HOUSTON -- She was Texas' best: homegrown, church-schooled, smart, the next hope of an influential family in a small town outside Houston. But she wanted to be somebody beyond the oil wells and scrubby plains.
Today, she is. Sherron Smith Watkins, has emerged as the most prescient and principled voice yet in the financing morass that swamped energy dealer Enron Corp.
If a rebel, though, Watkins is no Eastern-style whistle-blower or protester. By the accounts so far, she did not threaten to go public. She did not quit. Call her the public face of Enron's loyal opposition, which tried to save it from the biggest business bankruptcy in U.S. history.
"She just felt duty-bound to do it, for the company's sake," said her mother, Shirley Klein Harrington.
Of course, doing your duty isn't always easy -- and it wasn't for Watkins. She wasn't just worried about Enron when she told former chairman Ken Lay that good ethics could be good business. She fretted about losing her job in retaliation for her blunt words.
"It was not easy for her to come forward because the environment was such and the culture was such that ... everything seemed to be accepted," said her Houston lawyer, Philip Hilder, who specializes in white-collar crime cases.
Apparently sorting out her own liabilities and waiting to testify for investigators, she is refusing interview requests.
Ordinarily, though, she "speaks her mind, and she's a competitor," said her mother.
After finishing in 1982 at the University of Texas, she landed work near home in Houston at Arthur Andersen, one of the profession's elite companies -- well before its Enron embarrassments. She later transferred to New York City where she lived for several years.
Then eight years ago, she came back to Houston to work for Enron. Like her, it was young, fast and self-confident. It swelled in those years, at least by its calculations, into the seventh biggest American corporation.
Over the next several years, Watkins worked its mergers and acquisitions and its fiber-optic cable division. For a time, she was jetting back and forth to South Korea.
Her discomfort, though, began to surface several years ago. Uneasy with accounting methods in one Enron partnership, she was allowed to transfer to another branch of the company in 1996.
But she could find comfort in her own family now. Married to an executive in a Canadian oil company, she gave birth to a girl over two years ago and took on the additional job of mother. She took it seriously, like her other work. She went to programs on child discipline and put her daughter in Sunday school at her Presbyterian church.
At Enron, things turned much worse last year, as recession thickened and Enron stock values crashed. Some executives began cashing out their stock. Watkins' lawyer won't say what she did with hers. Her mother isn't sure how her daughter handled her own stock, but Watkins never advised her mom to sell. She didn't and said she lost a small sum.
At midyear, Watkins began working for chief financial officer Andrew Fastow. Increasingly, she fretted about partnerships he set up. To her understanding, they were backed by shaky financing, open to conflicts of interest, and endorsed by accounting sleights of hand. She quietly asked for advice from colleagues she trusted. Some were asking similar questions in private.
Memo to Lay
The abrupt departure of chief executive Jeff Skilling in August made Watkins even more nervous. She feared the burst of public attention would force the hidden deals into the light and make the company "implode in a wave of accounting scandals," according to the seven-page memo she wrote to Lay, then chairman.
At first submitting the memo anonymously, she later expanded it and added her name. Lay met with her, ordered an internal inquiry, and in a move designed to get her out of Fastow's supervision, made her vice president for corporate development.
In October, Enron was forced to acknowledge losses it had long buried in the partnerships. Investor confidence quickly crumbled, Enron requested bankruptcy protection, and shareholders and workers sued. On Wednesday, Lay, who was chief architect and overseer of Enron almost since its founding in 1985, resigned his post.
Meanwhile, Watkins' lawyer said she is overwhelmed by hundreds of requests for interviews. Neighbor Chris Cagley, also an accountant who contracted with Enron, has watched from close up.
"It's a lot of stress ... in terms of the legal risk and just the attention. I don't think she's the sort of person to seek attention,"
Given that, she appears to be holding up well. "I would be falling apart," said friend and next-door neighbor, Charlotte Ten Brink. "She maintains her sense of humor. We joked about who will play her in the movie: She usually laughs and takes it all in stride."
"She's praying to keep her job and that the company survives," her mother added.