$500,000 deal for Enron heroine

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The Independent Online

Sherron Watkins, the Enron whistle-blower, is to sign a $500,000 (£350,000) book deal to give the inside story on the energy giant's collapse.

Last week Ms Watkins, who was a senior financier with the group, stood before the US Congress saying she thought that former Enron chairman Kenneth Lay was duped by his lieutenants, Jeff Skilling and Andrew Fastow.

This week she is expected to sign a deal with Doubleday/ Broadway, the business books publisher owned by Bertelsmann, to work with Texas Monthly writer Mimi Swartz on an insider's account.

The advance for the book is believed to be $500,000. While Doubleday/Broadway would not confirm that figure, a spokesman said it had signed Ms Swartz. "She may or may not collaborate with Sherron Watkins. That has been put on hold while she testified before Congress, but we should be at liberty to say something about it this week."

Ms Watkins, 42, a former vice president of finance at Enron, reporting to Mr Fastow, shot to fame after she admitted she sent a memo to Mr Lay last August warning him of the imminent disaster facing the energy giant. In it she pointed out that Enron was mired in joint ventures which kept much of the group's debt off its balance sheet.

When the full extent of the complex transactions emerged a couple of months later, Enron went into meltdown, becoming the world's largest bankruptcy. The repercussions have harmed Andersen, its auditor, the Bush administration, and Lord Wakeham, the former Conservative minister who was a director of Enron. There have also been rumblings in Whitehall. Ms Watkins' immediate boss, Cliff Baxter, committed suicide last month.

Last week Ms Watkins appeared before the Congressional committee investi- gating the scandal. That was after Mr Lay pleaded the fifth amendment to avoid giving evidence, and Mr Skilling testified but said he was innocent.

Ms Watkins told the committee she had found problems in Enron's books last summer, in particular spotting an off-balance sheet partnership called Raptor which owed $700m.

She warned Mr Lay in a memo, then met him. "It is my humble opinion he did not understand the gravity of the situation we were in," she told Congress. "Not only had the Titanic been hit, but we were already tilting."

Ms Watkins has become a near-celebrity in Houston, Texas, Enron's home town. Her book will be among the most keenly anticipated about the scandal, but it is far from the most lucrative deal in the scramble to tell the whole Enron story.

That has been struck by Bethany McLean, the glamorous Forbes writer who has regularly appeared on TV talking about Enron, and her colleague Peter Elkins. They are being paid $1.4m by Penguin Putnam, a subsidiary of Pearson, for a book on the scandal. Two other accounts are also in the pipeline, one from a team at The Wall Street Journal, the other from Kurt Eichenwald, The New York Times investigative journalist.

In addition to signing Ms Watkins, Doubleday/Broadway believes it has a coup with Our People: How Arthur Andersen won big business but lost its way, written by Barbara Ley Toffler, the former partner in charge of business ethics at Enron's auditor. Professor Toffler, of Colombia Business School, promises to reveal how the accounting firm became embroiled not only in the Enron scandal but also at Sunbeam, Waste Management and Global Crossing.

The collapse of Enron has proved to be a lucrative industry for some. On Friday, PricewaterhouseCoopers, the administrator of the European arm of Enron, revealed that it was paying traders at Enron in London some £24m in bonuses to keep trading. The move helped recover more than £100m in the markets.

Before, PricewaterhouseCoopers had paid a further £6.2m in commission to Enron executives who helped to sell the group's trading arm to UBS Warburg.

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