"The reason people love Enron is because there was really no defining organizational structure," says Watkins. "If you wanted to start something and go for it, you could. In other companies you could get bogged down behind a boss." One month she was in Panama sizing up a copper mine, the next she was in Hong Kong trying to finance a nickel deal. Sure, Enron was a pressure cooker—employees were evaluated every six months in its now legendary "rank and yank" system—but Watkins thrived on the competition. She also satisfied the taste for frippery that she had acquired in Manhattan. While she steered clear of Houston's snooty charity-ball circuit, she bought a green Lexus suv and a house in tony Southampton for her and her new husband Rick, a vice president with Canadian Superior Energy.

By spring 2001, the technology bubble was bursting, and Enron was slipping along with it. In late June, Watkins went to work directly for Fastow, who charged her with finding some assets to sell off. But everywhere she looked she found the same thing: fuzzy off-the-books arrangements that seemed to be backed by nothing more than now deflated Enron stock. No one she asked could—or cared to—explain what was really going on. Knowing that others had got into trouble after challenging Skilling, who by then was CEO of the entire company, Watkins began scouting for a new job and went on a round of interviews at Reliant Energy. Her plan was to sign a new job contract and confront Skilling on her last day at Enron.

But on Aug. 14, Skilling abruptly quit, and Lay invited employees to put any concerns in a comment box. The next morning Watkins sat at her computer and tapped out her first anonymous one-page memo in a single two-hour flourish. "I am incredibly nervous that we will implode in a wave of accounting scandals," she wrote. But the next day, when Lay held a company-wide meeting and didn't allude to her concerns, she arranged a face-to-face appointment for Aug. 22. In the intervening days, she shared her worries with a friend at Andersen and drafted a longer, seven-page memo to hand to Lay. It was even more cataclysmic than the first. She had also annotated a document on one of the suspect partnerships, writing in bright blue letters in the margin: "There it is! This is the smoking gun. You cannot do this!"

Meanwhile, Watkins was getting jumpier. She was waking up at 2 a.m. rehearsing what she would say to Lay. Though she received the Lay family Christmas card each year, the two had barely ever spoken. At one point, she faxed her mother a copy of the memo. Harrington winced at "two sarcastic parts" that sounded somewhat self-serving. The offending passages—"My 8 years of Enron work history will be worth nothing on my resume"; "For those of us who didn't get rich these last few years, can we afford to stay?"—were promptly excised from the final version.

For all the dial-up, the meeting proved relatively uneventful. Lay seemed composed but genuinely concerned and said he would have attorneys look into the questionable deals. Though Watkins counseled against it, Lay suggested—and eventually selected—Enron's law firm, Vinson & Elkins, to conduct the inquiry. Nevertheless, Watkins left feeling buoyed. "I felt, 'Oh, good, now he knows,'" she says. "There was a feeling that I had done the hardest thing in my life, but I had carried the torch and dropped it off." For the first time that week, she slept through the night. In late September, even after netting $1.5 million by exercising personal stock options, Lay told Enron employees that "our financial liquidity has never been stronger." By mid-October, the company announced a $618 million third-quarter loss and a $1.2 billion write-off, tied to the murky partnerships that had worried Watkins. On Dec. 2, Enron filed for Chapter 11.

When her name was leaked in early January, Watkins initially felt a rush. "People were high-fiving. They were pumped and said, 'Attagirl,'" she recalls. She signed autographs in Starbucks; her husband Rick jokingly referred to himself as "Mr. Sherron Watkins." Their daughter Marion, 2, ran around the living room squealing, "Mommy's on the news again." One morning a maintenance crew arrived to move her back up to an executive office.

The high was short-lived. Some laid-off Enron employees began blaming Watkins for not taking her concerns to the Securities and Exchange Commission. Others fumed that in late August and October 2001, after writing her memos, Watkins unloaded $47,000 in Enron stock—moves she says were motivated by advice from her accountant and 9/11 jitters, respectively. By far the most intense criticism has centered on Watkins' decision to sell her story in book and movie deals and on the lecture circuit.

But her message is not one of strict self-promotion. In her speeches, she champions the rights of the individual investor and calls for a reformed corporate-governance structure. She hopes her book will "cleanse the resumes of the good people at Enron." And the fact is, she has to make a living. She has always paid most of the bills, and in September, Rick quit his job to spend more time with the family. Now she brings home the only paycheck. And financial worries have led the couple to postpone their plans for having a second child. "Personally," she sighs, "that has been the biggest repercussion."

As deflated as she can sometimes sound, Watkins does not for a moment regret her actions. A few weeks ago, when she was unpacking the boxes she had taken from her Enron office, she happened upon a green sticky-note pad that the firm once handed out to employees. It contains a quote from Martin Luther King Jr.: "Our lives begin to end the day we become silent about things that matter." She smacked her palm against her forehead. "You look at it and you think, 'Oh, my God, look how many people at Enron stayed silent," she says, "That's what they wrote. And nobody listened.'"

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