Sherron Elizabeth Watkins

Sherron Watkins (born August 28, 1959) was Vice President of Corporate Development at the Enron Corporation. She is considered by many to be the whistleblower who helped to uncover the Enron scandal in 2001.

It has been remarked that her actions cannot be considered whistleblowing in a strict sense, because she only wrote a concerned internal email message to Enron CEO Kenneth Lay warning him of potential whistleblowers in the company and pointing out that there were misstatements in the financial reports. Her memo did not reach the public until five months after it was written. Dan Ackman argued in Forbes Magazine and in the Wall Street Journal that, for this reason, her actions did not constitute whistleblowing and actually helped provide legal cover for Lay.[1]

She testified before committees of the U.S. House of Representatives and Senate at the beginning of 2002 and was selected as one of three "People of the Year 2002" by Time. (The two whistleblowers who joined her as "People of the Year" were Cynthia Cooper of WorldCom and Coleen Rowley of the FBI.)

Watkins was born in Tomball, Texas. She had joined Enron in 1993, having worked for Arthur Andersen the previous eight years. She departed from Enron in November 2002. Since then she has been giving speeches at management congresses and has co-written a book about her experiences at Enron and the problems of the US corporate culture.

Watkins holds a Bachelor of Business Administration (with honors) from the University of Texas, where she was a member of Alpha Chi Omega sorority,[2] and a Masters of Professional Accounting. She is a Certified Public Accountant (CPA).

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Sherron Watkins was in a determined mood as she left her impressive mansion on the outskirts of Houston in Texas on the morning of 22 August last year.

After the short trip to the headquarters of the huge energy company Enron, she settled down to write a memorandum to her boss Kenneth Lay - known to his friend and US President George Bush as 'Kenny Boy'.

It was something that had been weighing on her mind for weeks. Now it was time for action. In her memo, Watkins wrote: 'I am incredibly nervous that we will implode in a wave of accounting scandals.' There was no reply.

Before she handed the six-page note to Lay, Watkins was a woman executive whose every dream as a good corporate high-flyer, wife and mother had come true. She had made it from a small Texas town called Tomball to the boardroom of the most powerful company in the state.

She had recently given birth to a daughter, Marion, and took pride in dropping her off at nursery school on her way to work. Her husband Richard was a loving spouse and her sister Julie was her best friend, whom she invariably called for a quick exchange of news each morning on her mobile phone after each had done the school run. Her house was in the upper-class outskirts of the oil city that her company had made its own, and she was valued and respected by her employer.

But Watkins was troubled. And the memo she wrote as a result of her anxiety changed her life forever - although she didn't know it at the time. It turned the unsuspecting businesswoman doing what she thought was the loyal thing, into the latest in a tradition of great American whistleblowers.

Suddenly, the corporate high-flyer was recast as a heroine who stood up to the corrupt, greedy men who had cashed in their shares to make millions of dollars while their deceived employees were trapped in a 'stock-lock' which prevented them from doing the same, thereby losing their hard-earned savings and pension funds.

On the employees' website - 'Laydoff.com' (as in Lay) - Watkins is heralded as 'Our Hero' on a T-shirt offered for sale. She gets letters from mothers saying they hold her up as a role model for their teenage daughters.

Watkins's mother Shirley said her daughter 'knew she had to say something' about Enron's tricks while they were hidden from hapless employees who continued to buy the company's doomed shares - 'but never imagined that she was going to be the only one'. However, she was. 'Now she's out there in the field all by herself,' says her cousin, Joe Klein.

Not until 15 January this year was Watkins revealed to the world as the woman who had warned Lay - the now resigned and disgraced chairman - of major irregularities in the company's accounting months before the company collapsed into bankruptcy and into the arms of congressional and criminal investigators.

The remarkable thing is that Watkins decided to go into work that morning, expecting to be fired, but instead found herself moved into an even bigger, more luxurious office. 'I don't know the motivation for the move,' said her lawyer, Philip Hilder. 'It might be because they have a lot of room there now.'

Watkins - who is not giving interviews - explained to her sister that she had come to the office because 'work is a haven... because of the security'. Her mansion in the suburbs was surrounded by a noose of reporters and TV outside broadcast trucks. 'Here,' she told Julie, 'no one can get past the parking garage.'

Meanwhile in Oklahoma, Julie had just dropped off her children and while waiting for Sherron to call, switched on the car radio. The newscaster was talking about her sister.

'I Was Like, "Oh my God!",' she told the Washington Post newspaper. 'I drove the rest of the way home with my chin on my chest. [The newscaster] kept talking about her all the way until I pulled into the driveway.' As well they might - for ever since, she has been the toast of America.

Tomball is a town 30 miles from Houston, and full of Kleins - the maiden name of Watkins's mother. Her Uncle Richard runs a local supermarket, family- managed, in defiance of the megamart age. Cousin Matthew runs the funeral parlour. Shirley is now married to the mayor, 'Hap' Harrington; she was born there, like her mother before her and her mother before her.

And Sherron's father, Dan Smith III is the descendant of another mayor from Civil War days. Sherron had a strict Lutheran upbringing - the family had originally come from Germany in the 1830s. 'Lutheran school stressed that you do your best,' said her mother.

Sherron studied accounting at Texas University in Houston and joined the Andersen accounting firm, now coincidentally under fire for its work as Enron's auditor. A transfer to the New York office was a relief from provincial life, with an apartment in Midtown and summers in the Hamptons. Sherron joined Enron eight years ago, hired through a recruitment programme as the firm boomed, having conquered the energy industry thanks to deregulation in Texas by the administration of its then governor, George Bush.

In 1997, aged 37, she married Richard Watkins, another executive in the energy business, whom she met in church. She climbed the company ladder to the level of vice president, not quite high enough to become one of those to luxuriate in the slushing off of millions to so-called 'part nerships' of Enron, many of them offshore.

'Look at that management team,' said her colleague Jessica Uhl. 'There's not a lot of female faces up there and never has been. Sherron's a vice-president, so she's obviously not an outsider. But there is a dividing line up there. If you're not part of the boy's club, maybe that makes it a bit easier to take a big risk.'

Last July, Sherron became an executive in the office of the chief financial officer, Andrew Fastow. Fastow is the man who ran those 'partnership' firms set up by Enron, allegedly connected to the $1.2 billion reduction in shareholder equity Enron suddenly announced last October. He was fired on 8 October. Before then Watkins asked to be re-assigned, 'because', her lawyer told the Washington Post, 'she felt there were severe questions with the accounting and did not want to work with Mr Fastow'. Enron was visibly falling apart, and Watkins seems to have started panicking. 'Has Enron become a risky place to work,' says her memo to Lay, 'for those of us who didn't get rich over the past few years, can we afford to stay?'

Watkins was afraid, however, to contact the then chief executive officer, Jeffrey Skilling. But on 14 August, Skilling inexplicably and suddenly resigned, and his replacement, Lay, invited senior employees to proffer any views they had on company matters, by email, either signed or anonymously. Watkins left her thoughts - anonymously - in a drop-box Lay had posted.

Two days later, there was a company-wide meeting, which came and went without any mention of what Watkins had said. She called a friend who worked at Andersen, who in turn wrote her own memo (which has also turned up in the investigators' box files).

Worried, she drafted her memo, and sent a copy to her mother. 'I thought it was the right thing to do,' Shirley told the Post, 'there was no option about whether or not she was going to send it. She knew she had to say something.'

Watkins remains at Enron, and has made no reported plans to move. But, says Hilder, the atmosphere surrounding her is 'awkward'. She visited her pastor last week, and asked to be added to a prayer chain looking to the church for support in their lives. And there is a chilling twist to the Sherron Watkins story, which suggests that her lawyer's advice to keep quiet - lest she be called to testify at financial or criminal proceedings - is sound. It emerged on Friday night: after the apparent suicide of Cliff Baxter, the former vice chairman of Enron. Baxter had resigned in May last year, but remained as a consultant to the company.

However, when Watkins wrote her memo to Lay, she made a point of telling him that Baxter had been unhappy about Enron's dealings with one of the limited partnerships, LJM, which was run by her former boss, Fastow. 'Cliff Baxter complained mightily to Skilling and all who would listen about the inappropriateness of our transactions with LJM,' she said.

Now, Baxter will complain no more. Sherron Watkins, however, is still around.

https://en.wikipedia.org/wiki/Sherron_Watkins