Sherron Watkins was an Enron executive who attempted to warn CEO Ken Lay that the company’s books were being tampered with. Watkins said his concerns were initially dismissed.
“My biggest disappointment is that they really didn’t believe me,” Watkins said.
In 2001, Watkins said she felt like the Greek parable of Cassandra; cursed to know the future but no one believing his prophecies.
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“No one believed me in the fall of 2001,” she said. “They just acted like this was a minor issue on the road and could be handled with good public relations.”
Watkins said she remembers the meeting she had with Enron founder Ken Lay.
She discovered that Enron’s accounting manipulations hid massive debt while exaggerating the amount of money the company actually made.
“I came in with a lot of memos, evidence, Excel spreadsheets, PowerPoints,” she said.
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Watkins added that she also remembered thinking Lay took her seriously, and then asked her if she thought CFO Andrew Fastow was doing a good job.
“I was just stunned, you know? I just sat here and said [him] how the chief accounting officer and the chief financial officer prepared the books; you can’t then conclude that they’re doing a good job, ”Watkins said. “This is the most bizarre question I have ever received, and it’s still hard for me to understand why this question came out of his mouth.”
Watkins, believing at the time that Lay was unaware of the unethical practices, would save the company he founded by cracking down on bad apples and making an honest confession to investors.
“I shouldn’t have gone alone,” she said. “I should have brought more people with me because Ken Lay rejected me as one voice, one opinion.”
Lay died in 2006, shortly after being convicted of several counts of securities and wire fraud and misrepresentation. A judge overturned those convictions since Lay died before being sentenced.
Watkins said as she began to feel the sting of being a whistleblower, Enron collapsed.
The company filed for bankruptcy on December 2, 2001. Federal investigators and Congress then found the work Watkins presented to Lay.
Watkins has become one of the main witnesses to an investigation that has led to dozens of convictions and massive changes in the way companies are allowed to do business.
“I can’t believe it,” she said. “It’s like it was yesterday, but two decades is a long time. “
In 2002 Watkins was named Time Magazine’s People of the Year and co-authored “Power Failure: The Inside Story of the Collapse of Enron”.
There was also a cost. Watkins said she lost friendships and her career trajectory changed forever.
“They see me as the person who blew it up when I am not the one who cooked the books or allowed the books to be cooked,” she said.
Watkins still considers herself lucky. She said the speaking engagements allowed her to “pay the bills” while spending more time with her daughter than a career as a business executive would have allowed.
Watkins now teaches business ethics at Texas State University and corporate governance and leadership at North Carolina University.
“Enron comes back quite often,” she said.
Over the past two decades, Watkins has also traveled the world speaking out against corporate malfeasance.
“The reality is that frauds start out small, so stopping them the moment they’re created is wonderful,” Watkins said.
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