The Women of Enron : The Best Revenge

Douglas "Sandy" Warner, retired chairman of J.P. Morgan Chase & Co., is watching Sherron Watkins. John Thornton, president and CEO of Goldman Sachs, is watching Sherron Watkins. The founding deans of Yale Law School (or their portraits, anyway, gazing regally from the walls of the hallowed university's classroom) are watching Sherron Watkins. Even Sherron Watkins is watching Sherron Watkins.

We're at the Yale CEO Leadership Summit, an off-the-record, behind-the-velvet-rope annual bull session of corporate big shots sponsored by Yale School of Management associate dean Jeffrey Sonnenfeld, and everyone is riveted to the video screen in the front of the room. Playing is a scene from the made-for-TV cheesefest "The Crooked E," in which Watkins confronts her boss, Ken Lay, about the financial shenanigans at Enron. Leaning for-ward deferentially, her voice quivering just a bit, the fake Watkins says her piece, is thanked by Lay and then abruptly ushered out of the room. She's a nobody. But when the lights come up in the room less than two years after that critical meeting, every head swivels to catch a better look at the brassy Texas broad in the baby-blue suit. The real Sherron Watkins charms them with a big smile. Even in this room of corporate titans, she is definitely somebody.

Accolades, invitations, introductions -- it's pretty much the way life has been for Watkins, 44, since that day in January 2002 when congressional investigators leaked the memos that she had written to Lay the previous August. She warned that Enron -- the seventh-largest company in the country and one of the top stock performers in the bull market -- was about to "implode in a wave of accounting scandals." Watkins hoped that Lay would accept her analysis and put things right before the world figured out that Enron's profits were as illusory as a Siegfried & Roy spectacular. We all know what happened next.

For many former Enroners, the past two years have been a study in downward mobility, as jobs, pensions, and reputations have evaporated. But for Watkins, since that terrifying morning when she got ready to go to work and found a phalanx of klieg lights outside her front door, life has taken a distinctly positive twist. She has cowritten a book, Power Failure (Doubleday, 2003), about her experiences, sharing a $425,000 advance with a co-author. She's hit the lecture circuit, making as much as $35,000 a pop to tell adoring audiences her story -- although, says her husband Rick, the money still doesn't come close to those wonderful bonuses doled out during Enron's heyday. In 2002, Time magazine named her Person of the Year, along with the women who sussed out funny business at WorldCom and the FBI. Diane Sawyer, Matt Lauer, and the 60 Minutes staff sent her flowers and cards (she finally picked Lauer to tell her story on national television). At the Yale summit, one attendee made a point of telling her that she was a folk hero. Even Warren Buffett has invited her to stop by for a chat the next time she's in Omaha.

That's pretty glamorous stuff for a onetime accountant from Tomball, Texas. "Isn't it kinda funny," she says, stopping every so often in the middle of the Yale campus to scuff up her brand new -- and slippery -- heels, "that Ken Lay is sitting at home and people are coming up to me and saying, 'We gotta get you to Davos next year'?"

Although Watkins seems to have adjusted to celebrity rather effortlessly, she's still the smart, funny, outspoken, and, er, profane woman we saw testifying before a congressional panel, keeping her cool while former Enron CEO Jeffrey Skilling tried his best to bore holes into her with his eyes. "Oh shit!" she yells out in the middle of a quiet restaurant after an errant chunk of Vietnamese chicken lands perilously close to her blue suit with brown polka-dot trim. "Pardon my French." An oily chicken stain, after all, might distract some of these execs from focusing on Watkins's new business idea, and that would be a major opportunity missed. "I'm not going to be in demand on the lecture circuit all the time," she says. "[This is] a public platform that hopefully I can use for good."

Like a surprising number of other veterans of the corporate scandal wars, Watkins thinks her future is in the field of governance. Once all of the speaking engagements and high-level meetings dry up, she plans to open a not-for-profit (how un-Enron -- or maybe how very like Enron) consulting firm that will help companies do annual "board checkups," spotting problems before it's too late. "Corporate governance on paper means jack all," she says. "Procedures mean jack all. It's more about the relationship between the board and upper management."