Enron Whistleblower stresses need for ethics in corporate life
Contact: Rene Abadie
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HAMMOND – If your personal value systems are challenged where you are working, then take steps to get out as quickly as you can, the Enron “whistleblower” told a Southeastern audience Tuesday night (April 19).
Sherron Watkins of Houston, whose revelations of corporate wrongdoing at the giant energy trading company launched its demise, said she thought she could approach Enron CEO Ken Lay with her information about accounting irregularities only to learn her warnings were too little and too late. Lay, now deceased, looked for ways to fire her from the company.
“Most people who speak the truth to power are crushed,” Watkins said.
Watkins delivered Southeastern’s James and Evelyn Livingston Lecture in Business Ethics, a function sponsored by the College of Business. The lecture, founded in 1984 and considered one of the oldest series of its kind in the nation, honors the late James Livingston, a prominent Hammond businessman, and his wife Evelyn, an active community volunteer.
Watkins explained that in early 2000, Enron was the seventh largest company in the United States based on revenues, with stock prices rising rapidly. It was one of the nation’s leading providers of electricity, natural gas and energy trading. As it collapsed, its stock plummeted from $35 a share to nine cents a share.
“Enron was THE place to work in Houston,” she emphasized. “We attracted top talent from all over the country. We had Ivy League folks throughout.”
Enron was considered one of the most innovative companies in America by a Fortune Magazine ranking, Watkins said.
“The problem with that is when you are constantly pushing your employees to innovate, innovate, innovate, you’re pushing them to the dark side; and the dark side of innovation is fraud,” she said.
Watkins explained that the top people associated with Enron were selling off their stock two years before the bankruptcy and making significant profits.
“It’s the same song, different verse that we saw with the Wall Street scandals last year,” he added. “The leaders of the companies walk away with millions while the shareholders get nothing.”
Among the signs and tips she offered students who find themselves working in corporations in which they have reservations were:
-- recruit others to also look into possible wrongdoing so that there is strength in numbers;
-- if you suspect something is being done that appears to be wrong, at the very least protest it;
-- beware if the company is using a high degree of consulting services; highly paid consultants, as in the case of the accounting firm Arthur Anderson’s role at Enron, too often look the other way when there is suspicious activity.
Watkins said she thinks a possible game-changer in corporate scandals could be the concept of public exposure of corporate wrong-doing via online sites akin to Wikileaks.