Overview

Sherron Smith Watkins is a former Enron Vice President of Corporate Development who became one of the most famous whistleblowers in American corporate history. On August 15, 2001, Watkins sent an anonymous seven-page memo to Enron Chairman and CEO Kenneth Lay warning that the company would "implode in a wave of accounting scandals." The memo detailed concerns about CFO Andrew Fastow off-balance-sheet partnerships (LJM, Raptors) and questioned whether Enron could survive their unwinding. When Lay received the memo, he directed outside counsel Vinson & Elkins to investigate. However, V&E had earned $35 million or more per year from Enron and had helped structure some of the very transactions Watkins questioned; predictably, they found nothing wrong. Watkins was a CPA who had previously worked at Arthur Andersen (Enron auditor) for eight years before joining Enron in 1993. After her identity became known, she testified before the Senate Commerce Committee on February 14, 2002, providing devastating testimony about the culture of fraud and intimidation at Enron. She was named one of Time magazine Persons of the Year for 2002 alongside WorldCom whistleblower Cynthia Cooper and FBI whistleblower Coleen Rowley. She co-authored "Power Failure: The Inside Story of the Collapse of Enron" (2003) with journalist Mimi Swartz. Although Watkins is celebrated as a whistleblower, critics have noted she did not report externally to the SEC or law enforcement; she reported internally to the CEO and has said she was trying to save the company rather than expose it. The Sarbanes-Oxley Act of 2002, passed in direct response to Enron, included whistleblower protections partly inspired by her experience.

Key Affiliations

Controversies & Concerns

Related Investigations (1)

Known Associates & Connections

Sources & Documentation

3 documented sources from official records, investigations, and reports