Posted 10:54 AM by Robert

Be Mine

For weeks the only picture of Sherron S. Watkins appearing in the media seemed to be that curious, blurred photograph which brought to mind a description of Anna Louise Strong, a particularly foolish Stalin apologist: “an enormous woman with a very red face, a lot of white hair, and an expression of stupidity so overwhelming that it amounted to a kind of strange beauty.” How misleading. Ms. Watkins is a putative blond, but there is more to the difference than that.

One hopes that former Enron chief executive, Jeffrey K. Skilling, and its former chairman, Kenneth L. Lay, found time in their undoubtedly busy schedules yesterday to have a nice big box of chocolates delivered by special courier to Ms. Watkins, known as the author of the August 15, 2001 memo to Mr. Lay warning that Enron might "implode in a wave of accounting scandals." Ms. Watkins testified before a subcommittee of the House Energy and Commerce Committee, which can now be credited with a wry and delicious sense of humor for having her appear on Valentine’s Day! Who knew?

Ms. Watkins, fresh from her recent beatification by the media as a sacred “whistleblower,” gave Mr. Lay a “pass” in regard to the most peculiar goings-on at Enron. Ken Lay? The Chairman who had wowed the most sophisticated heads of Wall Street for those many years? A mere dupe, according to Ms. Watkins, he just never really understood, he was largely unaware of the severity of the company's troubles, he just "didn't get it." (This last echo from the Clarence Thomas hearings is a particularly droll touch on Ms. Watkins’ part.) Well, if she is right we now can just put this whole thing behind us as far as Mr. Lay is concerned. While another public company is unlikely to engage Mr. Lay as its chairman in the foreseeable future, although he has recently come on the market, Congress has not yet criminalized - or even made civilly actionable - the status of “dupe,” perhaps evidence of a robust instinct for self preservation. That certainly earns Ms. Watkins a chocolate kiss from Mr. Lay.

But what of Ms. Watkins much harsher words for Mr. Skilling? Ms. Watkins accused him of being “well aware of partnership deals that led to the company's collapse,” in the bizarre phrasing of Richard A. Oppel in his New York Times report . Of course, every company’s chief executive is expected, even required, to be “well aware of partnership deals” that the company enters into, the Times’ suggestion to the contrary notwithstanding. Does the chief executive of the Times make a virtue of NOT being well aware of his company’s partnerships?

But this is a mere quibble compared to Ms. Watkins’ stated reason for “accusing” (if that’s the right word) Mr. Skilling as she did. It seems that in Ms. Watkins’ view Mr. Skilling was a very “hands on” executive, and Ms. Watkins therefore just felt it was very hard for her to believe that he wasn’t “well aware of partnership deals.” She didn’t actually have knowledge, but she was sure of it. Bruce Hiler, a lawyer for Mr. Skilling, was required by the kabuki rules of his profession to suggest that she was an uninformed opportunist, a characterization Mr. Hiler offered while no doubt rushing out to attend the all-night celebration at Mr. Skilling’s residence. "Everything Ms. Watkins has said about my client's involvement with these issues has been hearsay, rumor or her opinion," Mr. Hiler said. "She does not have a factual basis for these statements. Ms. Watkins is entitled to her opinions; she is not entitled to her own facts." And everyone in that subcommittee room knows that Mr. Hiler has quite a point.

Yes, Ms. Watkins is a woman of parts. Indeed, one must stand in blank admiration of a person who has achieved hagiographic status for writing an unsigned internal letter which includes not one hint of concern for the shareholders or employees of Enron, but does evidence a touching anxiety that in the wake of her predicted implosion “My eight years of Enron work history will be worth nothing on my résumé.” And while Mr. Watkins now indicates her belief that Enron was wickedly withholding much invaluable information from the market, that belief did not deter her from unloading tens of thousands of dollars of her Enron stock to unwitting public suckers, nor did her stock sales seem to dull her luster in the eyes of Congress and the media. And, when asked by the subcommittee why she had not taken her concerns to the Securities and Exchange Commission, Ms. Watkins engagingly explained that she had hoped for a quiet, inside repair job, where a call to the SEC would have hastened Enron's demise. So we are expected by Ms. Watkins to believe that she hoped that Enron could quietly repair accounting irregularities so serious that she believed "the business world will consider the past successes as nothing but an elaborate accounting hoax" (to quote from her August 15 letter) without ever attracting the attention and investigation of the SEC. Forgive me, I must demur, but without for a moment losing any of my admiration for the sheer technical daring of Ms. Watkins' execution.

Perhaps the blur in that much-reproduced photograph was evidence of Ms. Watkins’ then-ongoing mutation into a hybrid of Mother Theresa and Texas Good Ole Boy, a process now apparently complete. The Watkins coverage today shares front-page space in the Times with a report that Texas scientists have now successfully cloned an unspeakably adorable kitty cat. But Ms. Watkins is proof that kitty by no means marks the limits of Texas recombinant technology.