Features

Reluctant hero

National | While others stood by or cashed in on Enron's deceit, one exec dared to question her company's shell game

Issue: "Illegal siblings project," Feb. 2, 2002

Sherron Watkins never wanted to be a whistle-blower or a star-and certainly not a hero. She was just a 42-year-old bean-counter whose knack for numbers had won her a vice presidency at America's seventh-largest company. With a good salary and a generous retirement plan, she should have been set for life. Regrettably for Mrs. Watkins and thousands of others like her, America's seventh-largest company happened to be Enron.

The spectacular collapse of the energy giant has created the rarest of moments in American public life: unanimous moral outrage among the moral relativists in politics and the media. Congress has planned no fewer than 11 separate hearings into the Enron scandal, with Republicans and Democrats battling to project the greater image of righteous indignation. Meanwhile, Time magazine, that arbiter of uprightness, has condemned the whole episode as nothing less than "a failure of character."

The one hero to emerge from the wreckage of Enron is none other than Sherron Watkins. Of the scores of players-executives and consultants, lawyers and accountants-with access to Enron's numbers, only Mrs. Watkins dared to question the company's financial shell game. In a seven-page memo written to chairman Kenneth Lay last August, she accused her employer of manipulation and deceit, if not outright fraud.

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"We're such a crooked company," she charged, quoting a co-worker who also had seen the books. Enron's huge profits were "nothing but an elaborate hoax," she insisted, and the whole company could come crashing down "if these transactions are ever disclosed in the bright light of day."

"She was just concerned for the company," her mother, Shirley Harrington, told WORLD. (Mrs. Watkins isn't speaking to the press.) "She was trying to get the information to them so that they could quietly correct the situation. She was afraid it would cause the company to go down."

Indeed, the "good Christian girl from a small town where everybody knows everybody" was hardly a gung-ho crusader. She was torn for months over making her concerns known. One of her friends, company treasurer Jeff McMahon, had been transferred when he complained to CEO Jeffrey Skilling about the financial sleight-of-hand. Not wanting to suffer a similar punishment, Mrs. Watkins kept her mouth shut.

When Mr. Skilling abruptly resigned on Aug. 14, the whole company was shaken. Chairman Lay invited all employees to share their concerns at a meeting two days later, but Mrs. Watkins was still afraid to speak out publicly. Instead, she wrote her concerns in a letter and quietly dropped the anonymous document into a box at work.

After another week of uncertainty, Mrs. Watkins called a friend at Arthur Andersen, Enron's accounting firm, to share what she'd found. The next day, armed with her now-famous memo, she finally met with Mr. Lay face-to-face. The chairman assured her that he would look into the matter and take whatever steps were necessary.

Mrs. Watkins couldn't know at the time that in just the two previous days, her boss had dumped nearly 100,000 shares of Enron stock, earning a profit of $1.5 million. Indeed, throughout the summer, top company officials had made billions of dollars exercising stock options at inflated prices before the scandal could render them worthless.

But not Mrs. Watkins. Despite her fears of an imminent collapse, she stuck by her company and refused to dump its stock. Still, she was uneasy. In early September, shortly after confronting Mr. Lay, she went to Carl Hamilton, an associate pastor at First Presbyterian Church of Houston, to ask his advice. She wanted to do the right thing at work, but she was uncertain how to handle the situation.

At her pastor's urging, she started attending a lunchtime Bible study with other professional women in her church. She already was active in the BASIC (Brothers and Sisters in Christ) class at First Presbyterian, which was just winding up a three-year study in the Gospel of John.

"Sherron is probably the most amazed person in the world that this has stirred up front-page headlines all over the world," said Jack Modesett, her Sunday school teacher. "She just believes that she is called to live the truth.... I would say that she reacted based on what she simply believed was right. I don't know that it's any more complicated than that. People on the outside looking in, look for complex motives in Christians. Sometimes we're puzzled as to why people think it's such a big deal."

Her mother agreed. "Sherron has a real strong Christian background. We've always had devotionals in our family every morning before everybody went off to work or school. You just learn to do the right thing.... When my daughter answered the communiqué [from Chairman Lay], she assumed others would be doing the same thing. She didn't know she was going to be the only one."

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