Watkins Steps Down At EnronNov 15, 2002 | AP
Sherron Watkins, an executive at Enron Corp. who tried to warn former chairman Kenneth Lay about the company's questionable accounting practices months before it collapsed, resigned from the company.
Watkins, 43, plans to start a consulting business focused on corporate compliance issues, her attorney said Friday. Watkins, who is working on a book about Enron's demise, will also continue to give lectures about her experiences and business ethics.
Watkins, a vice president of corporate development at Enron, resigned voluntarily, a company spokesman said.
In January a congressional committee revealed memos that Watkins had written to Lay in August 2001 warning that improper accounting could cause Enron to "implode in a wave of accounting scandals."
The company filed for bankruptcy Dec. 2 after revelations about years of inflated profits and hidden debt.
Enron's collapse was only the first in a series of corporate scandals that sent investors fleeing from a volatile stock market. Enron's stock collapse destroyed employee retirement accounts, and the bankruptcy cost more than 4,500 workers their jobs.
Testifying before Congress, Watkins placed the blame for the company's collapse on former chief executive Jeffrey Skilling, former chief financial officer Andrew Fastow and others in the financial group, and the failure of Enron's outside auditors to blow any whistles.
She defended Lay, saying she believed Skilling misled Lay and that the accounting intricacies she tried to point out were over the former chairman's head.
Skilling sharply disputed her claims before Congress, saying, "I never duped Ken Lay." Watkins met with Lay days after Skilling resigned in August 2001 after only six months on the job, citing personal reasons.
Watkins discovered the accounting problems while working for Fastow, who was indicted last month on 78 counts charging him with masterminding complex financial schemes that enriched him and helped doom the company.
Fastow, 40, is free on $5 million bond. A pretrial conference has been set for Jan. 13 before U.S. District Judge Kenneth Hoyt.
Watkins said Fastow tried to get her fired when he found out that she had met with Lay, and that she was subsequently transferred to the job she held until Friday.
Watkins attorney, Philip Hilder, said she has helped handle bankruptcy matters for Enron, but that her work volume dwindled over the last several months.
Hilder said she remained on Enron's payroll for so long after the collapse because a change would have been disruptive for her or any future employers given her instant fame.
John Dienhart, director of the Global Business Ethics Center at Seattle University, said the praise heaped upon Watkins by Congress doesn't mean other corporations would welcome her in their executive suites.
"Companies want loyalty and truthfulness," Dienhart said. "If you've spilled the beans, even for good reasons, you won't necessarily be regarded well."