We don’t know much about Sherron Watkins. We haven’t met her in our living rooms, on TV in front of a bank of microphones, not yet. But because she wrote a letter to her boss, we know she knew, about the “Condor” and “Raptor” partnerships and the accounting and the doom Enron was facing. We know that in August she told them — her boss, Ken Lay, and then her friend at Arthur Andersen, who then told Andersen’s head Enron auditor, David Duncan, who’s now telling Congress. And so we know that they all knew too.
Sherron Watkins, according to her lawyer and press reports, is Enron’s vice president of corporate development. She is 42 years old and lives in Houston with her husband Richard. She grew up in a Houston suburb called Tomball, the daughter of two secondary school teachers, and graduated from the University of Texas. She was a sorority girl.
After nearly a decade at Enron she was high up enough, or grumpy enough, to send the boss a pull-no-punches, put-it-on-record letter telling him — for a very detailed seven pages — that his company was more or less a Ponzi scheme, and it sounds like she knew she wasn’t telling him anything he didn’t already know. She was circumspect enough to do some networking across the fence at Arthur Andersen and put the same concerns to Andersen’s Enron man, David Duncan, and two other partners.
And she was plenty pissed. “I am incredibly nervous that we will implode in a wave of accounting scandals,” she wrote to Lay. “My 8 years of Enron work history will be worth nothing on my resume, the business world will consider the past successes as nothing but an elaborate accounting hoax.” Accounting for the failed partnerships, she said, was “a bit like robbing the bank in one year and trying to pay it back 2 years later,” and she just didn’t think it could be done. “We are under too much scrutiny,” she wrote, “and there are probably one or two disgruntled ‘redeployed’ employees who know enough about the ‘funny’ accounting to get us in trouble.
“Has Enron become a risky place to work? For those of us who didn’t get rich over the last few years, can we afford to stay?”
Sherron Watkins still works for Enron, and she returned to the office Tuesday morning just as her memo, released anew and in full by congressional investigators, covered front pages across the country. Her lawyer says there were no retaliations by those colleagues still around these days; a source close to her, though, told the LA Times that Watkins was made to feel “an outcast.” Her husband called her a “team player” and said he was proud of her.
In the news media, it is “Enron whistle-blower” Sherron Watkins, even though Watkins never really blew a whistle. A whistle-blower would have written that letter to the Houston Chronicle, and long before August; Watkins wrote it to Ken Lay, and warned him of potential whistle-blowers lurking among them.
The shriek of Sherron Watkins’ letter didn’t reach public ears until five months after she wrote it, and even in August concerns like hers seem to have been old news in corner offices, and probably some cubicles, at both companies. And she may well have written it purely to cover herself, to protect that resume when the inevitable happened — the “CYA” letter is as old as business itself. But because she got a reaction — made sure she got a reaction — she did start a daisy chain of provable what-they-knew-and-when-they-knew-it that has now put investigators on a pretty pungent and promising trail.
