This is the Texas Monthly article on Enron.

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From: 	Winckowski, Michele
Sent:	Thursday, October 25, 2001 10:16 AM
Subject:	FW: Article on Enron

	You may have already read this but thought I'd forward on just in case.  MW

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From: 	Vignaroli, Donald
Sent:	Thursday, October 25, 2001 9:15 AM
To:	Bowers, Janet; Brennan, Lorna; Darveaux, Mary; Fritch, Bret; Graham, Charlie; Joyce, Jane; Kirk, Steve; Sebesta, Chris; Swett, Larry; Thurber, Bob; Winckowski, Michele
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How Enron Blew It
Less than a year ago, the Houston-based energy behemoth had everything: money, power, glitz, smarts, new ideas, and a CEO who wanted to make it the most important company in the world. Now its stock is down, wall street is bearish, and the CEO is gone. What went wrong?
by Mimi Swartz </mag/issues/authors/mimiswartz.php>
THE ENRON SKYSCRAPER NEAR THE SOUTH END OF HOUSTON'S DOWNTOWN feels like the international headquarters of the best and the brightest. The lobby in no way resembles the hushed, understated entryways of the old-fashioned oil companies, like Shell and Texaco nearby. Enron, in contrast, throbs with modernity. The people hustling in and out of the elevators are black, white, brown; Asian, Middle Eastern, European, African, as well as American-born. They are young, mostly under 35, and dressed in the aggressively casual uniform of the tech industry-the guys wear khakis, polo shirts, and Banana Republic button-downs. Almost preposterously fit, they move through the building intently, like winners. Enron is nothing if not energetic: A Big Brother-size TV screen frantically reports on the stock market near a bank of elevators, while another hefty black television relaying the same news greets people entering from the garage. A sculpture of the corporate symbol, an E tipped at a jaunty angle, radiates colors as it spins frenetically on its axis; a Starbucks concession on the ground floor keeps everyone properly caffeinated. Multicolored, inspirational flags hang from the ceiling, congratulating Enron on its diversity and its values; one more giant banner between elevator banks declares Enron's simple if grandiose goal: "From the World's Leading Energy Company to . . . The World's Leading Company!"
For a while, that future seemed guaranteed, as Enron transformed itself from a stodgy, troubled pipeline company in 1985 to a trading colossus in 2000. It was a Wall Street darling, with a stock price that increased 1,700 percent in that sixteen-year period, with revenues that increased from $40 billion to $100 billion. "The very mention of the company in energy circles throughout the world creates reactions ranging from paralyzing fear to envy," notes a 2001 report from Global Change Associates, a firm that provides market intelligence to the energy business.
This Enron was largely the creation of Jeff Skilling, a visionary determined to transform American business. Hired sixteen years ago as a consultant by then-CEO Ken Lay, Skilling helped build a company that disdained the old formula of finding energy in the ground, hauling it in pipelines, and then selling it to refineries and other customers. Instead, it evolved into a company that could trade and market energy in all its forms, from natural gas to electricity, from wind to water. If you had a risky drilling venture, Enron would fund it for a piece of the action. If you wanted your megacorporation's energy needs analyzed and streamlined, Enron could do the job. If you were a Third World country with a pitiful infrastructure and burgeoning power needs, Enron was there to build and build. Basically, if an idea was new and potentially-and fantastically-lucrative, Enron wanted the first crack. And with each success, Enron became ever more certain of its destiny. The company would be the bridge between the old economy and the high-tech world, and in February of this year, Skilling reaped his reward when he succeeded Lay as chief executive officer. Enron, says Skilling, "was a great marriage of the risk-taking mentality of the oil patch with the risk-taking mentality of the financial markets."
The Enron story reflects the culture that drove American business at the end of the twentieth century. Like the high-tech companies it emulated, Enron was going to reinvent the American business model and, in turn, the American economy. Maybe it was natural that this Brave New World also produced a culture that was based on absolutes: not just the old versus the new, but the best versus the mediocre, the risk takers versus the complacent-those who could see the future versus those who could not. The key was investing in the right kind of intellectual capital. With the best and the brightest, a company couldn't possibly go wrong.
Or could it? Today Enron's stock trades at around $35, down from a high of $80 in January. The press cast Enron as the archvillain of California's energy crisis last spring, and Skilling caught a blueberry pie in the face for his relentless defense of the free market. A long-troubled power plant project in India threatened the company's global ambitions. Telecommunications, in which Enron was heavily invested, imploded. Wall Street analysts who once touted the company questioned its accounting practices. Some of the change in Enron's fortunes can be attributed to the economic downturn in uncertain times that has afflicted all of American business. But the culture that the company created and lived by cannot escape blame.
ENRON, JEFF SKILLING SAYS, HAD "a totally different way of thinking about business-we got it." At Enron, in fact, you either "got it" or you were gone-it was as simple as black and white. It is not coincidental, then, that the color scheme of Skilling's River Oaks mansion mirrors the corporation he once headed. Here, the living room's white walls shimmer against the mahogany floors. Black leather trims the edge of snowy carpets. Billowy sofas set off the jet-black baby grand. In the entry, white orchids cascade from a black vase on a black pedestal table that in turn pools onto cold, white marble. There is only one off-color note: After almost twenty years, Jeff Skilling is no longer associated with Enron, having resigned abruptly after just six months as CEO. Once, Skilling was hailed as the next Jack Welch (General Electric's masterful CEO), as one of Worth magazine's best CEO's in America (anointed in 2001), and even as a daredevil who hosted the kind of unchained adventure junkets in which, a friend told BusinessWeek, "someone could actually get killed." Today, he sounds more like Ebenezer Scrooge on Christmas morning. "I had no idea what I'd let go of," Skilling says of all the personal sacrifices he made while retooling Enron.
From a black chair in the white library, across from a huge black and white photograph of his daughter and two sons, Skilling clarifies. The demands of working 24-7 for Enron caused him to ignore his personal finances. Divorced, he lived in a 2,200-square-foot house without a microwave or a dishwasher. He almost missed his brother's wedding. "Learning a foreign language-I never learned a foreign language!" he exclaims. He never once took his youngest son to school. "I'm interested in the kids. You don't do kids in fifteen-minute scheduling." Travel: "You can't go to Africa for a week and get anything out of it!" Skilling includes the study of architecture and design on his list of missed opportunities, then he stops and sighs. "I'm not sure that fulfillment in life is compatible with a CEO's job," he says, finally. Then his eyes lock on mine, and his voice, which had softened, regains its pragmatic edge. "It would have been easy to stay," he says. "But that would not have been good for me."
He's a smallish, ruddy-faced man who keeps himself at fighting weight, handsome in the way of corporate titans, with piercing cheekbones and that assiduously stolid gaze. But the impatience Skilling once reserved for cautious underlings and dull-witted utility company executives is now targeted at reporters who have labeled his resignation "bizarre" and associates who are bitterly skeptical of his need for family time. His shrug stretches the limits of his shimmering blue button-down, and his matching blue eyes look put upon. "I'm surprised," he says, "that people have so much trouble understanding this."
PEOPLE WHO PASSED THROUGH DOWNTOWN HOUSTON in the late eighties or early nineties couldn't help but notice a funny and, for its time, novel scene unfolding throughout the workday at the base of the Enron Building. From nine to five and before and after, you could see people slipping out of the pristine silver skyscraper to smoke. They perched on the chrome banisters or lurked near the glass doors at the entry, puffing like mad. They always looked hurried and furtive, even ashamed. Whatever people knew about Enron in those days (and most people didn't know much), it was often associated with that scene: Enron boasted one of the first nonsmoking corporate headquarters in Houston, and there couldn't have been clearer evidence of its break with the energy world of the past. What macho engineer would have put up with such humiliation?
But this company was a child of another time, that period in the mid-eighties when chaos enveloped the gas business. Federal deregulation of natural gas turned a steady, secure industry, in which gas pipeline companies frequently enjoyed a monopoly in portions of the areas that they served, into a volatile free-for-all. The situation was compounded five years later by federal deregulation of the pipeline business. So it happened that a gentlemanly gas pipeline company, Houston Natural Gas (HNG) found itself under attack from Coastal Corporation, Oscar Wyatt's less than gentlemanly firm. HNG was then run by Lay, a sturdy, taciturn former economics professor and Transco chief operating officer who had a passion for military strategy. (His doctoral thesis at the University of Houston was on supply and demand in the Vietnam War.) Lay, who was from Missouri and never succumbed-at least outwardly-to Texas brashness, had done well enough: Thanks to canny expansions, HNG's pipelines stretched from Florida to California and throughout the state of Texas.
HNG fended off Coastal, but to protect the company from other takeover attempts, Lay nimbly engineered the sale of HNG in 1985 to a friendly Nebraska pipeline concern called InterNorth, one of the largest pipeline companies in the country at the time. Then, a funny thing happened: HNG started acting in a way that would characterize the company for years to come-a lot like Coastal. What the Nebraskans blithely labeled "the purchase" was being called "the merger" back in Houston, and before long, following some particularly brutal politicking between Omaha and Houston, the company's center of gravity started shifting toward Texas, and shortly after that, Ken Lay was running a new company called Enron. "Over time it became clear that Lay had a better vision of the future," says one person associated with Enron at that time. "He never fought change. He embraced change."
Lay had won, but what exactly did that mean? Enron was saddled with massive debt from the takeover attempt, and thanks to deregulation, no longer had exclusive use of its pipelines. Without new ideas-for that matter, a whole new business plan-the company could be finished before it really even got started.
LIKE MANY PEOPLE WHO TEAMED UP WITH ENRON IN THE EIGHTIES, Jeff Skilling had spent a lot of time in the Midwest, and he was self-made-at fourteen he had been the chief production director at a start-up TV station in Aurora, Illinois. (His mother would drop him off there every day after school.) "I liked being successful when I was working, and I was smart," he told BusinessWeek earlier this year. But unlike many of his Enron colleagues, Skilling wasn't deliberate and soft-spoken and happy to go home at five o'clock; he was anxious and excitable, and nothing, but nothing excited him more than what he would come to call "intellectual capital." He loved being smart, and he loved being surrounded by smart people. He graduated from Southern Methodist University, went into banking-assets and liability management-and took on Harvard Business School, where he graduated in the top 5 percent of his class. Then Skilling took the next step on what was then the new, souped-up path to American success: He joined Manhattan's McKinsey and Company as a business consultant, and that is where Ken Lay found him in 1985.
It is often said of Lay that his instincts for hiring the best are flawless, and his choice of Skilling probably saved the company. Skilling was above all an expert at markets and how they worked. While everyone else was worrying about the gluts and the shortages that defined the gas industry, he alone saw the parallels between gas and other businesses. And so in a world where credit was nearly impossible to come by, Skilling came up with what he called the Gas Bank, which contractually guaranteed both the supply and the price of gas to a network of suppliers and consumers. Enron would not be a broker but a banker. It would buy and sell the gas itself and assume the risk involved. And Enron would make money on transactions, much like an investment bank would.
Skilling worked up some numbers and found them "absolutely compelling." Then the McKinsey consultant took the idea to a meeting of about 25 Enron executives. He had a one-page presentation. "Almost to a person," Skilling says, "they thought it was stupid." Almost. After Skilling left the meeting dejected, he walked Ken Lay to an elevator and apologized. Lay listened and then said, "Let's go."
The Gas Bank was not an overnight success. For months Skilling woke up in a cold sweat, sure he had ruined not only his career but the careers of dozens of colleagues who had assisted him. In fact, he had come upon one of those divides that seem to define his life: "I believed this whole world would be different, a huge breakthrough" is the way Skilling puts it today, and even if he is typically immodest, he was right. Fairly soon after launching, the company sold $800 million worth of gas in a week. True to Skilling's character, success turned out to be a matter of old versus new: He says the joke around Enron was that if a company's CEO was under fifty, "We were in." And he was in too: In 1990 Skilling finally left McKinsey and joined Enron as the head of Enron Finance Corporation, a new division created just for him. In 1991 that company closed a deal that earned $11 million in profit. After that, says Skilling, "we never looked back."
Skilling and Lay also realized that the Gas Bank couldn't work unless it had a trading component. Myriad trades were needed to build the market that would make the project go. But by buying and selling enormous quantities of gas, Enron not only constructed a market but almost instantly came to dominate it. The company had the best contacts, the best intelligence, and the best access to supplies. That, in turn, attracted more customers who wanted to be part of the play. With so many customers in its pocket, Enron could better predict the direction of the market and could use that knowledge to make trades for its own benefit-Enron could in effect bet on which way the price of gas would go, as one might do with pork bellies or soybeans, but with startling accuracy, thereby generating profits higher than anyone could have ever imagined.
THIS CHANGE COULD NEVER HAVE OCCURRED without another change Skilling had made: He created, within Enron, a new culture to match its new trading business. The idea was to build a "knowledge-based business," which demanded a skill set not exactly prized by Enron's employees from the old HNG days. Most were deliberate, cautious, responsible, somewhat defensive people, most of them men, of course-the kind of people you'd expect to find working in an industry regulated by the federal government. But now the company needed bolder people for its bold new era: that included anyone who wanted to make money-lots of money-for themselves and for the company. "Enron was going to create a niche for itself or die," one former executive explains. "The people who had narrow views eventually were forced out, because if they had narrow views about other things, they had narrow views about the market."
Skilling wanted smart people but not just any smart people. He wanted the smartest people from schools like Harvard, Stanford, and maybe, Rice. And because his firm was now acting more like a bank than a pipeline company, he wanted to draw from the pool of recruits that would be attracted to the biggest and best investment banks, like Merrill Lynch or Credit Suisse First Boston. In addition to being smart, Enron people were also supposed to be "aggressive." You were right for Enron if you didn't want to wait until you were thirty to close your own deals or move up in an organization.
You could see what he was looking for on "Super Saturdays" at the Houston headquarters: eight fifty-minute interviews with ten minute breaks in between-the company might herd as many as four hundred people through in just one day. They were scored from 1 to 5 on their smarts, their problem-solving ability, their passion for hard work, and what at Enron was called "a sense of urgency." People who scored less than 2.5 were scratched. The shrewdest candidates knew how to work Enron before they were even hired: These were the types that automatically turned down the company's first offer, knowing Enron would come back with more. The starting salary was around $80,000. Maybe it wasn't a fortune-yet-but the signing bonus, about $20,000, was more than enough for a lease on the obligatory Porsche Boxster or one of the lofts being renovated close to downtown. (Enron people didn't live in far-flung suburbs. Suburbs were uncool and too far from the office.)
For the lucky winners, Enron offered the corporate equivalent of a gifted-and-talented program. New associates learned the latest techniques for structuring energy deals, and there were rotations at Enron offices around the globe. The hours were long, but every possible need was taken care of. A company concierge handled all the things important people couldn't be bothered with: picking up dry cleaning or prescriptions, shining shoes, cleaning the house, planning a vacation. Of course, a lot of people who worked for Enron never got to take vacations-they were too busy making money-but they could use the company gym and the company's personal trainers. If they were overweight or wanted to quit smoking, they could join Enron's Wellness Program. Massages were offered six days a week, from seven in the morning until ten at night. "They were so cutting edge," rhapsodizes someone involved with the company health care program at the time. "They really thought about the psychology and what it took to keep these people going."
Skilling handed out titles analogous to those at Wall Street firms-analysts, associates, directors, and managing directors-but everyone knew that those titles didn't really matter. Money did. Instead of competitive salaries and decent bonuses, Enron offered competitive salaries and merit-based bonuses-with no cap. "If you really worked hard and delivered results, you could make a lot of money," says Ken Rice, who stayed with Enron for 21 years until resigning recently as the head of the company's faltering broadband division. Or, as the saying goes, you got to eat what you killed. Gas traders with two or three years of experience could wind up with a $1 million bonus. And the more you produced, the closer you got to Jeff: Real hot dogs joined him glacier hiking in Patagonia, Land Cruiser racing in Australia, or off-road motorcycling in a re-creation of the Baja 1,000 race, ending at a spectacular Mexican villa. "Every time he'd speak, I'd believe everything he'd say," one loyalist says.
And why not? By 1995 Enron had become North America's largest natural-gas merchant, controlling 20 percent of the market. But at a company where the buzzword was "aggressive," that was no place to stop: Skilling and Lay believed the Gas Bank model could easily be applied to the electricity business. Firmly committed to the notion that a deregulated market meant better service at lower prices for consumers (and untold profits for Enron), they began barnstorming the country, pressing their case with entrenched power company presidents (who, with their multimillion-dollar salaries and monopoly service areas, had little incentive to change) and energy regulators (who were somewhat more receptive, thanks in part to Enron's generous lobbying efforts).
But the biggest winner of all was probably Jeff Skilling. In 1997 Ken Lay made him the president and chief operating officer of the company. By then, the division known as Enron Capital and Trade Resources was the nations largest wholesale buyer and seller of natural gas and electricity. The division had grown from two hundred to two thousand employees, and revenues from $2 billion to $7 billion. "Mr. Skilling's experience so far with the turmoil in the industry has convinced him that he is on the right track," the New York Times noted. Everyone would certainly have thought so: Enron and Skilling had totally transformed one industry and were well on their way to transforming another.
"FIRING UP AN IDEA MACHINE; Enron Is Encouraging the Entrepreneurs Within," sang the New York Times in 1999. "In the staid world of regulated utilities and energy companies, Enron Corp is that gate-crashing Elvis," crowed Fortune in 2000. Wall Street was demanding tech-size growth on a tech timetable, and Enron, in 2000, obliged with second quarter earnings of $289 million, up 30 percent from the previous year. That year the company seemed to discover a market a minute: Under Skilling, Enron was trading coal, paper, steel, and even weather. No one blinked when a London wine bar became an Enron client. People drank more in warm weather than cold, so why not buy a hedge against the usual winter downturn?
But most exciting to the financial world was Enron's entry into high-tech communications. Because of the company's marketing dominance, EnronOnline became another overnight success, handling $335 billion in commodity trades online in 2000. Enron, as usual, made its money on the spread between the bid price and the asking price. Then there was the broadband business: To Enron, trading excess capacity in large, high-speed fiber-optic networks (empty lanes on the fabled information highway) wasn't that different from trading the capacity of natural gas pipelines. So Enron created a market for what the industry calls bandwidth. Soon after, it also announced a twenty-year deal with Blockbuster to deliver movies on demand electronically to people in their homes. Enron looked like a company that couldn't lose. "Its strategy of building businesses, shedding hard assets, and trading various commodities can help it do well even in an uncertain market," BusinessWeek insisted.
There was, however, another reason Enron did so well in such a short time: the company's hard-nosed approach toward its customers. The old notion of customer service was based on the long haul-you had to nurse and coddle customers to keep them. But Enron had new markets and new ideas-customers had to come to it. Over time, the company stopping referring to its business clients as customers and began calling them "counterparties."
Skilling wanted the biggest profits on the shortest timetable: Gains were maximized by creating, owning, and then abandoning a market before it became overtaxed and overregulated. So if you wanted to launch a high-risk venture quickly-such as Zilkha Energy's new high-tech approach to drilling for oil-you got your financing from Enron because a bank would take forever to underwrite the project, if it ever would. But because Enron invented its markets and subsequently dominated them, Enron could set the terms of its deals, from the timeline to the method of accounting to whether the deal happened at all.
While many businesses used what was known in the industry as "mark-to-market accounting," for instance, Enron used it on an unprecedented scale. The company priced their deals at current market value-but it was always Enron's idea of the market value; companies that balked at their pricing didn't get deals. And while old-fashioned companies spread their profits out like annuities over a period of years, Enron took most of its profit up-front. However many millions would be made on a deal that covered several years, they went on the books in the current year. If a few analysts thought there might be something fishy about what they called "subjective accounting," investors didn't particularly care as long as the profits rolled in. As the market fluctuated and the landscape changed, the company might abandon a project that had been in the works for months because its profit margins weren't going to be high enough. "Enron is known for leaving people at the altar," says one former employee. Winning the highest possible profits for the company could even extend to Enron's attitude toward charity. When a fundraiser for the Houston READ Commission, a literacy group, called on Enron for a contribution, it was suggested that he start raising money for Enron's competing literacy charity: "Even the person who was supposed to give money away for Enron was supposed to make money for Enron," he says.
As Enron became more and more successful, the culture Skilling had created took on a dark side: The competition turned inward. As one member of the Enron family put it, "It became a company full of mercenaries." The change started at the bottom. As Enron's domination of the energy market grew, most of the recruiting frills fell away. New associates were treated much like the commodities the company traded. Global Change's Enron spies reported overhearing orders like "I need a smart person-go buy me one" or "Buy me an intelligent slave, quick." Enron had never been the kind of place where people sang to you on your birthday, but now the workaholism bordered on self-parody: A Random Acts of Kindness program lasted only a few months. It was too disruptive. People couldn't get their work done.
And, of course, Enron had a program for institutionalizing creative tension. The Performance Review Committee, which had initially been installed by Skilling in the Capital group, became known as the harshest forced ranking system in the country. Employees were rated on a scale of one to five, and those with fives were usually gone within six months. (The PRC's nickname quickly became "rank and yank.") It was a point of pride that Skilling's division replaced 15 percent of its workforce every year. As one Skilling associate put it, "Jeff viewed this like turning over the inventory in a grocery store." Skilling's approach to business-get in and get out-had become Enron's attitude toward its workers. In time, it would become many workers' attitude toward the company. Teamwork, never that valuable in a trading culture, went the way of the eyeshade and the abacus. If protocol required an Enron higher-up to come from Europe to help with a project in the Third World, he might help-or he might not, depending on whether another, potentially more lucrative project was pending elsewhere.
Everyone felt the pressure to perform on a massive scale at massive speed: "They were so goal oriented toward immediate gratification that they lost sight of the future," says one former employee. Anyone who couldn't close deals within a quarter was punished with bad PRC scores, as were the higher-ups who had backed them. Past errors and old grudges were dredged up so often as new ammunition in PRC meetings that the phrase "No old tapes" became an Enron clich?. "People went from being geniuses to idiots overnight," says one former Enron executive.
In such a hothouse, paranoia flowered. New contracts contained highly restrictive confidentiality agreements about anything pertaining to the company. E-mail was monitored. A former executive routinely carried two laptops, one for the company and one for himself. People may have been rich at Enron, but they weren't necessarily happy. One recruiter described the culture this way: "They roll you over and slit your throat and watch your eyes while you bleed to death."
BEFORE JEFF SKILLING COULD TRANSFORM ENRON from the world's leading energy company into the world's leading company, he had to make one more change: Just as he had done ten years before, Skilling had to purge the company of its remaining old order. Where Enron once prized cautious executives who dealt with tangible assets like pipelines, it now valued bold executives who dealt with intangible assets. Pipelines, power plants-they may have been Enron's pride, but Skilling wanted them gone. Expensive, long-term building projects had no place when Wall Street was devoted to quick profits and enormous returns on investment capital, and Skilling knew it. "It wasn't the time for long-term approaches," an Enron executive says of Wall Street's mood. "It was the technology era."
To rid Enron of the last vestiges of its past, Skilling had to take on Rebecca Mark, long considered his rival for the CEO's job. Mark was for many years the poster child for the Enron way: Young, attractive, aggressive-her nickname was Mark the Shark-she came from sturdy Midwestern stock but had the requisite Harvard MBA. Mark was largely responsible for the success of Enron International, the asset-heavy side of the company where she developed $20 billion worth of gas and power plants, which accounted for 40 percent of Enron's profits in 1998. For this she reaped breathtaking compensation-one Enron executive estimated $10 million-and adoring press clips, including two appearances on Fortune's list of the fifty most powerful women in corporate America.
But then Mark ran into trouble with a gas-fired power plant in Dabhol, India, one of the largest ever constructed. She had played the game the Enron way: Taking Enron into a new market, she had finagled low import taxes (20 percent instead of the usual 53) and hung in through 24 lawsuits and three changes in government. But the time and expense needed to make India and other Enron plants around the globe successful did not mesh with Enron's goals, and Skilling's impatience with Mark grew.
Forcing Mark out, however, was no easy matter. Key executives left, divisions were dismantled, but she remained. The truth was Enron didn't mind firing lower-level employees, but it hated to fire the kind of aggressive, relentless people it tended to promote. The company preferred humiliation-keeping a director in his cubicle, say, but failing to include him in the glamour deals, or kicking someone upstairs with a fancy title. (One particularly difficult executive won a few years at graduate school, gratis.) A company as smart as Enron could probably deduce too that dispatching one of the most visible businesswomen in the country would provoke a public-relations disaster. So Lay and Skilling did something classically Enronian: They gave Mark her own company. Despite Skilling's contempt for asset-heavy businesses, Enron spent more than $2 billion to buy a run-of-the-mill British water utility that could serve as Enron's entry into the emerging world of water privatization. Mark was put in charge of making Enron, yes, the world's greatest water company. Azurix, as the new business was called, looked like another sure thing: Its IPO in 1999 raised $695 million.
But Mark had to succeed on Enron's increasingly abbreviated timetable in a business fraught with political and emotional complexities. Water is not like gas or electricity-owners and governments are a lot less willing to give it up, even for lots of money. The company stumbled, layoffs commenced, and confidence evaporated. By August 2000 the stock price, which had started out at $19, had fallen to $5. Mark's resignation followed, and Azurix, much diminished, was folded into Enron. "I think it's best for Rebecca to start afresh," Lay, who had been a mentor to Mark, told the Wall Street Journal. Or as one critic put it, "They were more interested in destroying the old culture than running a business."
As 2000 drew to a close, Skilling was in total command. In December Ken Lay announced the inevitable: "The best time for the succession to occur is when the company is doing well," he told the press. "Enron is doing extremely well now." In February 2001 Jeff Skilling took over the CEO's job.
ALMOST IMMEDIATELY THE TROUBLE STARTED. Enron's domination of the electric-power market made it an instant target in the California deregulation debacle. Both PBS's Frontline and the New York Times took on Enron, portraying the company as a heartless colossus that used its influence in Washington (Lay and Enron's political action committee are the top contributors to George W. Bush) to force old people on fixed incomes to choose between buying food or electricity. Skilling and Lay appeared on camera singing belligerent anthems to the free market, while another memorable scene juxtaposed one of the company's jackallike traders against a hapless state employee in California, as both tried to buy power online. The Times reported that Lay had tried to persuade a new federal commissioner to change his views on energy deregulation. The bad press was, to say the least, ironic: Just as the media was pounding Enron for its omnipotence, Wall Street was discovering its weaknesses. By late March the stock price had slid to $50 a share from $80 in January.
Within Enron, the asset-based divisions took the rap for the decline. (The India plant continued to be enormously costly, at least in part because of constant turnover within Enron's management team.) But the California situation was more visible and therefore more damaging, despite Enron's claim that the state had never built enough power plants to service its population and never properly managed those it had. "For three months Gray Davis did a very good job of blaming us," says Mark Palmer, a vice president for corporate communications. "We were a Texas company. There was a Texan in the White House. California was a state that didn't put him in office, and his biggest contributor was a Texas energy company. Performance is going to take care of our stock price. The truth will take care of Gray Davis." (California utilities still owe Enron $500 million, another reason stockholders might be panicky.) But more problematic than the crisis itself was Skilling's all too apparent lack of contrition. Facing down his critics, he cracked a joke comparing California with the Titanic. ("At least the Titanic went down with its lights on.")
But the biggest problem was Enron's telecommunications division, which had been responsible for at least one third of its heady stock price. Investors believed that Enron could revolutionize high-speed communications, just as it had revolutionized gas and power. Enron estimated the global market for buying and selling space over fiber-optic cable would grow from $155 billion in 2001 to $383 billion by 2004-but then the tech bubble burst. So too did the much-hyped movies-on-demand deal with Blockbuster. For the first time in its confoundingly successful life, Enron had nothing new to take to market. Like the popular high school girl who suddenly packs on a few pounds, Enron suddenly looked less alluring to Wall Street.
Skilling launched a campaign to keep Enron's most important cheerleaders, the stock analysts, in the tent, but he wasn't cut out to be a supplicant. During the reporting of first quarter profits, he called an analyst who challenged Enron's financial reporting an "asshole." When the company reported hefty second quarter profits, many analysts questioned whether those profits had come from the generation of new business or from the sale of old assets. Ignoring the growing chorus critical of Enron's accounting, Skilling promised, as he always had, that innovations were just around the corner. "There wasn't any positive news," Carol Coale, of Prudential Financial, says now. "Basically, he talked me out of a downgrade."
The business press, so generous in the past, turned surly. Fortune had asked in March whether Enron was overpriced. ("Start with a pretty straightforward question: How exactly does Enron make its money?") The routine cashing in of stock options that were about to expire by key executives was portrayed in the media as a fire sale. (Skilling had sold $33 million worth, Ken Lay and Ken Rice close to four times that amount.) Then the Wall Street Journal reported on a fund run by the CFO that had been a source of strife within the company. (It was essentially risk management against Enron's possible failures.) Every negative story seemed to produce a concurrent drop in the stock price: By late August it had fallen below $40. Enron, so institutionally unforgiving, finally got a taste of its own medicine. "When Wall Street is in love with a stock, they're forgiving of something like accounting," says Carol Coale. "When a company falls out of favor, all these issues carry more weight."
This fact was not lost on people inside the company, who suddenly started experiencing an attack of conscience. Those who had looked the other way as the most powerful Enron executives dumped their wives and married their secretaries or carried on flagrant interoffice affairs now saw the error of their ways. "It just created an attitude," one executive still at Enron says. "If senior people are doing that, why are we held to a higher standard? There was a real culture of 'We're above everyone else.'"
Loyalty had never been prized at Enron, so there was no reason to expect it now. An old-fashioned, slow-moving company like Exxon could demand hardship duty in Baku with the promise of greater rewards down the road. "But," as one Houston oilman explains, "if you have to negotiate a hardship duty with someone who doesn't have loyalty and has money, then you have a corporation that's better suited for good times than bad."
As it turned out, that description applied to Jeff Skilling too. As the stock price stubbornly refused to ascend, he made no secret of his unhappiness and frustration. Then, after a trip to visit the families of three employees killed at a plant in England, he had an epiphany: Life was short; for him, Enron was over. Ever stoic, Ken Lay returned to the CEO's office, named a new president, arranged a trip to New York to calm analysts and investors, and promised a kinder, gentler Enron in the future. Trading anything and everything was out. The company, Lay says, will still innovate but "innovate much closer to our core." As for the culture: "Things like the Performance Review Committee, I think we could have applied better. By trying to categorize people into so many different categories, you ended up creating a morale problem."
That Skilling's supposedly brilliant colleagues were as shocked at the news of his departure as the rest of the business community may be testament to their lack of emotional intelligence. Despite Skilling's lengthy tenure with Enron, he'd always been contemptuous of the long haul; he'd always believed in cutting losses and moving on. But now that he was abandoning them when the company was in trouble, it was different. "Even Jeff's biggest detractors wouldn't have wanted him to walk out the door," one loyalist admits.
But on the day we meet, Skilling is looking forward, not back. "Look," he says with finality, "ninety percent of my net worth is in Enron. Were my interests aligned with the shareholders? Absolutely."
Free of falling stock prices and shareholder pressures, he is nestling himself back into the world of ideas. His eyes flash as he talks about new technologies. "The first wave never gets it right," he says. "The stand-alone dot-coms didn't work, but the technological applications will create a second wave that will change the world." Houston, he promises, will become the world's center of commodity trading, and he intends to be a part of it. In fact, he is already shopping for office space.
"This is the second wave, and Enron's got it," he says, almost breathless. "There are thousands of people running around the streets of Houston that get it."


Hey,

Just wanted to make sure you're still up for the MFA reception tomorrow night.  I told Lisa about it last night and she said she'd like to go as well.  So...the reception is supposed to start at 7:00 and go until 9:00 and I figured we could either go to an early dinner, or cut out of the reception a little bit early and go to dinner afterward (say around 8:00 - 8:30).  Of course, dinner doesn't have to factor in at all if we don't want it to...just a suggestion.  I'll give you call later tonight to hammer out the details.

See ya,
Susan


I have to go to the management meeting in San Antonio on the afternoon of the 14th.  Would it be possible to meet in Denver on the morning of the 14th?

 -----Original Message-----
From: 	Walton, Steve
Sent:	Monday, October 22, 2001 10:24 AM
To:	Whitt, Mark; Kaufman, Paul; Calger, Christopher F.
Cc:	Tycholiz, Barry; Bump, Dan J.
Subject:	RE: Buffalo Power Company LLC - Gas Turbine Power Plant Project

Mark,

	I am committed to a meeting in Seattle with the Western Governors and the FERC on November 1 and 2 respectively.  The next meeting of the Wyoming Energy Commission is on November 12-13 in Evanston and a meeting in Spokane on the 15th, leaving the 14th open.  I know that is beyond your two week window, but it would be the best time for me.

Steve

 -----Original Message-----
From: 	Whitt, Mark
Sent:	Friday, October 19, 2001 3:51 PM
To:	Walton, Steve; Kaufman, Paul; Calger, Christopher F.
Cc:	Tycholiz, Barry; Bump, Dan J.
Subject:	Buffalo Power Company LLC - Gas Turbine Power Plant Project

ENA and Crestone (Northern Border's non-regulated affiliate) met with a group of developers and Joe Meyer, Secretary of State in Wyoming, who have proposed to build a 200 MW power plant (expandable to 500 MW) in the Powder River basin of Wyoming.  Their "angle" is that the existing utility, Powder River Electric Coop, cannot meet the demand for electricity and the necessary distribution infrastructure to maintain the pace of development in the Coal Bed Methane BOOM that is happening in the basin.

As you may or may not know, Enron has been very involved in this Coal Bed Methane play since 1998.  ENA is the largest purchaser of 3rd party gas in the basin and Crestone is the largest non-producer gathering company in the basin.  Crestone has a gathering trunkline located near their proposed site.  The developers will be filing a petition to remove this area from the COOP's certificated territory in the next couple of weeks.

There are obviously regulatory issues revolving around their ability to gain access to this "retail" market and the project would not be economically feasible as a merchant plant in the wholesale market.  However, they seem to have some political backing.

These developers recognize that they need Enron's assistance in developing this project on three main fronts:

1.  Power Marketing and Project development
2.  Gas Supplies and Pipeline access
3.  Regulatory and Transmission expertise

Given the fact that Joe Meyer is the early favorite to be the next Wyoming Governor and we are trying to work well with the State of Wyoming, and we have a natural competitive advantage in this market from a gas supply and pipeline perspective, I would like to pursue this opportunity a little further.

Therefore, I am wondering if I could get a Sr. Commercial Power Representative and a Regulatory Representative (Steve Walton would be good since he will be on the Wyoming Energy Commission), to attend a meeting in Denver with myself and the Crestone representatives sometime in the next 2 weeks.

Please give me a call and I can elaborate on the opportunity or answer your questions.  I don't want to make this email a novel!

Thanks a lot.

303-575-6473


FYI. Looks like Brown might not be getting the presidency right away....

Best,
Jeff

****************************************************
PUC Chief's Iron Resolve Evident in Edison Deal
Politics: Insisting on her agency's independence, Loretta Lynch repeatedly stood up to the governor who appointed her.
SACRAMENTO -- Once again last week, California Public Utilities Commission President Loretta Lynch gave Gov. Gray Davis help that he badly needed--but left him upstaged.

With the governor unable to broker a deal to save Southern California Edison from bankruptcy, Lynch and commission lawyers secretly negotiated a $3.3-billion settlement that was ratified by a federal judge in Los Angeles on Friday.

Although Davis appointed Lynch as PUC president, she and administration officials say she informed the administration of the talks only after they were well underway. "I will take responsibility," Lynch said.

Even as she took the lead in forging an Edison deal, Lynch defied the governor Tuesday. She led the PUC in rejecting a measure that Davis and Treasurer Phil Angelides deem necessary for repaying the state for billions of dollars in power purchases this year. Davis condemned the vote as "an irresponsible act."

Davis repeatedly has said he wants people he appoints to think and act as he would act. Lynch, however, is not easily controlled. She has moved ahead without the governor's approval several times. Most notably, last spring, she pushed the largest electricity rate increase in state history through the PUC while Davis was publicly opposed to a rate hike.

Such actions have made her perhaps Davis' least favorite appointee.

And yet, Lynch holds the key to resolving what now is Davis' single most pressing issue: how to reimburse the state for the billions spent on electricity since January.

For months, those power purchases have been eating a huge hole in the state treasury. Unless a way is found to close it, Davis may have to make deep cuts in public services next year just as he prepares to run for reelection. He has proposed reimbursing the treasury with a $12.5-billion bond issue that would be paid off by electricity consumers.

Davis would not discuss Lynch for this article. But his aides say there is so much tension between the two that the governor and Lynch talk only through intermediaries. A top aide, speaking on the condition of anonymity, described the governor's relationship with Lynch, who once served on Davis' staff, as "nonexistent."

But floating the bond deal requires action by the PUC, and Davis aides admit that figuring out a way to do that means dealing with Lynch, whose term does not expire until 2005 and whose influence is now stronger than ever, according to fellow commissioners and others familiar with the agency.

Davis could demote Lynch from PUC president to just commissioner, but "he can't remove commissioners," said the Davis aide who described the tension between the two. "We are in a position where we're going to have to negotiate."

A Yale-educated attorney who practiced in San Francisco before joining the administration, Lynch worked on Davis' 1998 campaign, helping him raise money. He rewarded her loyalty by making her head of the Office of Research and Planning, then placing her on the PUC in late 1999.

Lynch has taken seriously the idea, enshrined in the early 20th century laws that created the PUC, that the commission is supposed to be independent.

She recalls spending Christmas 1999 reading the Public Utilities Code, written 90 years ago, and concluding that Progressive Gov. Hiram Johnson envisioned "an independent agency, independent from the Legislature as well as from the governor, [that] would allow regulators in a highly technical field to do essentially the right thing."

"Before, I was on [Davis'] staff, and as staff, you are supposed to follow the lead absolutely of your boss," Lynch said. "Now, I was appointed to an independent constitutional body. While I feel I've built bridges to the governor and the Legislature, I take very seriously the PUC's constitutional independence."

Critics, including many in the Davis administration and some in the Legislature, call Lynch unbending. She is particularly adamant on the commission's independence.

Insisting on Independence

Accounts of how the Edison deal was reached underline Lynch's insistence on preserving the PUC's independent authority. The events also show how strong a position she holds as the PUC and the administration negotiate over the bond deal.

Starting in April, when he unveiled his proposed rescue of Edison, Davis and his aides lobbied hard to win support in the Legislature. Davis had no Republican support, and faced skepticism from fellow Democrats.

Lynch was another skeptic; Davis' proposal would have weakened the PUC's authority to regulate Edison. Her criticism of the proposal strengthened the hand of Senate Leader John Burton (D-San Francisco), an ally of Lynch's and the most influential critic of the governor's proposal.

Davis did win approval of a modified version of his plan in the Assembly. But late on Sept. 14, the Senate adjourned for the year without agreeing to any Edison bill.

The governor said he would order lawmakers to return to Sacramento in early October for a special session to consider it again.

Lynch seized an opportunity. She wanted to escape a $5.5-billion federal lawsuit that Edison had filed against the PUC. She also figured there might be a way to restructure Edison's debt without the bells and whistles proposed by Davis and other lawmakers.

It was a good time to talk. Wholesale electricity prices were down significantly, interest rates were falling, and the rate increase she had pushed through earlier in the year had made more money available to the utility.

"When we looked at the numbers fresh, we realized that the numbers had changed," enough that Edison might avoid bankruptcy without a complex legislative bailout, Lynch said.

At her direction, PUC General Counsel Gary Cohen made the initial call to Edison.

Edison, PUC Started Secret Talks

Edison executives had their doubts that the PUC could resolve the utility's problems. In their view, past inaction by the commission had helped bring the firm to the brink of bankruptcy.

But with prospects uncertain in the Legislature, both sides met Sept. 19 in the San Francisco offices of the utility's private counsel, Munger, Tolles & Olson. Talks went on for 12 days.

The PUC had three conditions. "One, we would try to see if we could assure them enough in rates to pay back down their debt over a certain period," Cohen said. "Second, there would have to be a sharing of pain by shareholders. And third, there could be no terms that would limit or restrict the commission's regulatory authority."

Lynch and the PUC staff kept negotiations secret. Word of the talks could stampede creditors into forcing the utility into bankruptcy, they feared. Another concern was that the talks could jeopardize a legislative solution to Edison's problem.

Lynch did notify her fellow commissioners, whose support she would need to pull off a settlement. PUC Commissioner Jeff Brown, one of three Davis appointees on the five-member board, said Lynch told him Sept. 21 "in the strictest confidence" about the negotiations with Edison.

"If it became public, it could blow up," Brown said. "There would be too much hullabaloo."

For several days, however, Lynch did not inform Davis. Meanwhile, the governor's aides continued to hold talks in hopes of putting together a legislative compromise.

On Sept. 25, some of Davis' top aides met with key legislative staffers in a daylong session. By the end of the meeting, both sides realized a major gulf remained.

That same day, Lynch called Sacramento to pass word to Davis that the talks were underway. A few lawmakers also were told. Two days later, the governor announced that he was postponing by a week his call for the Legislature to return for a special session. One reason for the delay was to see whether the PUC could seal a deal.

Over the next several days, the commission and utility lawyers hammered out the details of the $3.3-billion rescue plan, finalizing a deal about 11 p.m. Sept. 30.

"It would not have gotten over the finish line without her," said attorney Ron Olson, an Edison board member who helped represent the utility in the talks.

While those negotiations were going on, Davis was going to extraordinary lengths to persuade the PUC to approve the other major item on the commission's plate: his proposal for the bond deal.

The issue is complex. But at its root, Lynch said, the proposal pushed by Davis and Angelides to pay off the bonds would have the effect of locking in multiyear power contracts that the Davis administration struck with independent power producers.

Lynch and several lawmakers contend that the administration is committing the state to buy too much electricity at excessive prices and seeking to limit the PUC's authority.

The PUC under Lynch has challenged aspects of the administration's power contracts in proceedings before the Federal Energy Regulatory Commission.

Knowing that Lynch opposed the proposal, the governor tried to create a majority that would bypass her. He did not call Lynch, but did call Republican commissioners Richard Bilas and Henry Duque.

The governor's lobbying changed no votes; his proposal lost 4 to 1 with only Brown siding with him.

But his efforts appear to have enhanced Lynch's standing among her fellow commissioners, including the two Republicans, who are appointees of former Gov. Pete Wilson.

Commissioners Praise Lynch

In Bilas' view, the call from the governor showed that Lynch had the mettle to vote against the administration proposal, even if it might cost her her job as PUC president.

"There are only two kinds of people who can serve: a yes man, or a person who believes that the commission was set up to be independent, and she is of the second type," Bilas said.

Brown, the only commissioner to vote for the administration's bond proposal, credits Lynch as well.

"She stood up for the authority of the PUC," Brown said. Brown--a cousin of Davis' onetime boss, former Gov. Jerry Brown--is a potential successor to Lynch as president if Davis decides to demote her. He has not been offered the post and does not want it, Brown said.

"I hope they don't remove her as president," Brown said. "She is a feisty, independent individual, but she is capable of enormous good work. If you appoint her, you have to take her on days you agree with her and days you disagree with her. She is not going to be a sycophant, and that is to her credit."


Hi Vince

I didn't know when the Research Group was being disbanded, though it was
clearly going to happen soon.  (I seem to recall it was hard enough
justifying the Group's existence when times were good.)

I'm due to visit Houston to speak at an IQPC conference in April.  Perhaps
we can meet up?

All the best,
Steve

-----Original Message-----
From: Kaminski, Vince J [mailto:Vince.J.Kaminski@enron.com]
Sent: 18 January 2002 18:26
To: lepps2@bp.com
Cc: vkaminski@aol.com
Subject: Hello

Steve,

As you perhaps know, the Research Group has been disbanded
last Tuesday. My last day is Jan 31.

I shall go through the literature search during the weekend and
will send you a few hints.

Vince

**********************************************************************
This e-mail is the property of Enron Corp. and/or its relevant affiliate and
may contain confidential and privileged material for the sole use of the
intended recipient (s). Any review, use, distribution or disclosure by
others is strictly prohibited. If you are not the intended recipient (or
authorized to receive for the recipient), please contact the sender or reply
to Enron Corp. at enron.messaging.administration@enron.com and delete all
copies of the message. This e-mail (and any attachments hereto) are not
intended to be an offer (or an acceptance) and do not create or evidence a
binding and enforceable contract between Enron Corp. (or any of its
affiliates) and the intended recipient or any other party, and may not be
relied on by anyone as the basis of a contract by estoppel or otherwise.
Thank you.
**********************************************************************


Did you want this deal confirmed? If so, it needs a counterparty contact name
in it. Let me know.

Thanks,
Kate
---------------------- Forwarded by Kate Symes/PDX/ECT on 02/27/2001 11:45 AM
---------------------------

	From:  Sharen Cason                           02/27/2001 07:09 AM

To: Kate Symes/PDX/ECT@ECT
cc:

Subject: #531910

We need a contact for this deal in order to prepare the confirmation.

Thanks!


Linda & Sharon,

My primary job responsibility is to online trading, and right now EnronOnline
is quite a beast of a customer.  Because of that I please ask that you direct
any future questions you may have with respect to confirmations to our two
paralegals who handle the day to day trading, Susan Bailey at x34737 and
Stephanie Panus at x53249.

With respect to the two current Canadian confirmations, Sara Shackleton, an
attorney in our Group, is working with Credit to resolve the questions on the
Slater Steel and Casco credit worksheets.


Start Date: 1/9/02; HourAhead hour: 18;  No ancillary schedules awarded.  No variances detected.

    LOG MESSAGES:

PARSING FILE -->> O:\Portland\WestDesk\California Scheduling\ISO Final Schedules\2002010918.txt


Dear Gerald,

I received and reviewed your email, and I will check with my clients on your
proposal.  I expect that I will have an answer later this week.

I understand that my assistant has sent you the documents by email.   Let me
know if you did not receive them.

Feel free to give me a call to discuss.

Michelle Cash


---------------------- Forwarded by Phillip K Allen/HOU/ECT on 05/07/2001
11:22 AM ---------------------------

	From:  Jay Reitmeyer                           05/03/2001 11:03 AM

To: stanley.horton@enron.com, dmccarty@enron.com
cc:
Subject: California Summary

Attached is the final version of the California Summary report with maps,
graphs, and historical data.

To: Phillip K Allen/HOU/ECT@ECT
cc:
bcc:
Subject: Additional California Load Information

Additional charts attempting to explain increase in demand by hydro, load
growth, and temperature.  Many assumptions had to be made.  The data is not
as solid as numbers in first set of graphs.


Congratulations on the farm!!!!!    I will be in the Woodlands Thursday and
part of Friday at a Legal Conference.  I would invite you to golf, but I know
you are way busy.   Let me know if I can help with the move.

Debra Perlingiere
Enron North America Corp.
Legal Department
1400 Smith Street, EB 3885
Houston, Texas 77002
dperlin@enron.com
Phone 713-853-7658
Fax  713-646-3490

__________________

HAVE A GOOD DAY !!!!!!!

Debra Perlingiere
Enron North America Corp.
Legal Department
1400 Smith Street, EB 3885
Houston, Texas 77002
dperlin@enron.com
Phone 713-853-7658
Fax  713-646-3490


-----Original Message-----
From: 	"Doug & Killian Gilbert-Smith" <gilsmith@houston.rr.com>@ENRON
Sent:	Friday, January 11, 2002 12:26 PM
To:	Gilbert-smith, Doug
Subject:	RE: Welcome to Friends Reunited

-----Original Message-----
From: Gilbert-smith, Doug [mailto:Doug.Gilbert-Smith@enron.com]
Sent: Monday, January 07, 2002 9:43 AM
To: gilsmith@houston.rr.com
Subject: FW: Welcome to Friends Reunited

>  -----Original Message-----
> From: 	"Doug & Killian Gilbert-Smith" <gilsmith@houston.rr.com>@ENRON
> Sent:	Tuesday, December 11, 2001 12:26 PM
> To:	Gilbert-smith, Doug
> Subject:	FW: Welcome to Friends Reunited
>
>
>
> -----Original Message-----
> From: register@friendsreunited.co.uk
> [mailto:register@friendsreunited.co.uk]
> Sent: Tuesday, December 11, 2001 6:11 PM
> To: gilsmith@houston.rr.com
> Subject: Welcome to Friends Reunited
>
>
> Thank you for registering with FriendsReunited.co.uk
>
> Your email address is your registration id gilsmith@houston.rr.com and
your
> password is scotland666
>
> However, we need to validate your email address before allowing your
details
> to appear on the register.
>
> Please visit the site and enter the validation code VYCKF when prompted.
>
> Visit http://www.friendsreunited.co.uk to find out if any friends from
your
> school have registered.
>
>
>
> Thanks for your support.
>
>
>
> --------------------------------------------------------------------------
--
> If you did not register on FriendsReunited.co.uk please do not click on
the
> link. Your email details will be automatically deleted.
> Alternatively please forward a copy of this email to
> remove@friendsreunited.co.uk and we will make sure your details have been
> removed.
>
>
>

**********************************************************************
This e-mail is the property of Enron Corp. and/or its relevant affiliate and
may contain confidential and privileged material for the sole use of the
intended recipient (s). Any review, use, distribution or disclosure by
others is strictly prohibited. If you are not the intended recipient (or
authorized to receive for the recipient), please contact the sender or reply
to Enron Corp. at enron.messaging.administration@enron.com and delete all
copies of the message. This e-mail (and any attachments hereto) are not
intended to be an offer (or an acceptance) and do not create or evidence a
binding and enforceable contract between Enron Corp. (or any of its
affiliates) and the intended recipient or any other party, and may not be
relied on by anyone as the basis of a contract by estoppel or otherwise.
Thank you.
**********************************************************************

 - chew2.JPG


Dave:
I hope all is going well.  I left you an e-mail regarding coming over to work for you.  I decided to not except the UBS deal, so I wanted to come work for you and Janet.  Since I have already talked with these guys, I am pretty much available today going forward.  Again, you know what I have done and I think it would be a good fit.  Hope to hear from you soon.
Regards,
Ben


The information contained herein is based on sources that we believe to be
reliable, but we do not represent that it is accurate or complete.  Nothing
contained herein should be considered as an offer to sell or a solicitation
of an offer to buy any financial instruments discussed herein.  Any
opinions expressed herein are solely those of the author.  As such, they
may differ in material respects from those of, or expressed or published by
on behalf of Carr Futures or its officers, directors, employees or
affiliates.  ? 2001 Carr Futures

The charts are now available on the web by clicking on the hot link(s)
contained in this email. If for any reason you are unable to receive the
charts via the web, please contact me via email and I will email the charts
to you as attachments.

Crude     http://www.carrfut.com/research/Energy1/crude28.pdf
Natural Gas     http://www.carrfut.com/research/Energy1/ngas28.pdf
Distillate     http://www.carrfut.com/research/Energy1/hoil28.pdf
Unleaded     http://www.carrfut.com/research/Energy1/unlded28.pdf

Feb. WTI/Brent Spread
http://www.carrfut.com/research/Energy1/clg-qog.pdf
Feb Heat Crack     http://www.carrfut.com/research/Energy1/heatcrack.pdf
Feb Gas Crack     http://www.carrfut.com/research/Energy1/gascrack.pdf
Feb Gas/Heat Spread     http://www.carrfut.com/research/Energy1/hug-hog.pdf
June Gas/Heat Spread
http://www.carrfut.com/research/Energy1/HUM-HOM.pdf
March Gas/Heat Spread
http://www.carrfut.com/research/Energy1/HUH-HOH.pdf
Feb/May Unlead Spread
http://www.carrfut.com/research/Energy1/HUG-HUK.pdf
Feb/July Crude oil Spread
http://www.carrfut.com/research/Energy1/CLG-CLN.pdf

Nat Gas Strip Matrix
http://www.carrfut.com/research/Energy1/StripmatrixNG28.pdf
Nat Gas Spread Matrix
http://www.carrfut.com/research/Energy1/SpreadmatrixNG28.pdf

Crude and Products Spread Matrix
http://www.carrfut.com/research/Energy1/SpreadmatrixCL28.pdf


Thanks very much.

	Joseph Alamo
	05/15/2001 05:24 PM

		 To: Jeff Dasovich/NA/Enron
		 cc:
		 Subject: Re: Plan B

You got it.

From: Jeff Dasovich on 05/15/2001 05:24 PM CDT
Sent by: Jeff Dasovich
To: Joseph Alamo/NA/Enron@Enron
cc:

Subject: Plan B

----- Forwarded by Jeff Dasovich/NA/Enron on 05/15/2001 05:23 PM -----

	Kelli Clifton <kelli@ppallc.com>
	05/15/2001 03:01 PM

		 To: "'jeff.dasovich@enron.com'" <jeff.dasovich@enron.com>
		 cc:
		 Subject: Plan B

Per a request from Theo Pahos (on behalf of Mirant), can you please fax
him a copy of Plan B at (916) 441-3549.

Kelli Clifton
Public Policy Advocates
(916) 441-0702


Imad,

Just wanted to let you know that I passed your resume on to the desk
director.

Mat


Jeff, I didn't know about your new job when I saw you before the Azurix
Board meeting. Congratulations!
Hope you have a great time at it.

Happy holidays.

Ed


?

?
http://www.msnbc.com/news/INFECTIOUS_front.asp?bt=nm&btu=http://www.msnbc.com/
tools/newstools/d/news_menu.asp
 - MSNBC Flu Front Page 1009 AM ET Wednesday, December 06, 2000.url


Rick will hold a conference call today for all the field offices and for those on travel....it will take place as follows:

Date:		Monday, December 3

Time:		11:00 AM (CST)

Number:	1-888-942-9874 (domestic #)
		212-547-0466 (int'l)
		26003 (passcode)

While Rick is holding the conference call, Steve Kean will hold a floor meeting for the folks in Houston at 11:00 AM (CST), by Ginger's desk.

Thanks and please call if you have any questions.

Ginger Dernehl
Administrative Coordinator
Global Government Affairs
Phone# 713-853-7751
Fax# 713-646-8160


Hi there.  I've been out for 2 days.  I was driving home last night from the
airport down 59, and I passed all sorts of emergency vehicles because of an
explosing near.  Did you hear about it?


I want to underscore that moving just the banking stuff to a bill to pass
this year is VERY bad and something we should vehemently oppose.

	Chris Long@ENRON
	10/31/2000 08:05 AM

		 To: James D Steffes/NA/Enron@Enron, Mark Taylor/HOU/ECT@ECT
		 cc: Tom Briggs/NA/Enron@Enron
		 Subject: Re: CFTC Legislation

Jim - The CEA legislation has died and risen again so many times over the
last two weeks.  As of yesterday, Senator Gramm (the one obstacle to final
passage) told a group of banking lobbyist that he opposes the legislation in
full, but would consider moving the legal certainty provisions for banking
swaps.  This is not good for us and it is not good for the entire
legislation.  We are still trying to discern what exactly Gramm wants and
what he is up to.  We should know by later today the ultimate fate of the
bill.

I'll keep you in the loop.

	James D Steffes
	10/30/2000 09:41 AM

		 To: Chris Long/Corp/Enron@ENRON
		 cc:
		 Subject: CFTC Legislation

Chris --

Can you give me a quick update on where we stand with CFTC Reauthorization?

Jim


Check this out.

Jim
 -----Original Message-----
From: 	McVicker, Maureen
Sent:	Wednesday, November 21, 2001 10:05 AM
To:	Steffes, James D.; Shapiro, Richard; Dernehl, Ginger; Noske, Linda J.
Subject:	FW: In case we get separated...

 -----Original Message-----
From: 	Rigney, Brandon
Sent:	Tuesday, November 20, 2001 4:01 PM
To:	Rigney, Brandon
Subject:	In case we get separated...

Friends--

Whatever the coming days or weeks may bring, I wanted to make sure we could stay in touch.

Here's a web page with my contact information and a place for you to type in yours, if you wish: http://www.blr.net/friends/

Feel free to pass this email along to anyone you think appropriate.  Thanks!

Brandon


Here is the quick overview of the false claims act in California.  Keep in
mind that the California AG has offered a $50,000,000 bounty or more for
information leading to successful false claims act cases that show that
wholesale prices were too high.

Thanks
Gary

> -----Original Message-----
> From: Smith, Amanda D.
> Sent: Tuesday, April 10, 2001 12:45 PM
> To: Fergus, Gary S.
> Subject: False Claims Act
>
> Gary,
>
> This is a brief description of the relevant provisions of the California
> False Claims Act.  As we discussed, a more in-depth analysis will follow
> in memo form.
>
> -Amanda
>
>
>
> The California False Claims Act (CFCA), available at California Government
> Code Section 12650 et seq., provides that any person (natural person,
> corporation, firm, etc.) who commits various acts shall be liable to the
> state or political subdivision (city, county, etc) for treble damages
> sustained because of those acts.  That person may also be liable for a
> civil penalty of up to $10,000 for each false claim and for the costs of
> any civil action brought to recover any penalties or damages.
>
> Initially the CFCA defines "claim" as including "any request or demand for
> money, property, or services made to any employee, officer, or agent of
> the state or of any political subdivision, or to any contractor, grantee,
> or other recipient, whether under contract or not, if any portion of the
> money, property, or services requested or demanded issued from, or was
> provided by, the state ... or by any political subdivision thereof ...."
>
> The CFCA then describes those acts which subject a person to treble
> damages.  The covered acts potentially relevant to Enron are:
>
> * Knowingly presenting or causing to be presented to an officer or
> employee of the state or of any political subdivision thereof, a false
> claim for payment or approval. (Sec. 12651(a)(1))
> * Knowingly making, using, or causing to be made or used a false
> record or statement to get a false claim paid or approved by the state or
> by any political subdivision. (Sec. 12651(a)(2))
> * Conspiring to defraud the state or any political subdivision by
> getting a false claim allowed or paid by the state or by any political
> subdivision. (Sec. 12651(a)(3))
> * Having possession, custody, or control of public property or money
> used or to be used by the state or by any political subdivision and
> knowingly delivering or causing to be delivered less property than the
> amount for which the person receives a certificate or receipt.  (Sec.
> 12651(a)(4))
> * Knowingly making, using, or causing to be made or used a false
> record or statement to conceal, avoid, or decrease an obligation to pay or
> transmit money or property to the state or to any political subdivision.
> (Sec. 12651(a)(7))
> * Being a beneficiary of an inadvertent submission of a false claim to
> the state or a political subdivision who subsequently discovers the
> falsity of the claim, and fails to disclose the false claim to the state
> or the political subdivision within a reasonable time after discovery of
> the false claim.  (Sec. 12651(a)(8))
>
> Section 12652 of the CFCA provides, inter alia, that a person ("a qui tam
> plaintiff") may "bring a civil action for a violation of this article for
> the person and either for the State of California in the name of the
> state, if any state funds are involved, or for a political subdivision in
> the name of the political subdivision, if political subdivision funds are
> exclusively involved.... Once filed, the action may be dismissed only with
> the written consent of the court, taking into account the best interests
> of the parties involved and the public purposes behind this act."
> Section 12652 goes on to describe the procedures whereby the State or a
> Political Subdivision may intervene in a suit filed by a qui tam plaintiff
> and how the damages recovered in such a suit shall be divided.
>
> Several other provisions of Section 12652 could be extremely important:
>
> * When a qui tam plaintiff brings an action under this subdivision, no
> other person (qui tam plaintiff) may bring a related action based on the
> facts underlying the pending action. (Sec. 12652(c)(10))
> * A qui tam plaintiff may not bring an action that is based upon
> allegations or transactions that are the subject of a civil suit or an
> administrative civil money penalty proceeding in which the state or
> political subdivision is already a party.  (Sec. 12652 (d)(2))
> * A qui tam plaintiff may only be "an original source" with direct and
> independent knowledge of the information on which the allegations are
> based.  A qui tam plaintiff may not obtain information from the news media
> or from public disclosure of the information in governmental or regulatory
> hearings, investigations, reports, etc. and use it to bring suit under the
> CFCA. (Sec. 12652 (d)(3))
> * If the qui tam plaintiff is a state employee, that person must
> exhaust various internal procedures before filing suit under the CFCA
> (Sec. 12652 (d)(4))
> * If the state, a political subdivision, or the qui tam plaintiff
> proceeds with the action, the court may award to the defendant its
> reasonable attorney's fees and expenses against the party that proceeded
> with the action if the defendant prevails in the action and the court
> finds that the claim was clearly frivolous, clearly vexatious, or brought
> solely for purposes of harassment.   (Sec. 12652 (g)(9)
>
>
> Other relevant provisions of the CFCA include:
>
> * The CFCA defines "knowing" and "knowingly" to mean that a person,
> with respect to information  "(A) Has actual knowledge of the information.
> (B) Acts in deliberate ignorance of the truth or falsity of the
> information. [or] (C) Acts in reckless disregard of the truth or falsity
> of the information."  Importantly, proof of specific intent to defraud is
> not required.  (Sec. 12650(b)(2))
> * The CFCA has various damages limitations provisions for defendants
> who cooperate with the State's investigation
> * The CFCA has various "whistleblower" provisions protecting employees
> who disclose information about false claims.
> * In any action brought under Section 12652, the state, the political
> subdivision, or the qui tam plaintiff shall be required to prove all
> essential elements of the cause of action, including damages, by a
> preponderance of the evidence.  (Sec. 12654(c))
>
>

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Because we may want to go to the local court to get an injunction or TRO or
whatever they call it in Brazil to force Furnas to sign.  Tozzini tells us we
can do it in a couple of weeks, in the federal court, but Bob we know the
history on that in the other case.  I'm not in favor of it particularly, but
the Tozzini lawyers have presented it as an option for consideration.

Robert C Williams
02/02/2001 07:34 AM
To: Michelle Blaine/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc: jgardine@skadden.com, drosenbl@skadden.com, John Novak/SA/Enron@Enron,
Bruce Lundstrom/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Richard B Sanders@ECT

Subject: Re: Cuiaba Call--legal issues

I want to get involved in this.  Michelle will bring me up-to-date.  I don't
understand why we are considering Brazilian court versus ICC arbitration.

Michelle Blaine
02/01/2001 07:36 PM
To: jgardine@skadden.com, drosenbl@skadden.com
cc: John Novak/SA/Enron@Enron, Bruce
Lundstrom/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Richard B Sanders@ECT, Robert
C Williams/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT

Subject: Cuiaba Call--legal issues

1. Consent Issue:  Jose Bestard (he's the main developer who did this deal)
reported that he met with Furnas this week.  Furnas had not received  EPE's
letter addressing the consent issue.  Furnas continues to link its failure to
sign the consent to commercial exposure to the high price from the MAE. There
are initials on the original consent and no one (including Furnas) knows
whose they are. John Novak told me he's not sure of the significance, but it
is not uncommon in Brazil to initial documents. Nevertheless, we need to ask
our Brazilian lawyers whether there is any significance under Brazilian law.
Keep in mind also that consent document was between EPE and the assignor,
Electronorte.

2.  Arbitration considerations:  Bestard has a meeting planned with the
ambassador.  He  consulted Enron's financial/business consultant in Brazil,
Winston Fernino (sp?) who advised that we should exhaust all political
avenues before resorting to litigation or arbitration.   What concerns me,
however, is  his advice that, politically, it is not the time to seek
assistance fromthe president for the consent, that there is a political
battle in the senate, and that we should wait until the end of February to
seek political assistance.  My view on that is, to wait 4 more weeks to
progress with this notice of default, when the 90 day cure period has
expired, plus the 30 day extension which has also expired, sends the wrong
message and weakens our position. Thus, it is my recommendation that we
proceed immediately with a notice to terminate under Clause 27, paragraph 2
of the PPA, which then requires a 30day consultation period (paragraph3) at
the end of which we have the option to terminate.  This buys us a little
time, but keeps the pressure on, at the end of which we can initiate
proceedings to compel the consent or to terminate.  I'm not sure what
reaction the notice to terminate could bring about from Furnas. I'm not sure
how that plays out in our settlement with Siemans. Consider also that the
commercial people are not comfortable with termination yet.  I am not sure
what rights, if any, we waive by waiting around doing nothing or how that may
affect our position in arbitration or litigation (something we need to look
at under the contract, although I cannot immediately recall any deadlines or
express waivers related to timing in this regard).  I committed that we would
advise the team on the next call (next Thursday) our recommendation with
respect to  arbitration/litigation.   I want to make sure they understand
every possibility so they can make an informed decision. You have the matrix
developed already if you want to expand on that, or handle that your own
way.  Bestard opines that Furnas will fight hard, that they have
traditionally been very adversarial and uncooperative. I'll find out who
represents them.

3. Force Majeure:   Furnas is also taking a very strong position that EPE
does not have a valid force majeure claim.  Based on my reading of the
contract, our facts appear to fit squarely under Clause 95(c).   However, I'm
told we did not comply strictly to the notice terms. We'll need to show that
we were not negligent as a cause for the attorney general's action.  Laine
Powell, President of the Cuiaba companies will gather the information on our
force majeure claim and we need to consider the legal issues related to our
position.    Note that if FM lasts more than 12 consecutive months, both
parties have the right to terminate.  No one buys the plant and we're stuck.
I'll find out the date of our last FM notice.  There have been several.

4.  Budget:  Lets consider what it will cost to nail down this arbitration
concern and give initial advice on how to proceed over the next week,  what
it will cost to prepare for arbitration and, the cost of the arbitration.
Darren I'll call you tomorrow and we can break that out.  We may want to
consider the litigation route. We'll need to put together some kind of
proposed or potential time line, and what will happen in each stage and tie a
number to it.  I've done this with Pete before and he seems to like it.  It
needs to be subject to review as we go along.

5.NEXT: Prep for the call and get a recommended strategy in place. I'm going
to get together all our opinions on the Brazilian state of arbitration and
get a conference call with one of these experts so we can get the best
advice.  We certainly have some conflicting views.  Our experience in the
Brazilian courts is that nothing happens and we could be stuck for years, so
I am inclined to take our chances with arbitration and we may get stuck in
the court anyway.  If we go to court, perhaps Furnas would take the position
that we must arbitrate, that is what Fernando Serec said.  Who knows.
Please give me your comments or just call me.  I'm open to any suggestions.
John Novak will be able to tell us about all the competing concerns that I
may be unaware of with any strategic plan.
Regards,
Michelle


Amita is now free

 -----Original Message-----
From: 	Richter, Brad
Sent:	Friday, October 05, 2001 9:12 AM
To:	Kitchen, Louise
Subject:	RE: Replacement for Savita

You're teasing me.  Do tell...

 -----Original Message-----
From: 	Kitchen, Louise
Sent:	Friday, October 05, 2001 9:07 AM
To:	Richter, Brad
Subject:	Replacement for Savita

I think I have your replacement for Savita.


---------------------- Forwarded by Chris Dorland/HOU/ECT on 12/12/2000 03:27
PM ---------------------------

Joe Quenet@ENRON
12/12/2000 12:21 PM
To: CHRIS.DORLAND@ENRON.COM
cc:
Subject: A friend wanted you to see this!

---------------------- Forwarded by Joe Quenet/NA/Enron on 12/12/2000 01:24
PM ---------------------------

rebecca.quenet@eds.com on 12/12/2000 12:17:40 PM
To: joe.quenet@enron.com
cc:

Subject: A friend wanted you to see this!

Rebecca wanted you to see the story
http://abcnews.go.com/sections/business/DailyNews/power_market001212.html
from ABCNEWS.com.


hey freak.  next summer's activities is indeed the subject of most of my
daydreaming time as of late....and some hiking will definitely occur.  as a
good mate's  wedding takes place on july 8 in LA, a whole big hunk of
something is not altogether likely - but sections of the PCT have come to
mind, as has the colorado trail, which is some 400 miles or so, i think.
about the latter i have just written a card to roger davidson to sound him
out about it, but by all means next summer is an open book.

i wonder how long of a section that is and why you thought about it in
particular - are y'all planning on the july 4 thing in nevada?

if you reckon you can take a decent amount of time off, well i will move
heaven and earth to accommodate both of our schedules.  for the rolina it
shall be a summer of love ( or no work, at any rate)

so do not yank my chain on this, por favor - like our Pops i support an
obnoxiously serious uberplanning habit.  give it a thought and let us know
what is up.

on another matter, was reading the economist a couple of weeks ago and just
about had a stroke when i came across the name of Enron in an article about
prospective tie-ups and buyouts amongst utilities and energy companies.
Good Lord, i did not know it was that big of a company.

thoroughly enjoyed a letter from the julie not so long ago and would
appreciate it if you told her it will be answered one of these random days.

danna and mom, mom and danna.  what exactly was the gist of their
conversation about the pedernales, to the best of your knowledge?  i will
have to speak with our misguided sister about that, but i will tell you now
i do not trust our mother in regard to the pedernales whatsoever.  there are
times i really do not understand how her mind works - and i suppose i do not
want to.

well i gots to git.  hope all is well with you and yourn and may this
missive find all y'all in good health and spirits, lording over all you
survey -

cheers

the Ralai Lama

>From: "Richard B Sanders" <rsander@ect.enron.com>
>To: "ROLLAND SANDERS" <bwanarol@hotmail.com>
>Date: Tue, 8 Jun 1999 17:55:11 -0500
>
>
>
>What about hiking the Pacific trail from Lake Tahoe to Yosemite in June/
>July of
>2000.
>
>

_______________________________________________________________
Get Free Email and Do More On The Web. Visit http://www.msn.com


Glad to hear you guys are surviving Taylor's treks.  Perhaps some sort of reverse proximity alarm should be invented...you know, one that
would go off when she strays more than 10 feet from one of you.  The patent might pay for a few dive trips!

No news is good news on the Enron front.  Transwestern still not in bankruptcy, is making money, business as usual for Kim.  Our
remaining "strategic investment" in several thousand shares of the big E remains speculative, but at this point, who cares?

How do you guys look for dinner Saturday night?  We could bring something over to grill at your place (our community grill is still out of
commission from the flood, and is not high on the replacement list), or we could meet somewhere, whatever is best for you parent-types.

See you soon...

John

> John- for some reason my last couple of emails to you have been returned.
> Life over here is hectic what with Taylor rambling all over the house.  Our
> thoughts have been with Kim and you as the headlines have unfolded. I'm sure
> the undaunting Watson spirit is keeping the two of you going!  We are in
> town next weekend. Perhaps we could get together at some point for lunch or
> even a quick beer on our patio or the Ginger Man.   Let us know and we can
> begin planning.
>
> If you are in the mood, I would be ammenable to opening a dive shop in
> Cozumel.
>
> Thanks.
>
> awm
> ----- Original Message -----
> From: "John Watson" <jwatson@nwdiagnostic.com>
> To: "John Watson" <jwatson@nwdiagnostic.com>
> Sent: Friday, January 25, 2002 1:01 PM
> Subject: February Gulf Coast MGMA meeting L - S
>
>
> > ==========================================
> > You are receiving this message because you are on
> > the distribution list for meeting announcements for
> > Gulf Coast MGMA.  To be removed from this list,
> > simply reply to this message with those instructions.
> > ==========================================
> >
> > The February meeting of the Gulf Coast Medical Group Management
> Association
> > (GCMGMA) will be held on Wednesday, February 6, from 5:30 - 7:30 p.m. in
> the
> > cafeteria area of Kelsey-Seybold Clinic, 2727 West Holcombe (77025).  Greg
> > Barnes of Korn/Ferry International, an executive search firm, will speak
> on
> > career strategies in the post-PPM world.
> >
> > To RSVP to this meeting, click on the link below or copy and paste it into
> > your browser window:
> >
> > http://www.gulfcoastmgma.org/RSVP_yes.htm
> >
> > For those who wish to download the most recent copy of GCMGMA Update, you
> > can do so by clicking here:
> >
> > http://www.gulfcoastmgma.org/GCMGMA_Updates/200201update.pdf
> >
> > Those of you who attended the January 9th meeting can download the
> American
> > College of Medical Practice Executives (ACMPE) credit hour form by
> clicking
> > here or pasting the link into your browser:
> >
> > http://www.gulfcoastmgma.org/Adobe_files/200201ACMPE.pdf
> >
> > We look forward to seeing you there!
> >
> > ==========================================
> > You are receiving this message because you are on
> > the distribution list for meeting announcements for
> > Gulf Coast MGMA.  To be removed from this list,
> > simply reply to this message with those instructions.
> > ==========================================
> >
>
>


Janelle:
Here's an email and slightly modified PP presentation that I'd like to send to Marcie.  Let me know what you think.

Best,
Jeff

*********************************************************************************************************************************

Hi Marcie:

	Congratulations again on your new role at Anaheim.  Elena tells me that you're having a great time.

	Thanks for taking the time to talk a little bit about the strategic alliances Enron is forming with public power.	We're excited about our alliance model because it offers a true win-win for municipal power companies and their customers.  I've attached a power point presentation that provides an overview of the program.

	In sum, the initiative offers public power systems leading edge competitive retail energy and risk management products and services for their commercial and industrial electric customers, using their own brand name.  Since EES retains and manages all price and product related risks, our alliance partners are freed up to offer their customers valuable and sought after products and services with no additional risk.

Here are some of the program's highlights:

Enabling our alliance partners to provide their customers with products and services that are superior to what competitive suppliers are offering, reaffirming the value of public power and a strong customer focus.

Our alliance partners maintain exclusive control over customer relationships and continue to market power under their own name.

Our market-tested and accepted products and services allow your customers to better manage costs, reduce operational and financial risks and focus on their core business activities

Our alliance partners do not take on any price risk related to these products.

Products and services customization further enable our alliance partners to spur economic development and maintain customer retention.

Innovative financial solutions that allow companies to upgrade industrial facilities and energy infrastructure, including energy consuming equipment and demand-side management programs, without diverting capital from their core businesses.

	Thanks again for taking the time to talk yesterday.  If you have any questions, give me a call at 415.782.7822, and I'll call you in the next few days about arranging a time that we can meet with you in beautiful Southern California.

All the best,
Jeff


---------------------- Forwarded by Mark - ECT Legal Taylor/HOU/ECT on
12/23/98 10:19 AM ---------------------------
To: Fred Lagrasta/HOU/ECT@ECT
cc:
Subject: Re: Memo to Exchange to transfer positions

---------------------- Forwarded by Mark - ECT Legal Taylor/HOU/ECT on
12/21/98 04:50 PM ---------------------------
To: Janelle Scheuer/HOU/ECT@ECT
cc:
Subject: Re: Memo to Exchange to transfer positions

Here is a draft letter to the Exchange requesting permission to effect the
Seagull transfer.


Steve:

Thought you might want to see how we're pursuing the "transmission equality"
issue in Maryland.   Rick and Joe were blind copied on the original message.

Hope you're doing well.

Lisa
---------------------- Forwarded by Lisa Yoho/HOU/EES on 05/09/2000 08:04 PM
---------------------------

"Lori W. Walter" <lwalter@wolfblock.com> on 05/09/2000 01:54:18 PM
To: <cmenhor@alleghenyenergy.com>, <rcarder@alleghenyenergy.com>
cc: <bammon@psc.state.md.us>, <ctimemrman@psc.state.md.us>,
<gcarmean@psc.state.md.us>, <gelert@psc.state.md.us>
Subject: APS Compliance

Please see attachment.

 - H7W01!.WPD


Response from Steve Kean:

Ken will be cosponsoring the event and asked us to do a PAC contribution.  I
think your points are most valid and we'll reduce to $2,000.

	Joe Hillings
	10/24/2000 03:07 PM

		 To: Steven J Kean/NA/Enron@Enron
		 cc: Richard Shapiro/NA/Enron@Enron, Cynthia Sandherr/Corp/Enron@ENRON,
Carolyn Cooney/Corp/Enron@ENRON
		 Subject: Enron PAC Contribution

Joe Hillings
Enron
1775 Eye Street, NW
Suite 800
Washington, DC  20006
202-466-9145
202-828-3372 (fax)
email:  jhillin@enron.com

Steve: I understand that you are considering a $3,500 Enron PAC contribution
to Congresswoman Shiela Jackson Lee. Chris and Citigroup co-hosted an event
for Shiela last August in Washington which raised $17,000. Additionally,
Enron PAC contributed $1,500 for her primary race (she had no race) and
$1,000 for the general election. Her opposition is nominal. We have also
handled various personal requests for her such as tickets to Enron Field.

She has been helpful on several issues this year such as H1-B Visa and was in
India with President Clinton at which she spoke to the Power Minister in a
helpful way. Ken Lay and others jawboned her to get her vote in favor of PNTR
for China although I think she was bargaining with everyone as she frequently
does. Chris Long has developed a good relationship with Shiela but she seldom
seeks us out and I think her "delayed" position on PNTR for China was
unbecoming a representative from Houston. Houston will gain from PNTR for
China.

I would recommend a maximum of $2,000 to go along with our recommendation
that she be more attentive to our positions on leading issues.

Joe


---------------------- Forwarded by Vince J Kaminski/HOU/ECT on 12/22/2000
04:35 PM ---------------------------

Nelson Neale@ENRON
12/22/2000 03:15 PM
To: Vasant Shanbhogue/HOU/ECT@ECT, Vince J Kaminski/HOU/ECT@ECT
cc:
Subject: Contact info

I will be out next week.  If there are any problems with or questions
concerning the grains report, please let me know.  I can be reached on my
cell phone at 713-303-5973 and will periodically check voice mail.  Have a
good holiday!

Nelson


I haven't read this, so I don't know if it is anywhere close to your deal,
but here's a bootleg copy of the Frontera agreement, just to give you a sense
of some type of starting point.

Kay


Jacques,

The agreement looks fine.   My only comment is that George and Larry might
object to the language that "the bank that was requested to finance the
construction of the project declined to make the loan based on the high costs
of the construction of the Project".   Technically, that bank lowered the
loan amount based on lower estimates of rents which altered the amount of
equity that would be required.

Did I loan them $1,300,000?  I thought it was less.

Regarding Exhibit A, the assets include:  the land, architectural plans,
engineering completed, appraisal, and soils study.   Most of these items are
in a state of partial completion by the consultants.  I have been speaking
directly to the architect, engineer, and soils engineer.   I am unclear on
what is the best way to proceed with these consultants.

The obligations should include the fees owed to the consultants above.  Do we
need to list balances due or just list the work completed as an asset  and
give consideration of $5,875 for the cash paid to the engineer and appraisor.

Phillip


3:00 should be okay.  His flight arrives in Houston at 1:00 p.m.  We'll
confirm with Derek and Sharon will confirm back to you.

From: Elizabeth Sager on 04/29/2001 11:32 AM CDT
To: Peter Keohane/CAL/ECT@ECT
cc:
Subject: Re: Derek Flaman - Enron Direct Limited Partnership

Peter

I just remembered I have a Dr appointment on the 10th at 400 - can Derek make
it at 300


Richard Sanders has asked me to set up a meeting regarding the above
referenced.  The following participants are:

Lisa Mellencamp
Mark Peterson
John Hopley
John Enerson
Richard Sanders

It looks as though, this Friday, Aug. 13. at 2:00 will be a good time for
everyone.  Please let me know if this time is convenient for you.  The
location will be 38C1.  (I tried to contact you by phone today, but your
extension 31406 was forwarded to a non working number).

My extension is 39402, if you wish to call me.

Thanks
Twanda