Whistleblower?

Time magazine's "Person of The Year" has a checkered history. Hitler was named in 1938. Stalin won twice, Khomeini once. These choices are perhaps defensible, in that these men had the biggest impact on world events -- Time's criterion -- in "their" year. But by what criteria did Time pick Sherron Watkins? A former vice president at Enron, she was selected as part of a trio of "whistleblowers," along with Coleen Rowley, an FBI staff attorney, and Cynthia Cooper, an accountant at WorldCom. But Ms. Watkins was no whistleblower and she had no impact. In fact, she looks like Time's worst choice ever.

What Time calls "the black comedy of corporate fraud" had many authors. Managers, board members, stock analysts, bankers, lawyers and accountants all played a part. But whistleblowers? They were most conspicuous by their absence. Take Enron. As it burned, analysts and auditors fiddled. To be sure there were accountants inside Arthur Andersen who questioned Enron's books. But they stayed inside -- as did Ms. Watkins. Time notes that she "wrote a letter to chairman Kenneth Lay in the summer of 2001 warning him that the company's methods of accounting were improper." But she remained in the shadows until 2002. That's when her "warnings" were unveiled, not by her, but by congressional investigators.

A whistleblower is someone who spots a criminal inside a bank and alerts the police. That's not Sherron Watkins. What she did was write a memo to the bank robber (Mr. Lay) suggesting he was about to be caught and warning him to watch out. In response, he met with her, told her he didn't think he was robbing the bank, but assuring her he'd launch an investigation. Mr. Lay put his law firm, Vinson & Elkins, on the case. The lawyers didn't talk to Mr. Lay or to Jeffrey Skilling, the departed CEO. On Oct. 15, 2001, Vinson & Elkins issued a report concluding that the facts didn't warrant an investigation. A day later, Enron restated its financials, the first step in the chain of events that led to bankruptcy. Through it all, Ms. Watkins said zip. Many others did nothing as well, but none of them are "Person of the Year."

After her warnings became famous, Ms. Watkins was hailed as a "whistleblower" by the press and members of Congress, hungry for a hero in a story littered with villains. But when called to testify she provided cover for Mr. Lay, who she said was duped. And she heaped blame on Arthur Andersen, Vinson & Elkins, and Mr. Skilling, whose resignation in August 2001 was more of a warning than any ever uttered by her.

"Has Enron become a risky place to work?" Ms. Watkins asked Mr. Lay. From this foreboding, many assume she was fired. She wasn't. She stayed on the job until last month, when she quit to become a consultant on corporate governance. Oddly enough, in her new job she joins the Person of the Year for 2001. Rudolph Giuliani is a consultant, too.

Mr. Ackman writes for Forbes.com.