My Turn: The Knowles/Ulmer administration: Alaska's Enron

Posted: Sunday, February 24, 2002

As I watched the congressional investigations that followed the sudden collapse of Enron, I was particularly struck by the role of corporate VP Sherron Watkins. Ms. Watkins testified she had gone to Enron President Kenneth Lay to share her concerns regarding dubious business practices widely known within the corporation. Ms. Watkins viewed her decision to bring predictions to top management not as "whistle-blowing" but rather as doing something a good manager should do. She was not the only one who over the years had approached and been rebuffed by top management at Enron. Here in Alaska, I know of a number of people in state government who have had similar experiences during the Knowles/Ulmer Administration.

By bringing CEO Lay into the picture, Ms. Watkins' insights revealed the slippery-sloped path on which this wealthy corporate giant corporation journeyed before it was slain by its own duplicity. Ms. Watkins made specific predictions, including informing Lay, "I am incredibly nervous that we will implode in a wave of accounting scandals" and knew that by doing so, she was putting her job in jeopardy.

How many corporate heads realize the value of an open-door policy? Or that willingness of the acting leadership to engage in dialogue with subordinates might offer a useful means to relay the bad news that "everybody knows" and therefore, might help head off impending calamity? But of course, by being roped into the loop of knowing, top officials would also be accountable and therefore lose the shield of ignorance that some top Enron officials have already tried to plea.

In the case of Enron, when it became known that Watkins had discourse with Lay, attempts were made to have her job terminated. Here was a business culture where everybody knew what the problem was, but no one was allowed to tell. I submit that some of us have known similar things about employment practices of the state of Alaska for a long time.

Some of my own now well-documented personal experiences as an engineer employed by DOT somewhat parallel that of Sherron Watkins. I was a union steward who worked with an ASEA union business agent to conduct a member survey that confirmed some of the general work environment concerns at DOT. The agent attempted dialog with the "good ol' boy" DOT commissioner regarding systemic cultural problems - and made extraordinary efforts to engage him. The results were not so different than those Ms. Watkins experienced. In my case, and by association, my employment was terminated not only out of fear I might not keep silent, but also perhaps in response to having management's comfort envelope stretched when challenged to recognize the bizarre workplace issues known to many. Everybody knew and still knows the nature of problems at DOT, but like Enron, no officials were willing to take steps to address it internally.

Today, not only is distrust felt at Enron, but we in Alaska have no reason to trust the leadership at DOT, DHSS, or at the overriding personnel division of the Department of Administration that maintains a cozy relationship with the state unions to keep workers groveling. This administration has long been able to maintain its code of silence; for if it were known that this administration knows of and condones its faulty personnel practices, things would have to change. And those changes would require working with the employees from the bottom of the structure to the top, without interference of misguided union warlord business managers who claim a foremost loyalty of protecting department reputations instead of encouraging the actual work of productive changes to the status quo. Enron, too, was enabled by cozy alliances that allowed "business as usual" to proceed unchecked.

We Alaskans are only fooling ourselves if we don't face the truth. The truth is that Alaska, with all of its wealth, is facing an "accountability implosion" in state government if we don't change our ways. And the ASEA union, in its misguided goal of wanting to be buddies rather than rock the boat, only adds to the muddle while directly harming its own members!

Facing the truth and reversing the faulty norms of state government mean exercising leadership. The quickest fix of the moment has been to kill the canaries, fire the messengers and hope to God current managers make it out of here - healthy pension in hand - to pass the problem on to the next administration.

Appearances can be deceiving. The Knowles/Ulmer administration is counting on that.

Nancy Rongstad lives in Juneau and has worked at ADOT.

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