Hella Nation - Evan Wright [106]
When we entered the warehouse I was dismayed to find all but one of the booths were unoccupied. IEG’s dirty secret of running loops of old videotape on its website in lieu of actual live performance would be revealed to the analysts. Surely they would rescind their firm’s offer to underwrite IEG’s stock offering.
But I had forgotten the power of a nude woman. The empty warehouse filled with the sound of hard-leather wingtip shoes scuffling on concrete as the analysts scurried across the room to the one occupied booth. The analysts peered into the booth, decorated to look like a typical suburban teen’s bedroom—assuming the typical teen furnished her room with a single mattress on the floor scorched with cigarette burns and surrounded by an assortment of dildos and butt plugs. One of IEG’s “Arcade girls” leaned up on the mattress, her back supported by a pillow, silently masturbating in front of the video camera, her eyes glazed with boredom. The financial analysts stared speechlessly at first, then began to whisper excitedly among themselves, still keeping their eyes on the girl.
I stepped outside to call the Arcade supervisor in the hope of scaring up some performers. As I dialed, an Arcade girl pulled up in her junker car and stepped out sucking on a menthol cigarette. She was fairly typical of IEG’s live talent—a single mother with little education and a wan complexion indicative of a serious drug or alcohol problem. Standing in front of me, sucking on her menthol, she told me she had come in late because of a toothache.
I asked why she didn’t go to the dentist.
“Can’t pay for it,” she said.
“Don’t you have a dental plan?” I asked. A while back I’d read a profile of Warshavsky in which he’d boasted that IEG offered a full health-benefit plan for its live Arcade performers. Despite knowing what I’d already come to know about him, it hadn’t occurred to me that Warshavsky would lie about providing health benefits for some of his employees, or that a magazine would totally fail to fact-check the claim.
The Arcade girl laughed in my face, flashing stained, crooked teeth. “We don’t have no health plan.”
As she entered the building, the financial analysts emerged. The three of them had become animated as they spoke among themselves. The one with the MBA from Harvard suggested I had better insist on receiving stock options from my boss—Warshavsky—ahead of the initial public offering. He shot me a jocular smile.
The analysts hadn’t picked up on the empty booths, the video cameras with dangling, disconnected wires, the overall seedy, fraudulent vibe of the place. I drove them back to IEG’s offices downtown in my car. Once they were squeezed in, I asked if they really thought the company looked good. The guys in the backseat nodded in unison. The one in the front passenger seat spoke enthusiastically of the company’s potential for revenue growth. Each of them had such clean-cut features, crisp suits, fresh-looking haircuts. The whole drive back I kept sneaking looks at them in the mirror, wondering if they were all in on a corporate stock scam together, or if they were simply that stupid.
Perhaps the greatest irony of Warshavsky’s success in the media and among outside businesspeople was the fact that he was a pornographer whom other pornographers considered too dirty to do business with. Partnerships and traffic deals, even between rivals, are essential to the success of online adult companies, but IEG was unable to participate. “Seth burned a lot of people in the adult business,” explains the president of a competitor. “He can’t buy traffic. He can’t buy ads. So he goes direct and advertises in the media. They say the name of his website every time he gets in the news.”
FOR THE TEN MONTHS that I worked at IEG, rumors of serious fraud circulated around the office. These concerns were even voiced out loud during a department-head meeting in early 1999, when top employees openly speculated that customer credit cards were being suspiciously