- The Washington Times - Saturday, January 19, 2002

Noble: Sherron S. Watkins, for attempting to terminate an excruciatingly expensive paper chase.
Mrs. Watkins didn't need the unexpected resignation of her boss, Jeffrey Killing, to tell her that Enron's paper tower was tottering. As a vice president of corporate development, she had read enough accounting statement footnotes to realize that her company had gone seriously in the red on a huge number of financial transactions.
However, unlike the paper-shredder auditors at Arthur Andersen & Co. (who apparently accepted several flayed applications from former employees of the Rose Law firm), or her papier-mache associates, she put her concerns on paper. Specifically, she wrote an Aug. 15 memo to her new CEO, Ken Lay, about her concerns with the company's balance sheets. True, she didn't sign the memo, but she didn't conceal much else.
She opened by asking, "Has Enron become a risky place to work?" and answered by asserting that it appeared the company was "hiding losses" and in danger of imploding "in a wave of accounting scandals." Mrs. Watkins even gave the names of personnel who Mr. Lay could count on to describe the incriminating paper trail (somewhat shorter now, thanks to the above-mentioned auditors).
Mrs. Watkins' blunt accounting was characteristic of her. While she was so tough and so abrasive that many took her for a New Yorker (she was a Texan), Mrs. Watkins believed in following business ethics, even when it meant delivering bad news to a boss. According to one former Enron exec, "I have never heard anyone question her judgment, her integrity and her veracity. I never heard anybody say she cut corners."

Knaves: The IRS, for deciding to send several thousand taxpayers on an excruciatingly expensive paper chase.
Two-thousand taxpayers will be the subjects of "audits from hell" this year, and 30,000 others will receive standard audits. It's not that they have done anything wrong or even appear to have.
Rather, these taxpayers will be randomly selected as a part of a program that the IRS has reinstated, or so it claims, to develop better guidelines on who should be audited. This is a bit like airline security agents searching old ladies learn how to spot terrorists. Besides, it isn't as though the agency needs practice. It audited about 618,000 taxpayers in 2000. And it is not that the practice helped auditors much. Last year, those taxpayers who called in with tax questions (and who held on through the average four-minute hold time) received incorrect answers about 25 percent of the time.
The IRS doesn't need more practice harassing taxpayers; it needs more accountability.


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