Watkins shines as hero in the sad saga of Enron
By BRENT JANG
Saturday, February 9, 2002 - Print Edition, Page B7
CALGARY -- Some time this month, Enron executive Sherron Watkins is
expected to appear in front of a U.S. congressional committee investigating
Enron's collapse, and her testimony should be worth the wait.
Ms. Watkins, the company's vice-president of corporate development, wrote a seven-page memo last
summer questioning Enron's troubling maze of accounting methods. "I am incredibly nervous that we
will implode in a wave of accounting scandals," she wrote in August to Ken Lay, Enron's chairman at
the time.
Two months later, Houston-based Enron acknowledged that it had overstated its profit and
underreported its debt. Ms. Watkins was thrust into the spotlight last month when her prescient
memo was released by congressional investigators, who found it buried among 40 boxes of
subpoenaed documents seized from Enron.
There seem to be several people cast as villains at Enron and its auditors, Arthur Andersen. Ms.
Watkins, however, deserves to star in the role of hero in this corporate tale sadly lacking in deeds
worth praising.
Her husband, Rick, is vice-president of corporate development for Canadian Superior Energy, a
Calgary-based oil and gas producer. Mr. Watkins, 51, commutes between his Calgary office and his
family's Houston home (sometimes in one-week stints). He points out that his wife never sought any
publicity, and she's uncomfortable with being portrayed as a whistle blower.
Whatever the label, Mr. Watkins believes his wife acted courageously in attempting to halt Enron's
dubious accounting practices.
It took courage for her to write a detailed memo expressing frank views about her employer's "funny
accounting" of complex partnerships -- to her boss, no less.
"She's always done the right thing," Mr. Watkins said. "People have called her brusque or abrasive.
She probably can seem that way, but I would say that she brooks no nonsense, either from
subordinates or her peers or her superiors, for that matter. She just doesn't."
Ms. Watkins, through her lawyer Philip Hilder in Houston, is declining requests for interviews. Her
blunt memo, however, speaks volumes about her indignation over the "veil of secrecy" surrounding
Enron last summer.
In her missive (now seen as a smoking gun demonstrating Enron's "elaborate accounting hoax"), she
expressed surprise to Mr. Lay about the resignation on Aug. 14 of Jeffrey Skilling as Enron's chief
executive officer.
Mr. Skilling's "abrupt departure will raise suspicions of accounting improprieties and valuation
issues," wrote Ms. Watkins, 42, a former Arthur Andersen accountant who is still working for Enron,
which filed for bankruptcy protection in December.
She didn't plan to be a whistle blower. She didn't intend for her criticisms to be made public one day,
and she didn't go running to the media.
She thought long and hard before she wrote the memo, and it was with great trepidation that she sent
it.
Garnering international attention over the memo has been a whirlwind experience for Ms. Watkins,
who grew up in the small community of Tomball, Tex., near Houston.
In the early 1980s, she completed a bachelor's and a master's degree in accounting at the University
of Texas. She quickly landed a job at Arthur Andersen's Houston audit office, and then transferred to
New York, where she later changed employers.
In 1993, she moved back to Houston to work for Enron, a fast-growing energy company back then.
She married Rick Watkins in 1997, after meeting him through mutual friends at Houston's First
Presbyterian Church. They have a daughter, Marion, who's now 2½ years old.
Ms. Watkins sounded the alarm bells in the best way she knew how, and with some risk to her own
career. She wanted to remain loyal, yet felt compelled to articulate her fears about Enron's future.
In one passage in her memo, she described how "Cliff Baxter complained mightily to [Mr.] Skilling and
all who would listen about the inappropriateness of our transactions." Mr. Baxter, a former Enron
vice-chairman who resigned in May, 2001, was found last month in his car with a gunshot wound to
the head. His death has been ruled a suicide.
Amid this unfolding corporate drama and human tragedy, Ms. Watkins is preparing to tell the
congressional committee about the story behind her memo.
The response to the memo being made public "has been overwhelmingly positive, and she's garnered
some feeling of support from that," Mr. Watkins said. "We're holding up okay. Being thrust into the
public spotlight like this has been stressful for us."
bjang@globeandmail.ca
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