Enron whistleblower, Sherron Watkins, now teaches business ethics 20 years after companies fall — Transcript

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1. 0:02december 2nd 2001 the day end run
2. 0:06declared bankruptcy bringing the energy
3. 0:08company's epic scandal out of the dark
4. 0:10and into the light it ruined lives led
5. 0:13to two dozen convictions and resulted in
6. 0:16sweeping government reforms a corporate
7. 0:18collapse that rocked houston robert
8. 0:20arnold covered the fall of enron joel
9. 0:22eisenbaum covered the trials that
10. 0:24followed and now tonight 20 years later
11. 0:27both have special reports live from the
12. 0:30old enron building in downtown houston
13. 0:33robert joel
14. 0:36chris i would say over the years robert
15. 0:37and i have definitely covered our fair
16. 0:39share of enron stories and what we try
17. 0:42to never forget are the people involved
18. 0:44and speaking of which you just talked to
19. 0:46one of the key players robert sharon
20. 0:48watkins she was a vice president with
21. 0:50enron who tried to warn ceo ken lay the
22. 0:52company's financials were being
23. 0:54manipulated she says at first her
24. 0:56concerns were dismissed then federal
25. 0:58investigators found her work
26. 1:01my biggest disappointment was that
27. 1:04i was really
28. 1:05you know not believed in 2001 sharon
29. 1:08watkins says she felt like the greek
30. 1:10parable of cassandra cursed with knowing
31. 1:12the future but no one believing her
32. 1:14predictions no one believed me in the
33. 1:16fall of 2001. they just acted as if this
34. 1:20was a minor hiccup in the road and could
35. 1:22be
36. 1:22handled with some good pr watkins
37. 1:25remembers the meeting she had with enron
38. 1:27founder ken lay watkins had discovered
39. 1:29enron's accounting manipulations were
40. 1:30hiding massive debt while over inflating
41. 1:33how much money the company was actually
42. 1:35making i did come armed with a lot of
43. 1:37memos and evidence excel spreadsheets
44. 1:40power points watkins remembers thinking
45. 1:42lay was taking her seriously then he
46. 1:46asked her whether she thought chief
47. 1:47financial officer andy fastow was doing
48. 1:50a good job i was just dumbfounded you
49. 1:52know i've just sat here and told you how
50. 1:54the chief accounting officer and chief
51. 1:56financial officer have cooked the books
52. 1:58you can't then conclude they're doing a
53. 2:00good job watkins believing at the time
54. 2:03lay was unaware of the unethical
55. 2:04practices would save the company he
56. 2:06founded by cracking down on bad apples
57. 2:08and making an honest admission to
58. 2:10investors i shouldn't have gone by
59. 2:12myself
60. 2:14i i should have gotten more people to go
61. 2:16with me because ken lay dismissed me as
62. 2:19one lone voice one loan opinion and just
63. 2:21as watkins was feeling the sting of
64. 2:23being a whistleblower enron collapsed
65. 2:26federal investigators and congress then
66. 2:28found all of the work she had presented
67. 2:30to ken lay watkins became one of the
68. 2:33main witnesses in an investigation that
69. 2:35led to dozens of convictions and massive
70. 2:37changes in how corporations are allowed
71. 2:40to do business can't believe it feels
72. 2:42like yesterday but two decades is a long
73. 2:44time in 2002 watkins was named one of
74. 2:47time magazine's person of the year and
75. 2:49she co-authored power failure the inside
76. 2:52story of the collapse of enron but there
77. 2:54was also a cost she lost friendships and
78. 2:56the trajectory of her career was forever
79. 2:59altered they view me as the person that
80. 3:01that blew everything up when i'm not the
81. 3:03one that cooked the books or allowed the
82. 3:06books to be cooked watkins still
83. 3:08considers herself lucky she teaches
84. 3:10business ethics at texas state
85. 3:11university in corporate leadership at
86. 3:13north carolina university enron comes up
87. 3:16quite often and over the past two
88. 3:18decades she's traveled the world
89. 3:20speaking out on corporate malfeasance
90. 3:22the reality is frauds start small so to
91. 3:25stop them
92. 3:26at their very inception is wonderful
93. 3:30one of the images i will never forget
94. 3:32from 20 years ago is all the people who
95. 3:34came pouring out of these buildings
96. 3:36after finding out they had lost their
97. 3:37jobs and in many cases their life
98. 3:38savings i mean it was absolutely
99. 3:40catastrophic for tens of thousands of
100. 3:42enron employees not just them it sent
101. 3:44their entire families into tail spins
102. 3:47but now 20 years later a lot of people
103. 3:49have turned it around
104. 3:52to do this to the employees who were so
105. 3:54loyal and dedicated
106. 3:56and this is what we get back for
107. 3:58repayment 20 years after what was at the
108. 4:00time the largest corporate bankruptcy in
109. 4:03u.s history enron's cautionary tale of
110. 4:06collapse is now well worn at some point
111. 4:10the
112. 4:10head
113. 4:11of this company knew
114. 4:13that it was cratering but before the
115. 4:16world crumbled for 20 000 houstonians
116. 4:19and their families oh were there good
117. 4:21times
118. 4:22to be a part of the enron juggernaut was
119. 4:25a badge of honor especially as a kid
120. 4:27straight out of rice you tend to pick
121. 4:30out the positives and that's what i
122. 4:31choose to do right i choose to look at
123. 4:32my enron experiences very positive in
124. 4:35terms of the personal and professional
125. 4:37experiences that i have dung tran who
126. 4:39wore a lot of hats with enron over seven
127. 4:42years landed on his feet he now owns a
128. 4:45retail energy service provider based in
129. 4:47houston but not everybody fared as well
130. 4:50when i saw the stock drop
131. 4:52i called to sell
132. 4:55and was told that i was locked out when
133. 4:57you look at the top dogs and i covered
134. 4:59the trial do you look at those guys now
135. 5:01and say they were criminals the most
136. 5:03people i've spoken to that worked at
137. 5:04enron would say this which is there's
138. 5:07prescriptively what actually occurred
139. 5:09but then there's also the first-handed
140. 5:11experiences we might have had with each
141. 5:13one of those executives ken lay enron's
142. 5:15founder was convicted of multiple fraud
143. 5:18charges but then died in july 2006
144. 5:21before sentencing
145. 5:23jeff skilling the former ceo served the
146. 5:25most time more than a decade in prison
147. 5:27and then a halfway house before being
148. 5:29released in 2020 and andy fastow enron's
149. 5:33former cfo got out of prison in 2011.
150. 5:37corporate finance laws in our country
151. 5:40changed because of enron enron's
152. 5:42bankruptcy was a watershed moment in u.s
153. 5:46corporate history and all of it happened
154. 5:49right here i can only look at things
155. 5:51from the standpoint of my personal
156. 5:53situation as well as the situation of
157. 5:55those that i stay in touch with and so
158. 5:57for us we've chosen to remember the good
159. 5:59times
160. 6:02if you were working for enron when it
161. 6:03collapsed that was no doubt a pivotal
162. 6:05moment in your life and so every year
163. 6:08including tonight a lot of former enron
164. 6:10employees get together they find it
165. 6:12therapeutic yeah i know a lot for a lot
166. 6:14of people even though it's been 20 years
167. 6:15the pain's never really gone away chris
168. 6:18christine all right robert joel thank
169. 6:20you