We obtained high dispersion spectroscopy of CI Cam , the optical counterpart of XTE J0421+560 , two weeks after the peak of its short outburst in 1998 April . The optical counterpart is a supergiant B [ e ] star that is emitting a two-component wind , a cool , low-velocity wind and a hot , high-velocity wind . The cool wind , which is the source of narrow emission lines of neutral and ionized metals , has a velocity of 32 km s ^ { -1 } and a temperature near 8000 K . It is dense , roughly spherical , fills the space around the sgB [ e ] star , and , based on the size of an infrared-emitting dust shell around the system , extends to a radius between 13 AU and 50 AU . It carries away mass at a high rate , \dot { M } > 10 ^ { -6 } M _ { \odot } \textrm { yr } ^ { -1 } . The hot wind has a velocity in excess of 2500 km s ^ { -1 } and a temperature of 1.7 \pm 0.3 \times 10 ^ { 4 } ~ { } K . From an ultraviolet spectrogram of CI Cam obtained in 2000 March with Hubble Space Telescope , we derive a differential extinction E ( B - V ) = 0.85 \pm 0.05 . We show that the distance to CI Cam is greater than 5 kpc . Based on this revised distance , the X-ray luminosity at the peak of the outburst was L ( 2 - 25 keV ) > 3.0 \times 10 ^ { 38 } erg s ^ { -1 } , making CI Cam one of the most luminous X-ray transients . The ratio of quiescent luminosity to peak luminosity in the 2 – 25 keV band is L _ { q } / L _ { p } < 1.7 \times 10 ^ { -6 } . The compact star in CI Cam is immersed in the dense circumstellar wind from the sgB [ e ] star and burrows through the wind producing little X-ray emission except for rare transient outbursts . This picture , a compact star traveling in a wide orbit through the dense circumstellar envelope of a sgB [ e ] star , occasionally producing transient X-ray outbursts , makes CI Cam unique among the known X-ray binaries . There is strong circumstantial evidence that the compact object is a black hole , not a neutron star . We speculate that the X-ray outburst was short because the accretion disk around the compact star is fed from a stellar wind and is smaller than disks fed by Roche-lobe overflow .