff Skilling. The former CEO of Enron, as well as ex-chairman Ken Lay, had invested a combined $270,000 in an Internet startup of mine named Photofete.
I was surprised by the phone call. Photofete was a minor footnote in the Enron saga. The company, which archived digital photos, graphics, and video, flamed out by the end of 2002 -- and merited barely a mention in the thousands of articles, books, reports, and documentaries about Enron. I recounted Photofete's sad story to a pair of clean-cut FBI agents for about an hour in a Manhattan skyscraper -- and never expected the matter to come up again.
When the criminal trial of Skilling and Lay began, I barely paid attention. But on the morning of Monday, Apr. 17, a friend BlackBerried me a message that forced me to tune in: the news that prosecutors had raised Photofete in their cross-examination of Skilling.
IN THE LIMELIGHT. Over the course of the next week, my long-forgotten company suddenly became front-page news. Skilling and Lay admitted that they had not disclosed their investment in Photofete, though I wish they had! That appeared to constitute a clear violation of the company's ethics rules -- one of the few times the two defendants unambiguously crossed a line (though the government doesn't maintain that the episode violated any laws).
Skilling's and Lay's efforts to explain their actions got them into even hotter water. "Rules are important," Lay told the jury, "but you shouldn't be a slave to rules either." Prosecutor Kathy Ruemmler loved that quote so much that she made it a highlight of her closing argument.
My response to my sudden celebrity was to want to lock myself in my bathroom and curl up in a corner. Not unlike many of Enron's other vendors -- not to mention its employees -- I had suffered a loss and rebuilt my life over the past five years. After working from 7 a.m. until 2 a.m. nearly every day for two years, I had watched a clear business opportunity evaporate. Then I built a new outfit in the same field called Secure Digital Assets (Secure Digital Assets). But now I worry that my own good name will be tarnished by having been dragged into the Enron drama. I also wonder whether the Justice Dept. really needed to raise Photofete at all. Didn't the agency have any stronger evidence?
In truth, I have no idea what Skilling and Lay told Enron's directors about Photofete. If they didn't disclose their stakes in the company, I wish that they had. At the time that they made their investments, in 2000 and 2001, I thought that having the duo involved with the company gave Photofete credibility.
BOLD SUPPORTER. When I originally approached Jeff early in 2000 about making the investment, he and I had not dated for over a year. Nonetheless, he met with me to discuss the idea and encouraged me to think beyond my client base, raise more money than I had originally planned, and aim for a much larger market. He was bold and self-confident when it came to business ideas -- quite a contrast from the shy and stammering guy who had left a message on my voice-mail asking me for a date in 1997, after I shot his photo for a BusinessWeek story.
I don't know if Jeff violated any laws. But I am not surprised that he has defended himself so forcefully at trial. I remember a conversation that the two of us had while riding a train to Gatwick airport outside London. We debated whether or not talented people always succeeded in life. I was a photographer at the time and argued that a lot of worthy artists never got the recognition they deserved. He found that all but impossible to believe. Jeff simply could not accept that it was possible for talented people to fail. I wonder if he still feels that way.
Binder met Skilling when taking his portrait for BusinessWeek. She is the founder of Secure Digital Assets
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