-----Original Message-----
From: 	Landry, Chad
Sent:	Thursday, November 08, 2001 2:01 PM
To:	Lenhart, Matthew
Subject:	FW: Dynegy Inc.: IN THE MONEY: Enron Transparency Not Transparent Enough

 -----Original Message-----
From: 	djcustomclips@djinteractive.com@ENRON
Sent:	Thursday, November 08, 2001 12:57 PM
To:	5193@WCTOPICS.djnr.com
Subject:	Dynegy Inc.: IN THE MONEY: Enron Transparency Not Transparent Enough

IN THE MONEY: Enron Transparency Not Transparent Enough
By Michael Rapoport

11/08/2001
Dow Jones News Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

   A Dow Jones Newswires Column

  NEW YORK -(Dow Jones)- So Enron Corp. (ENE) says it wants to be more
transparent - to make its impenetrable financial results and corporate
structure easier for investors and analysts to understand.
  Based on its announcements Thursday, however, it still has a heck of a
long way to go.

  With Enron's restatement Thursday of nearly five years' worth of
earnings and additional information about the maze of off-balance-sheet
deals related to it, we now have a lot more information about the mess
at Enron than we had 24 hours ago. But we're not much closer to
understanding just what HAPPENED to leave Enron in such a mess - and
that's because the company's explanations of all this continue to be
dense, confusing and next to impossible to grasp.

  Try this tidbit, from the Form 8-K Enron filed about the restatements
Thursday with the Securities and Exchange Commission:

  "In addition, Enron's net income is reduced for specific JEDI revenues
previously allocated to Chewco, relating to the appreciation in value of
Enron stock, which eliminate upon consolidation. This, in effect,
reduces Enron's share of JEDI's earnings."

  Huh? And no, it doesn't help you to know that "Chewco" is an entity
that wasn't included in Enron's financial results but which Enron now
admits should have been. Or that "JEDI" isn't a "Star Wars" reference
but a limited partnership in which both Enron and Chewco had invested.
It's still impenetrable.

  Then there are the times when Enron just plain doesn't give enough
information. The company says its decision that Chewco should be
included in its results after all "is based on current information that
Chewco did not meet the accounting criteria to qualify as ...
unconsolidated..." Uh - okay. WHY didn't it meet the criteria, and why
did Enron previously believe that it did? Enron doesn't say.

  Finally, Enron makes some assertions that just make you scratch your
head. The company says part of the restatement of its earnings stems
from unspecified "prior-year proposed audit adjustments and
reclassifications which were determined to be immaterial in the year
originally proposed."

  Hmmm. Beyond the fact that Enron doesn't elaborate on the nature of
these "audit adjustments and reclassifications," or why they were
originally considered immaterial, consider that according to Enron's own
figures in the 8-K, they add up to a negative earnings impact of $87
million since 1997. That amount doesn't sound like any definition of
"immaterial" I've ever heard.

  An Enron spokesman couldn't immediately be reached for comment.

  In fairness, this lack of clarity may be all but inevitable given
Enron's Byzantine structure, which involves dealings with outside but
related entities that also have third parties involved, which in one
case have a subsidiary that allowed Enron to hedge the risks of an
investment, and in another case is selling assets purchased from Enron
to OTHER entities in order to finish paying Enron for the original
transaction, and ... you get the idea. It's next to impossible to make
clear because Enron's structure is just too baroque to understand in the
first place.

  The market is plenty puzzled by all this, even in the wake of Enron's
attempt to clarify things. Take a look at the company's drunken-sailor
stock chart from Thursday. After news of the restatements hit, Enron
stock first jumped higher, going as high as $10 a share, then soon
dropped back, to as low as $8.40, as investors started to digest the
details of the news. Then up again to about $9.25, then down again to
its current level of around $8.50.

  There's no reason investors should be confused like this. There is
absolutely no reason that a reasonably intelligent layman, with an
elementary working knowledge of corporate finance, should be unable to
understand the regulatory filings, structure, earnings and balance sheet
of any public company.

  If that's happens, it's the company's fault, not the investor's -
either because the company hasn't explained things well enough or
because its structure is needlessly complicated to begin with. If Enron
wants to get back the market's confidence, fixing that problem, one way
or the other, would be a good place to start.

  -By Michael Rapoport, Dow Jones Newswires; 201-938-5976;
michael.rapoport@dowjones.com

Folder Name: Dynegy Inc.
Relevance Score on Scale of 100: 100

______________________________________________________________________

To review or revise your folder, visit http://www.djinteractive.com or contact Dow Jones Customer Service by e-mail at custom.news@bis.dowjones.com or by phone at 800-369-7466. (Outside the U.S. and Canada, call 609-452-1511 or contact your local sales representative.)
______________________________________________________________________

Copyright (c) 2001 Dow Jones & Company, Inc. All Rights Reserved


Avoid the crunch on election day by voting early!

ENRON is providing employees with
complimentary shuttle service
 from the Enron Building to the downtown early voting site!!

Thursday, November 2
and
Friday, November 3
1319 Texas Avenue @ Austin Street
7:00 am until 7:00 pm
(transportation by Beal's - pick-up on the West end of Andrews Street)

In order to vote early at this site,
you must be registered in Harris County
and present your drivers license for ID verification
(your voter registration card is not necessary)

Please take advantage of this opportunity and VOTE!!

For election-related questions, please reference this website:
www.co.harris.tx.us/cclerk/elect.htm


We are 8 MW long  HE 1-5 at Montana system for Saturday  11/18.  Please sell
this length. It is Portland's generation at Colstrip.

The Portland deal number is 268656

Enpower Real time manager accurately reflects this length.

Thanks,

Cara


----- Original Message -----
From: LIZ PRIOR
To: ryan.watt@enron.com  ; patrice.l.mims@enron.com  ; mark.schrab@enron.com  ; lisa.kinsey@enron.com  ; kirk.lenart@enron.com  ; grant.oh@enron.com
Sent: Wednesday, October 24, 2001 7:38 PM
Subject: Fw: AOS IS 20% FOR GAS DAY OCT. 26

----- Original Message -----
From: LIZ PRIOR
To: Sent: Tuesday, October 23, 2001 8:41 PM
Subject: Fw: AOS IS 20% FOR GAS DAY OCT. 25
CAN YOU FORWARD THIS TO MARK, HE DOESN'T SEEM TO  GET THEM WHEN I SEND FROM HOME.

THANKS

LIZ

----- Original Message -----
From: LIZ PRIOR
To: ryan.watt@enron.com  ; patrice.l.mims@enron.com  ; mark.schrab@enron.com  ; lisa.kinsey@enron.com  ; kirk.lenart@enron.com  ; grant.oh@enron.com
Sent: Monday, October 22, 2001 8:54 PM
Subject: Fw: AOS IS 20% FOR GAS DAY OCT. 24

----- Original Message -----
From: LIZ PRIOR
To: ryan.watt@enron.com  ; patrice.l.mims@enron.com  ; mark.schrab@enron.com  ; lisa.kinsey@enron.com  ; kirk.lenart@enron.com  ; grant.oh@enron.com
Sent: Sunday, October 21, 2001 8:15 PM
Subject: AOS IS 20% FOR GAS DAY OCT. 23


unable to access approval website via link.  Please advise - I want to
approve both requests that were sent to me for Sladana Kulic
PL
3-7376


Dear U2 Fan,

U2.Com is set to host the premiere of director Kevin Godley's new video for
Stuck In A Moment You Can't Get Out Of.

A clip from the new video will be live on the site later today, in advance
of the new single, released in European territories next month.

Switching to the other end of U2's career altogether, U2.COM is also now
offering an exclusive download of I Will Follow, the track voted the fans
favourite from BOY after our two week poll. The poll on OCTOBER has just
begun.

We are also now featuring The Oracle - in which fans can ask anything they
like about U2 and get an answer which usually makes no sense at all.  One
fan e-mailed us to say he asked The Oracle  'How are Bono's driving skills?'
The Oracle replied, 'Through the walls we hear the city groan...'

And you only have a few final days to to win a signed set of the complete U2
album collection on vinyl.

Next month we aim to be first with information on the world tour which
begins in  March. Tell your U2 friends to register today!

Best wishes for the holiday season
u2.com

www.U2.com is powered by WorldOnline.com


You know what would have been a fabulous piece of information to go with this
email??  Harry's email address.


Dear Market Structure Working Group Members;

Attached please find the following meeting materials for tomorrow's
meeting:

(See attached file: VB_tariff_desc.pdf)(See attached file:
VB_Comments_by_Jim_Scheiderich.pdf)(See attached file: MSWG Default
Decremental Bid 7-17-01.pdf)(See attached file: MSWG MHBT 7-17-01.pdf)(See
attached file: ConOp_MHBT.pdf)(See attached file: VB_Status.pdf)
Regards,
Monica Ryan-Taber
518-356-6222
 - VB_tariff_desc.pdf
 - VB_Comments_by_Jim_Scheiderich.pdf
 - MSWG Default Decremental Bid 7-17-01.pdf
 - MSWG MHBT 7-17-01.pdf
 - ConOp_MHBT.pdf
 - VB_Status.pdf


Good question.   We need to shift as of a specific date with fixed load obligations in the EWS retail books.

 -----Original Message-----
From: 	Belden, Tim
Sent:	Wednesday, August 22, 2001 2:01 PM
To:	Lavorato, John; Presto, Kevin M.
Subject:	Asset Profile / Site Profile / DSM

what's the word on this?  we need to get moving forward.


Are you coming over on Saturday night?

We can talk then.

Chris


PLEASE NOTE SPECIAL HOURS

Notice No. 01-349
October 22, 2001

TO:       All NYMEX Members/Member Firms
          All NYMEX Clearing Members
          All NYMEX Floor Traders
          All NYMEX Operations Managers

FROM:     George Henderson, Vice President

RE:       Options Expiration Operational Procedures for the Trading
Floor and Clearing Members - Revised Hours
________________________________________________________________

The expiration date for the November 2001 options contract for Unleaded
Gasoline (GOX1), Heating Oil (OHX1) and Natural Gas (ONX1) is Friday,
October 26, 2001.

GENERAL OPERATIONAL PROCEDURES

All Clearing Members and Qualified Floor Traders that carried an options
position as of the close of business day prior to the expiration day, or
engaged in trading activity on Expiration Day in the expiring options
contract will be required to have a knowledgeable, duly authorized
representative present at their normal work station promptly at 4:40 p.m.
until released by the Exchange staff as specified below.  All adjustments
and/or corrections, must be accompanied by relevant supporting
documentation
prior to being incorporated into expiration processing, in essence making
the expiration processing an extension of the afternoon trade resolution
procedures.  All input to the NYMEX Clearing Department will conclude no
later than 30 minutes after floor representatives are released.

Exchange Clearing (299-2110), Floor Trade Processing (299-2068 and
299-2169)
personnel, as well as a representative of the Floor Committee will be
available to assist with the processing of notices of Exercise and
Abandonment, position transfers, trade corrections and other questions or
problems you may have.

CLEARING DEPARTMENT OPERATIONAL PROCEDURES

The Option Expiration process is a screen based process for which all
information is provided on the screens on C21 terminals. No Option
Expiration Reports will be provided. The following screens will assist you
through the Option Expiration process:

MEMBER TRADE INQUIRY
Contains real-time top day trade information, trade information for the
previous 4 business days and trade=s adjusted for the previous 4 business
days by adjustment date.

SINGLE POSITION MAINTENANCE
Contains a real-time snapshot for each option series from the start of day
position to the projected end of day position.

REVIEW ACCEPT REJECT TRANSFERS
Contains all trade and position transfers TO your firm and the status of
each transfer.

REVIEW SUBMITTED TRANSFERS
Contains all trade and position transfer FROM your firm and the status of
each transfer.

EXERCISE NOTICE SUBMISSION
Contains your available long position and an input field to enter the
number
of long positions you wish to exercise.

DO NOT EXERCISE SUBMISSION
Contains your available long position and an input field to enter the
number
of long positions you wish to abandon.

POSITION CHANGE SUBMISSION
PCS may be submitted either by manual input or by electronic transmission.
Any PCS input on a Clearing 21 terminal will be the input processed by the
system.  This input may be made at any time prior to 5:55 p.m.  Any PCS
input via transmission for that contract series will be disregarded.

ALL POSITIONS ARE DEEMED FINAL
Upon completion of all PCS input, all positions will be deemed final.

EXERCISE/ASSIGNMENT INFORMATION
Will be available to you on the Single Position Maintenance window by
contract series or the Assignment List window which contains all your
Assignments on one window. You will be notified of its availability by C21
E-Mail and by Fast Facts. This should occur within 1 hour of the last PCS
input.

All Clearing Members are required to have an authorized representative(s)
at
their C21 workstations in preparation for any communication during the
expiration process.

FAST FACTS
Clearing Members should call the Fast Facts information service 301-4871,
access code 700 for event messages advising Members of the event status.

E-MAIL
Clearing Members should read their C21 E-Mail messages immediately to be
aware of event status.

The standard event Fast Facts and/or E-Mail messages and the sequence in
which they will be announced are:

STANDARD EVENT           APPROXIMATE TIME            USUAL   FAST
FACTS(F)
  MESSAGES                       OF MESSAGE        EVENT TIME
E-MAIL    (E)
                           AVAILABILITY
BOTH      (B)

Announce Out-of-the                 4:45PM          4:45PM        F
Money Exercise and In-the-Money
Do Not Exercise Submissions

Announce Final Input to C21         5:40PM          5:55PM        E
Cutoff Time

All positions are deemed final      6:30PM          5:55PM        F

Announce Exercise/Assignment        7:15PM          7:15PM        B
Information Available on the Single
Position Maintenance Windows

All Report Distribution is         11:30PM         11:30PM        F
completed

The times appearing in the Usual Event Time column are based on normal
operational conditions and could vary.

If you have any questions concerning these procedures, please contact
Anthony Di Benedetto at 299-2152 or John Ramos at 299-2142 prior to the
expiration date.

 <<EXPFORMSPEC.XLS>>

(See attached file: EXPFORMSPEC.XLS)

 - EXPFORMSPEC.XLS


Dale prepared the docs below before he left town.  I have a question on the
Schedule and will give you a call later.  SS
---------------------- Forwarded by Sara Shackleton/HOU/ECT on 08/10/99 11:08
AM ---------------------------

Dale Rasmussen
08/06/99 07:28 PM
To: Greg Wolfe/HOU/ECT@ECT, Saji John/HOU/ECT@ECT, Christian
Yoder/HOU/ECT@ECT, Sara Shackleton/HOU/ECT@ECT
cc:
Subject: Project Bunyan

The draft documents for the index/swap structure:

I will be out of the office until the 16th.  Jan will be able to get hold of
me if I am out of cell range.

In my absence Christian has graciously volunteered to shepard the deal as
needed.

Sara:  Have I done severe damage to the confirm/schedule?


Group

We have 10 MW of length from Sierra through the APX light load at $185.  Stan
purchased this NP15 length from the APX and it should be scheduled DA by
Jeremy.  There should be a ECTRT load zone in PGE3 with this length.  Use
whatever opportunities are out there (dynegy across COB or a straight export)
to maximize this position.  The deal numbers are: 581335-purchase from APX
and 581356-desk to desk deal.  Please make sure this gets taken care of.

Cheers
Jesse


-----Original Message-----
From: Muzzy, Charles T.
Sent: Tuesday, January 22, 2002 12:39 PM
To: Boettcher, Amanda; Gerl, Jeff; Kuehl, Toby; Floyd, Jodie; Schrab, Mark L.; Brady, Kevin; Pendergrass, Cora; Lenart, Kirk; Espey, Darren; Greif, Donna; Driscoll-Ernest, Marde L.
Subject: Love

> > How do you say I love you in 14 different languages:
> >
> > 1. English . . . . . . . . . .I Love You
> > 2. Spanish . . . . . . . . . .Te Amo
> > 3. French . . . . . . . . . . Je T'aime
> > 4. German . . . . . . . . . . Ich Liebe Dich
> > 5. Japanese . . . . . . . . . Ai Shite Imasu
> > 6. Italian . . . . . . . . . .Ti Amo
> > 7. Chinese. . . . . . . . . . Wo Ai Ni
> > 8. Swedish . . . . . . . . . .Jag Alskar
> >
> > 9-14. Arkansas, Louisiana, South Carolina,
> > Georgia, West Virginia, and Mississippi.........."Them's Nice Tits"
> >
> >
> >
> >
> >

  _____

Join the world's largest e-mail service with MSN Hotmail. Click Here <http://go.msn.com/bql/hmtag4_etl_EN.asp>


D'Arcy, please call me tomorrow morning to get on the calendar.  It's best in
the future to copy me on all emails to Whalley for a faster response.

Many Thanks,

Liz

D'Arcy Carroll@ENRON
12/04/2000 03:28 PM
To: Mark Frevert/NA/Enron@Enron, Greg Whalley@ECT
cc: Monica Matias/SA/Enron@Enron
Subject:

Mark/Greg,

Please confirm your interest and availability to set aside 30 minutes, or so
Dec 6, 7 or 8, for me in Houston this week.

I am in a final phase of an expat re-assignment or relocation and would like
to discuss with you:

Enron's pricing, structuring and position-taking capability for South America
etc.,.. expected to be in place from the year 2000, at least in power in
Brazil.

Failure/Successes and immediate opportunities in the Enron Brazil and South
America core (gas, power) and multiple commodity commercial effort(s),
including e-business/Networks issues.

Finance expertise  - the critical role that functional groups like Enron
Metals' (Trade and Structure Finance Group) and the Global Markets
Insurance/Global Risk groups will (need to) play in helping develop critical,
internal Enron finance, risk assessment and mitigation expertise to support
the competitiveness and viability of closing commercial transactions in South
America and elsewhere

My priority to help form and be re-assigned to a "Bundle Products"
Origination business unit  designed to initiate transactions which
specifically and formally leverage synergies across Enron Business Units - to
potentially include in Brazil, at least, power, pulp & paper, steel networks,
crude and products, and insurance/global risk.

Please find attatched files which detail some of my ideas for developing the
core gas and power trading and origination efforts and including the Bundled
Product unit.   The files were appropriately forwarded to Dave/John.

I have also attatched my CV should you be interested to review my background
and experience and  mention, as a reminder, that a meeting is critical in
potentially determining the outcome of my expat re-assignment or re-location
process,  needed to be concluded this month, Dec 2000.

Thank you for any efforts extended in my behalf.


Thanks for the Happy Birthday!   You know at this age you do not want any
more~!

Have a good day!!!!

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


I think your plan sounds fine.  I'm not sure there is
too much he can do to talk his way completely out of
it.  I just don't like the fact that he has been such
a weirdo lately.  It sounds like he just may have a
flaw of some type.  I guess if he had a serious
girlfriend come back into his life or something, maybe
that would explaing things.  Otherwise, if he was
goint through some type of other trauma, you would
think he would share it with you.  I can't wait to
find out how it goes.  Molina's sounds great, what a
place to make a tense situation more relaxed.  The
phone call is a must, I wouldn't answer any more e
mails from him (ever!).

About Korea...I'm glad you are still coming over.  It
will be fine that you are coming with your parents.
We'll just drag them along with whatever we want to
do.  I don't recall them ever slowing us down before!

Have fun in London.  Do you have any Enron interviews
scheduled?  I'm sure you and Emily are going to have a
lot of fun.  I hope you like the London office.  I
guess you may have heard our latest.  We filed all of
the paperwork electronically for our follow-on
assignment after Korea.  We ranked Germany, Hawaii,
Savannah, Ft. Bragg (NC) and Ft. Campbell (KY) in that
order.  The guys e mailed us back and said he wouldn't
be able to get us Europe or Hawaii and that Savannah
is "overstrength" and that he would probably need us
at Campbell.  Needless to say, we are both furious
about getting our last choice.  Not necessarily with
the base, but with our lack of selection.  Ft.
Campbell wouldn't have even been in our list if it
wasn't the only place left where Chinooks go.  It
really ticks me off that hard work just doesn't pay
off in the Army.  We didn't get an option coming out
of Korea, we got an assignment.  What's the incentive
to do your job well, and most importantly, what is the
incentive to stay in.  I'm so mad that we don't have
any say in our next assignment and that Chuck could
likely get Korea again after that.  Gotta love the
Army.

It's not a done deal, I've got to get Chuck fired up a
little to fight this whole thing.  The guy said he'd
get back to us in a few weeks and let us know for
sure.  I hope we can beat him with a response and at
least try and negotiate with him.  We may even extend
6 months in Korea if it will make a difference.

Ft. Campbell is an hour outside of Nashville, TN.  I
think there are nice areas to live in closer to
Nashville.  Maybe we could live halfway in between and
I could work in Nashville and Chuck could commute a
little to work.  I just hate the idea of living in
another small town for another 2-3 years.  Enterprise
was enough.  We'll keep you posted.  Maybe it will
work out for the best anyway.  Maybe this is how Chuck
is going to get his big fixed wing break.

Let me know how the whole Ted thing goes, and we'll
start planning for your visit.

Chris

__________________________________________________
Do You Yahoo!?
Send instant messages & get email alerts with Yahoo! Messenger.
http://im.yahoo.com/


Testing


Attached is the weekly status update for the business setup of enovate.  I
have highlighted in yellow those items which had activity this week.  We made
significant progress this week as the enovate Risk Management Policy was
approved and should be fully executed either this afternoon or Monday.
Please call me with any questions.

Thanks,

Gregg


i need my beauty sleep.

annatiation


Faith,

Attached is information regarding the Texas Desk as it relates to the current
Texas market, EOL performance metrics, and Post HPL Action Plan.

Please do not hesitate to call with questions.

Thanks,

Eric
x3-0977


NYMEX Membership Services
February 2, 2001
Notice # 00-007

NOTICE OF INTENTION TO TRANSFER

Please be advised that effective with the close of business, February 1,
2001, the following member(s) have given notice of intention to transfer
their sole Membership within the Exchange:

Lino DiBernadino (LINO-3545)

REINSTATEMENT OF MEMBERSHIP PRIVILEGES

Please be advised that effective with the close of business, February 2,
2001, the following member(s) has reinstated his membership privileges:

Jonahiby Tauil (JJR-3341) as a Licensee Member with a qualified trader
guarantee provided by MBF Clearing Corp.

NOTICE OF INTENTION TO SWITCH QUALIFYING CLEARING MEMBER

 Please be advised that effective with the opening of business, February 2,
2001,
Refco, Inc., will no longer guarantee the following member(s):

Michael Doyle (TEX-3045)
Francis Clements (UCLA-4450)
Lazarus Chavez (CHAZ-3062)

 However, the above mentioned will remain a member guaranteed by BNP Paribas
Commodity Futures, Inc.  In connection therewith, notification of any claims
against the aforementioned individuals arising out of transactions executed
on the Exchange up to the close of business February 2, 2001, must be
submitted to the Corporate Secretary,s Office within (10) ten days.

Members and Member Firms have (10) days from the date of this notice to
advise the Corporate Secretary,s Office of any claims in accordance with Rule
2.51.

 Inquiries regarding the above should be addressed to the Member Services
Department at 212-299-2379.

__________________________________________________
Please click on the link below to indicate you have received this
email.

"http://208.206.41.61/email/email_log.cfm?useremail=sara.shackleton@enron.com&
refdoc=(MS-07)"

Note: If you click on the above line and nothing happens, please copy
the text between the quotes, open your internet browser,
paste it into the web site address and press Return.


Richard Shapiro
	02/21/2001 04:53 PM

		 To: Ginger Dernehl/NA/Enron@Enron
		 cc:
		 Subject: California

Please forward to entire group:  these are materials recently developed re:
California.
---------------------- Forwarded by Richard Shapiro/NA/Enron on 02/21/2001
04:52 PM ---------------------------

Janel Guerrero
02/08/2001 09:47 AM
To: aameece@quinngillespie.com, dlugar@quinngillespie.com
cc: Linda Robertson/NA/Enron@ENRON, Mark Palmer/Corp/Enron@ENRON, James D
Steffes/NA/Enron@Enron, Richard Shapiro/NA/Enron@Enron, Lora
Sullivan/Corp/Enron@ENRON

Subject: one-pagers FINAL

Dave and Ashley:  attached are the final version of the one-pagers.  One of
the one-pagers is running onto the second page and I think I deleted out one
of the block headings as well.  Would you mind doing "clean-up" on the
graphics?  Once clean-up is finished, we're good to go.  Thank you !!  Call
if you have questions.


What's your title for their program?

Best,

Pat


Amy:
Forgot to mention timing.  I can do nights and weekends, but mainly as much
time with them as possible. Thanks
Ben


Rod,
Here's a copy of the slides.

 <<INGAA-FERC  November  09, 2000-Final.ppt>>

Byron S. Wright
El Paso Energy
713-420-5501
wrightb@epenergy.com

******************************************************************
This email and any files transmitted with it from El Paso
Energy Corporation are confidential and intended solely
for the use of the individual or entity to whom they are
addressed. If you have received this email in error
please notify the sender.
******************************************************************

 - INGAA-FERC  November  09, 2000-Final.ppt


To add to what Rick said, I would add that effective DSM requires that price
signals be sent to customers AND customers have the ability to repond -- even
Mr. I See Market Power Under Every Bush, Dr. Frank Wolak, has as one of his
key solutions -- competitive retail markets.

Sue Mara
Enron Corp.
Tel: (415) 782-7802
Fax:(415) 782-7854

	Richard Shapiro
	04/04/2001 11:07 AM

		 To: Linda Robertson/NA/Enron@ENRON
		 cc: Steven J Kean/NA/Enron@Enron, Joe Hartsoe/Corp/Enron@ENRON, Tom
Briggs/NA/Enron@Enron, James D Steffes/NA/Enron@Enron, Paul
Kaufman/PDX/ECT@ECT, Janine Migden/NA/Enron@Enron, Jean Ryall/NA/Enron@ENRON,
Aleck Dadson/TOR/ECT@ECT, Ricardo Charvel/NA/Enron@Enron, Jeff
Dasovich/NA/Enron@Enron, Susan J Mara/NA/Enron@ENRON, Jose
Bestard/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Steve Montovano/NA/Enron@Enron
		 Subject: Re: Lay/Skilling Talking Points for Bush Admin Meetings and Calls

I think these are quite good...the missing piece, I would argue, that we need
to include is a talking point on the need for FERC to focus significant
resources on the identification and elimination of market power in
electricity markets and the need to encourage the development of distributed
generation and more effective demand - side response mechanisms , partly in
response to market power concerns. This is a huge issue in  getting wholesale
electricity markets to work effectively, i.e; to create discernable  consumer
welfare benefits.... and we ( Enron ) need to talk about this this issue and
concern and talk about it frequently and w/ the same passion we talk about
the need for open markets.

Linda Robertson
04/04/2001 12:09 PM
To: Steven J Kean/NA/Enron@Enron
cc: Richard Shapiro/NA/Enron@Enron, Joe Hartsoe/Corp/Enron@ENRON, Tom
Briggs/NA/Enron@Enron

Subject: Lay/Skilling Talking Points for Bush Admin Meetings and Calls

Steve, per our conversation yesterday in Houston, what do you think of these
TPs?  To be used by both Ken and Jeff in conversations and meetings with the
Bush Administration.

 - Skilling Talking Points.doc


This is an automatically generated Delivery Status Notification.

Your message has been successfully relayed to the following recipients, but the requested delivery status notifications may not be generated by the destination.

       joe.arens@gs.com

--------- Inline attachment follows ---------

From:  </O=ENRON/OU=NA/CN=RECIPIENTS/CN=MHEARD>
To: joe.arens@gs.com
CC: Brogan, Theresa T. </O=ENRON/OU=NA/CN=RECIPIENTS/CN=TBROGAN>
Date: Friday, October 26, 2001 2:42:33 GMT
Subject:

Mr. Arens:

Pursuant to Theresa Brogan's request, we have prepared and attach for
your review a draft Assignment and Assumption Agreement among Enron
North America Corp. ("ENA"), ECT Investments, Inc. ("ECTI") and Morgan
Stanley & Co. Incorporated ("Morgan") whereby ENA assigns all its
rights, title, interests and obligations in Account Nos. 002-070076,
002-257830 and 033-671710 to ECTI.  Please let me know if the attached
documents are acceptable and we will process for signature.

Thank you.

Marie Heard
Senior Legal Specialist
Enron North America Corp.
Phone:  (713) 853-3907
Fax:  (713) 646-3490
marie.heard@enron.com

				 <<014assign(goldman sachs).doc>>


I have spoken with Wayne Stoltenberg at Bear Stearns (on the Investment
Banking side) about the need to set up an account at Bear Stearns for JEDI I
to execute the sale of the Quicksilver Shares.  I explained that the
operations people are reluctant to establish an account if there is little
activity anticipated.  In the case of this JEDI I account, the only
transaction this will take place is the SALE of the Quicksilver shares, there
will be no further activity.  In fact, we will probably be closing the
account soon after the trade is settled.  He is very much aware of the
situation and is going to contact the appropriate people in Chicago to
instruct them to be fully cooperative with Enron in establishing this
account.

I realize this is a huge inconvenience to have to set up an account for this
one trade, but given the negotiations with the company and Bear Stearns, it
is the best thing to do.  If anybody has any questions, please let me know.
As I understand the events, the following items are being prepared by us
(Enron):

Sara/Stephanie - preparing documents to open the account
Mary - preparing stock power/resolutions to sell the stock and retrieving the
shares from the vault
Jim - obtaining any legal opinions if necessary (I just don't remember)
Aneela/Theresa - working with the BS contact to send documents to
Mark/Jempy - working with Wayne(BS) to get the sale done

If this is consistent with what you all think, great.  If not, please respond
to the group list with whatever I have wrong.  I hope everything goes well, I
know things are in good hands with legal and operations, so let me know.
Thanks so much for all your help.  Donna


Bob,

On the Texas desk, the majority of our deals are nominated manually (on Excel
or preprinted forms), with most of the information pulled from Sitara instead
of Unify.  So, these noms were not late.  For a couple of 3rd party
pipelines, we do use Unify.  But we did not have nom changes for 5/4.  Our
only problem was sending noms to HPL.  Which is sending information to
yourself, but it still delays the confrimation process for the pipeline.
This nom was sent about 30 minutes late.  Let me know if you have any
questions.

Daren
---------------------- Forwarded by Daren J Farmer/HOU/ECT on 05/03/2000
04:22 PM ---------------------------

Edward Terry
05/03/2000 02:18 PM
To: George Smith/HOU/ECT@ECT, Randall L Gay/HOU/ECT@ECT, Daren J
Farmer/HOU/ECT@ECT, Patti Sullivan/HOU/ECT@ECT
cc: Robert Superty/HOU/ECT@ECT
Subject: Unify

Please provide Bob Superty with a list of pipelines whom were late or had
nomiation issues as a result of this mornings Unify problems.


ok


---------------------- Forwarded by Rob G Gay/NA/Enron on 01/09/2001 07:42 PM
---------------------------

Tracee Bersani@ECT
01/08/2001 01:27 PM
To: Rob G Gay/NA/Enron@Enron, Richard A Lammers/SA/Enron@Enron
cc:

Subject: Change Order log (forecast and contingent only)

Per your request ->

Also, you may be interested in the approved amounts:


Start Date: 4/18/01; HourAhead hour: 2;  No ancillary schedules awarded.  No
variances detected.

    LOG MESSAGES:

PARSING FILE -->> O:\Portland\WestDesk\California Scheduling\ISO Final
Schedules\2001041802.txt


Tana,

Yesterday, Deutsche Bank faxed me a "Derivatives Novation Letter" assigning
the
BT trades to Deutsche Bank-London Branch, as of February 23, 2001.  Attached
to
the novation letter is a 23 page deal by deal list of all novated deals (why
they
can't just say "all outstanding deals", I don't know).   Should I fax this up
to you?

Diane

From: Tana Jones@ECT on 02/27/2001 09:26 AM
To: Laurel Adams/HOU/ECT@ECT, Janie Aguayo/HOU/ECT@ECT, Kimberly
Allen/HOU/ECT@ECT, Diane Anderson/NA/Enron@Enron, Jean Bell/HOU/ECT@ECT, Bob
Bowen/HOU/ECT@ECT, Julie Brewer/NA/Enron@Enron, Sharen Cason/HOU/ECT@ECT,
Celeste Cisneros/NA/Enron@Enron, Jason Fischer/NA/Enron@Enron, Jorge A
Garcia/NA/Enron@Enron, Larry Joe Hunter/HOU/ECT@ECT, Kimberly
Hundl/Corp/Enron@Enron, Melissa Ann Murphy/HOU/ECT@ECT, Bianca
Ornelas/NA/Enron@Enron, Stephanie Piwetz/HOU/ECT@ECT, Melissa
Rodriguez/HOU/ECT@ECT, Dianne Seib/CAL/ECT@ECT, Kim S Theriot/HOU/ECT@ECT,
Melinda Whalen/CAL/ECT@ECT, William  S Bradford/Enron@EnronXGate, Debbie R
Brackett/HOU/ECT@ECT, Tanya Rohauer/Enron@EnronXGate, Brant
Reves/Enron@EnronXGate, Tracy Ngo/PDX/ECT@ECT, Lesli
Campbell/Enron@EnronXGate, Veronica Espinoza/Enron@EnronXGate, Paul
Radous/Enron@EnronXGate, Wendi LeBrocq/Enron@EnronXGate, Russell
Diamond/Enron@EnronXGate, Tom Moran/Enron@EnronXGate, Edward
Sacks/Enron@EnronXGate, Nidia Mendoza/ENRON@enronXgate, Wendy
Conwell/NA/Enron@Enron, Darren Vanek/Enron@EnronXGate, Rudwell
Johnson/Enron@EnronXGate, Brent Hendry/NA/Enron@Enron, Sara
Shackleton/HOU/ECT@ECT, Mark Taylor/HOU/ECT@ECT, Carol St Clair/HOU/ECT@ECT,
Susan Bailey/HOU/ECT@ECT, Mary Cook/HOU/ECT@ECT, Samantha
Boyd/NA/Enron@Enron, Robert Bruce/NA/Enron@Enron, Stephanie
Panus/NA/Enron@Enron, Frank Sayre/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Cheryl
Nelson/NA/Enron@Enron, Francisco Pinto
Leite/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Marilyn Colbert/HOU/ECT@ECT, Diane
Ellstrom/Enron@EnronXGate, Lynn E Shivers/LON/ECT@ECT, Bill D
Hare/HOU/ECT@ect, Leslie Reeves/HOU/ECT@ECT, Jason Moore/HOU/ECT@ECT, Samuel
Schott/HOU/ECT@ECT, Anthony Campos/HOU/ECT@ECT, Bernice
Rodriguez/HOU/ECT@ECT, Frank L Davis/HOU/ECT@ECT, Carrie
Southard/LON/ECT@ECT, Amber Ebow/HOU/ECT@ECT, Adnan Patel/Enron@EnronXGate,
Stacey Richardson/HOU/ECT@ECT, Lisa Lees/HOU/ECT@ECT, Georgi
Landau/NA/Enron@ENRON, Cheryl Johnson/Corp/Enron@Enron, Stephanie
Sever/HOU/ECT@ECT, Mechelle Stevens/HOU/ECT@ECT
cc:

Subject: Bankers Trust/Deutsche Bank

Deutsche Bank has gotten back to me and is vacillating on what they want to
do with the Bankers Trust trades.  In particular, they haven't thought
through what they want to do with the online trades, don't like on online
documentation, and now they think they may want to do a full novation of the
trades once they decide how to resolve this.  So, until we hear back from
them (they said in about a week), just let the Bankers Trust financial trades
and master sit.


California,s power crisis has generated heated debate over the last several
months.  Unfortunately, this debate has generated more heat than light.  We
want you to know what the facts are and what we are doing about the crisis.
Please spend a few minutes reading the following overview on the situation
and our position on California energy issues.

What happened in California

The source of California,s current problem is as straightforward as supply
and demand.  California,s economy grew 29 percent since 1998.  This increased
the demand for electricity by 24 percent.  At the same time, regulatory
restrictions prevented new generation from getting built in the state.  So
demand grew but regulations prevented supplies from being added.  The result,
predictably, is a shortage.  This summer, peak capacity will be about 10
percent shy of peak demand, leading to further blackouts in the state.

In addition to the supply and demand imbalance, there are two other related
factors that led to the current crisis.  First, the state,s regulations
forced all sales and purchases into the spot market.  The spot market for
power is extraordinarily volatile.  The way firms behave in a free market
when faced with such volatility is to construct a portfolio of purchases long
term, medium term and short term, to reduce exposure to this volatility.  In
California, state regulation prevented this strategy.  This would be the
equivalent of putting the entire state on an adjustable rate mortgage in the
most volatile interest rate environment imaginable.  Everything was fine
while the power surplus persisted, but when shortages ensued, every megawatt
was purchased at the sky rocketing spot price.

Second, retail markets were not deregulated.  Regulated retail rates remained
in effect, and stranded cost recovery charges were structured to keep
competition out.  This meant that utilities were forced to pay high wholesale
prices in the spot market but were only able to recover costs at the
regulated retail rate.  They are now nearly bankrupt.

In short, California,s problems were caused by regulation, not deregulation.
Regulations prevented competitors from entering the market, prevented new
generation from being built, and prevented prudent hedging against volatile
spot prices.

At the time California was developing its restructuring plan, Enron warned
the state,s policy makers about these risks and proposed alternatives, which,
if adopted, would have averted the current crisis.

Enron,s Role

Many political leaders in the state have elected to fix blame rather than fix
the problem.  Power sellers, including Enron, have been vilified by the
politicians and the media.  Here are the facts:

? Other than a small amount of wind power, Enron is not a generator in the
state of California.  Every megawatt we sold in California we bought in the
same market available to other California purchasers.  Because we are a
market maker, not a generator, we are not biased toward high prices.  We are
interested only in having a market that works so that we can package products
for our customers.
? As a seller to end-use markets in the state, we provided protection from
the problems the states, utilities, and their customers, now face.  We
protected, and still protect, our customers from price volatility.

You may have read that EES recently elected to have the utilities supply
power directly to its customers in California instead of procuring power on
the open market.  Early reports mischaracterized this as a &turnback8 of our
customers to the utilities.  Here are the facts:

? As a result of a variety of factors existing in the current California
market, it made more sense for EES to source power for its customers directly
from the utilities.  This decision reduced EES,s market price risk by
allowing EES to access lower utility rates.
? EES did not terminate any customer contracts, and our customers continue to
receive the financial benefits of their contract prices.
? EES is continuing to work with its California customers to provide them
with other energy-related products and services, including assistance in
reducing the demand for power, particularly at peak times.

Enron is currently proposing solutions to help California work out of its
crisis; Enron continues to sign up customers in the state; and Enron
continues to actively manage its risks and capture opportunities in Western
power markets.  Enron,s primary business is managing risk for our customers
with solutions customized to meet their needs.  There has never been more
demand for our products and services.

The Solution

The solution to California,s crisis is also straightforward.  In summary, the
state must increase supply, reduce demand, reduce reliance on the spot market
and shore up the financial stability of the state,s utilities.

Increasing Supply

California,s process for siting and permitting new generation is nothing
short of Byzantine.  Enron has built plants elsewhere in the country in less
than a year.  In California, it often takes 5 to 7 years.  California simply
must streamline this process.  Ironically, while many of the regulations
generators must overcome are aimed at improving environmental quality, the
regulations are preventing new clean technology from coming online and
displacing current plants, which emit 40 times as much NOx.  California can
have abundant power and cleaner air by expediting the permitting of new
facilities.

Reducing Demand

Customers in California today have no incentive to reduce or shift demand.
They pay the same rate no matter what the market price is.  An open retail
market would trigger demand responses, which would balance supply and demand
at lower prices than today.  California should fully open its retail market.

Reducing Reliance on the Spot Market

In a truly deregulated market, customers would protect themselves from
volatile spot prices by purchasing some of their requirements on a longer
term, fixed-price basis.  The state has instead left procurement in the hands
of the utilities, which it has forced to buy exclusively in the spot market.
Opening the market at the retail level will give customers control over their
price risk.

Restoring the Financial Integrity of the State,s Institutions

The utilities in California are not paying their bills.  This has led to
greater uncertainty in the market, higher costs, and reduced flexibility to
arrive at lasting solutions.  California must permit its utilities to recover
their costs so they can pay their bills and invest in the transmission and
distribution assets necessary to get power from where it is to where it is
needed.

Just as important as doing these things, the state must avoid policies that,
while politically attractive, do not fix the problem or even make matters
worse.  Price caps have been proposed.  They don,t work; have never worked;
and they will not work here.  Price caps succeed only in creating shortages,
which then have to be allocated among competing users.  Imagine how
ineffectively the government would be in determining, for example, whether it
is better to make its limited power supplies available to the Imperial Valley
or Silicon Valley.  Price caps are a surefire way to make the current
shortage worse.

The state has also proposed to take over generation and transmission in
California.  There is no reason to believe, and every reason to doubt, that
the state will be more effective than free markets at investing in,
constructing, operating and maintaining assets.  This will also result in
California tax revenues being spent on power transmission and power
generation -- which the private sector can do -- instead of education, roads
and other public goods -- which the private sector cannot do.

As you are approached by people outside the company or are learning about the
crisis from the media, it,s important for you to know this:  We at Enron will
continue to serve our customers and we will continue to propose real
solutions to the state.


why don't you just give him the sunglasses you kept after i let you borrow
them over new years 2000.


EXECUTIVE SUMMARY
Of the four "Plan Bs" introduced recently by California legislature, only two proposals appear viable for SoCal, and surprisingly, PG&E.  The others either establish vulture funds for when So Cal goes under, or propose new ways of funding the transmission line deal.  The California legislature's inability to identify an immediate solution has cued the media to limit the publicity of the lesser "plan Bs."
At this point, SoCal is interested in a making a deal.  Not only are they are the on the verge of bankruptcy, but (unlike PG&E) SoCal has also significantly exposed its parent company to bankruptcy by not taking the necessary steps to protect its assets.  As reported earlier with PG&E, we are monitoring all activities surrounding SoCal assets, which could signal imminent bankruptcy.

The Infamous "Plan B"
Four hours of debate and the absence of Republican representation on Tuesday night led members of the state Assembly's so-called "Plan B" group to decide backing only legislation introduced by Assemblymen Dean Florez and Joe Nation.  A previous proposal by Senate President Pro Tem John Burton that poised the state to purchase SoCal's transmission lines for $2.76B to service debt and left the Ca. PUC to determine SoCal's unrecovered power costs prior to bond issuance, didn't't win support.  As reported earlier, sources indicate that Davis MOU is likely to suffer a similar fate once introduced by Senator Polanco later this week.

The Florez Plan
Florez's plan is currently under review in the Assembly Energy Committee.  The proposal allows PG&E to issue bonds secured by their assets and use the revenues to pay creditors.  The state would then assess a tax on the bond revenues aimed at servicing PG&E's debt with the CADWR.  Sources report one drawback to the plan is that PG&E bankruptcy Judge Montali would be required to authorize any such a transaction respective of other recommendations available to the court.  This may not be the most time-efficient course of action.  PG&E had shown signs of approval over similar plans in the months preceding their bankruptcy.

The Nation Plan
Nation's plan allows SoCal. Ed to sell bonds backed by ratepayer revenues generated from state approved rate hikes.  Additionally, the state would hold a five-year option on buying the transmissions lines for book value (roughly $1.2B), as well as holding to the SoCal concessions previously mentioned in Davis' MOU.  The drawback to Nation's proposal is that SoCal creditors (including banks and generators) would have to collectively agree to take debt repayment at $0.75 on the dollar.  Sources report that some SoCal creditors favor attempts to recoup dollar for dollar in bankruptcy court over conceding to a "haircut."  SoCal. reportedly approves of Nation's plan sticking to the principals outlined in Davis' MOU.


Mark (and Mark) are there any concerns with Enron Direct Canada (EDC) (the
mass markets retail affiliate, that is soon to be a subsidiary of EES) as
opposed to Enron Canada (as wholesale affiliate of ENA) entering into
financial transactions?  To date EDC has been entering into physical
transactions only for gas and power under forms that have been developed
based upon our wholesale physical contracts, Enron Direct UK's form, and
compliance with the local regulatory requirements for retailers.  If EDC was
to enter into financial transactions, they would tend to be papered under
omnibus financial GTCs with EDC (as ISDAs would likely not be marketable).
Of course credit would need to be obtained in advance, and the transactions
are not booked until the counterparty executes the paper.  Please let me know.

Peter.


deus ex machina (DAY-uhs eks ma-kuh-nuh, -nah, MAK-uh-nuh) noun

   1. In Greek and Roman drama, a god lowered by stage machinery to resolve
      a plot or extricate the protagonist from a difficult situation.

   2. An unexpected, artificial, or improbable character, device, or event
      introduced suddenly in a work of fiction or drama to resolve a
      situation or untangle a plot.

   3. A person or event that provides a sudden and unexpected solution to
      a difficulty.

[New Latin deus ex machina : deus, god + ex, from + machina, machine
(translation of Greek theos apo mekhanes).]

   "In fact the duke acts as the deus ex machina of the piece, working in
   the background to ensure that everything turns out right and manipulating
   the characters' actions along the way."
   Robert Nott, Lust, justice and faith, The Santa Fe New Mexican, Jun 23,
   2000.

When we face a serious crisis we often look upwards for divine intervention.
In such hopeless times we pray to the gods to descend from heaven and
deliver us from whatever travail prevails. In ancient Greek and Roman drama,
the gods literally came down from above, though not from heaven, to help the
heros of the drama and save the plot.

As it turns out, the gods themselves needed a little bit of help coming
down. A crane was used to lower a god onto the stage and untangle the plot.
Thus he was known as deus ex machina, literally, a god from a machine. Soon
the figurative use of this device in a drama began to be described by the
same name. Greek dramatist Euripides (480-406 BC) was particularly fond
of it. We are all intimately familiar with this device thanks to popular
cinema. The hero who had supposedly drowned half-way through the story is
miraculously revived to accompany the heroine into the sunset.

This week we look at more words from the world of literature.       -Anu

P.S. I'll be in Oahu, Maui & Hawaii Islands and away from my email during
Nov 23 - Dec 2. AWAD will continue, however, there will be no AWADmail.

.............................................................................
I do not know whether I was then a man dreaming I was a butterfly, or whether
I am now a butterfly dreaming I am a man. -Chuang Tzu, mystic and philosopher
(c. 4th century BC)

Q: Some time ago you featured a quote/word about x in AWAD. Could you resend
it?
A: You may search the archives at http://wordsmith.org/awad/search.html
   or browse them at http://wordsmith.org/awad/archives.html All the
   words and quotes since the beginning of AWAD are available there.

Pronunciation:
http://wordsmith.org/words/deus_ex_machina.wav
http://wordsmith.org/words/deus_ex_machina.ram


-----Original Message-----
From: Gray, Barbara N.
Sent: Thursday, October 25, 2001 3:31 PM
To: Koehler, Anne C.; Cook, Mary; Shackleton, Sara; Taylor, Mark E (Legal); Sayre, Frank; Hendry, Brent
Subject: FW: Texas Monthly (November 2001): How Enron Blew It

FYI
-----Original Message-----
From: Lees, Lisa
Sent: Thursday, October 25, 2001 3:05 PM
To: Gray, Barbara N.
Subject: FW: Texas Monthly (November 2001): How Enron Blew It

-----Original Message-----
From: Denny, Jennifer
Sent: Wednesday, October 24, 2001 1:43 PM
To: Lees, Lisa
Subject: FW: Texas Monthly (November 2001): How Enron Blew It

-----Original Message-----
From: Puthigai, Savita
Sent: Wed 10/24/2001 11:11 AM
To: Engel, Thomas; Denny, Jennifer
Cc:
Subject: FW: Texas Monthly (November 2001): How Enron Blew It

 -----Original Message-----
From:   McKinney, Lara
Sent:   Wednesday, October 24, 2001 8:43 AM
To:     Enron London - EOL Product Control Group; Puthigai, Savita
Subject:        FW: Texas Monthly (November 2001): How Enron Blew It

FYI - it is a good article

 -----Original Message-----
From:   Connelly, Angela
Sent:   24 October 2001 10:59
To:     McKinney, Lara
Subject:        FW: Texas Monthly (November 2001): How Enron Blew It

This is a long one - but definitely worth reading.

Cover title: Enron's Cutthroat Culture
*******************************************************************************************************************************************************************

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 < <http://www.texasmonthly.com/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."


oh shit you are saying that i have a crush on you?  i am finally catching on.  don't make me come down there and kick your butt!

 -----Original Message-----
From: 	Maggi, Mike
Sent:	Friday, October 26, 2001 3:23 PM
To:	Nelson, Michelle
Subject:	RE:

just admit it

 -----Original Message-----
From: 	Nelson, Michelle
Sent:	Friday, October 26, 2001 3:22 PM
To:	Maggi, Mike
Subject:	RE:

on yourself?

 -----Original Message-----
From: 	Maggi, Mike
Sent:	Friday, October 26, 2001 3:21 PM
To:	Nelson, Michelle
Subject:	RE:

ok a crush

 -----Original Message-----
From: 	Nelson, Michelle
Sent:	Friday, October 26, 2001 3:21 PM
To:	Maggi, Mike
Subject:	RE:

what's an infatuation?  you being a brat?  that will never pass

 -----Original Message-----
From: 	Maggi, Mike
Sent:	Friday, October 26, 2001 3:20 PM
To:	Nelson, Michelle
Subject:	RE:

dont worry it is probably just an infatuation that will pass

 -----Original Message-----
From: 	Nelson, Michelle
Sent:	Friday, October 26, 2001 3:19 PM
To:	Maggi, Mike
Subject:	RE:

that makes you an eve bigger brat.

 -----Original Message-----
From: 	Maggi, Mike
Sent:	Friday, October 26, 2001 3:18 PM
To:	Nelson, Michelle
Subject:	RE:

I know

 -----Original Message-----
From: 	Nelson, Michelle
Sent:	Friday, October 26, 2001 3:18 PM
To:	Maggi, Mike
Subject:	RE:

YOU ARE A BRAT!!!!

 -----Original Message-----
From: 	Maggi, Mike
Sent:	Friday, October 26, 2001 3:17 PM
To:	Nelson, Michelle
Subject:	RE:

whatever, ok if thats what you want me to believe

 -----Original Message-----
From: 	Nelson, Michelle
Sent:	Friday, October 26, 2001 3:16 PM
To:	Maggi, Mike
Subject:	RE:

quit flattering yourself.  it was a male looking at you and he told me!  how do you feel about that?

 -----Original Message-----
From: 	Maggi, Mike
Sent:	Friday, October 26, 2001 3:16 PM
To:	Nelson, Michelle
Subject:	RE:

stop lying, you dont have to be embarrased, I understand

 -----Original Message-----
From: 	Nelson, Michelle
Sent:	Friday, October 26, 2001 3:15 PM
To:	Maggi, Mike
Subject:	RE:

then i guess it is a fact that a male was staring at you.

i am laughing so hard!!!! :)

 -----Original Message-----
From: 	Maggi, Mike
Sent:	Friday, October 26, 2001 3:13 PM
To:	Nelson, Michelle
Subject:	RE:

I wasnt accusing you I was just stating a fact

 -----Original Message-----
From: 	Nelson, Michelle
Sent:	Friday, October 26, 2001 3:13 PM
To:	Maggi, Mike
Subject:	RE:

i can't tell because then you would acuse them of staring at you too.

 -----Original Message-----
From: 	Maggi, Mike
Sent:	Friday, October 26, 2001 3:11 PM
To:	Nelson, Michelle
Subject:	RE:

no I dont know how it works, and who told you

 -----Original Message-----
From: 	Nelson, Michelle
Sent:	Friday, October 26, 2001 3:10 PM
To:	Maggi, Mike
Subject:	RE:

don't you have messenger

 -----Original Message-----
From: 	Maggi, Mike
Sent:	Friday, October 26, 2001 3:09 PM
To:	Nelson, Michelle
Subject:	RE:

nobody told you, dont lie

 -----Original Message-----
From: 	Nelson, Michelle
Sent:	Friday, October 26, 2001 3:08 PM
To:	Maggi, Mike
Subject:	RE:

damn you caught me.  and for your information, i didn't notice it...someone told me about it!  so whatever to you mr. allergy man!!!

 -----Original Message-----
From: 	Maggi, Mike
Sent:	Friday, October 26, 2001 3:07 PM
To:	Nelson, Michelle
Subject:

if you werent always staring at me you wouldnt notice my eyes


Please note on your calendars we have changed the Paralegal Luncheon from Thursday's to Wednesday's, starting on Wed., Oct. 24, 2001 from 11:45 a.m. - 1:00 p.m.

Esmeralda Gonzalez
Enron North America Corp. - Legal
1400 Smith Street, EB3815
Houston, Texas 77002
E-mail: Esmeralda.Gonzalez@enron.com
Phone: 713.345.7621
Fax: 713.646.3393


Tana when you have a  chance could you do me a favor and go to
www.contractor.com and do a search for  contractor by name then enter my name
and then my company name will come up and  then click on the link to rate
this contractor. Then fill out the form and rate  your favorite contractor
and of course you must give me high  marks.
?
How are you  doing?
?
Louis


Carol St. Clair
EB 3889
713-853-3989 (Phone)
713-646-3393 (Fax)
carol.st.clair@enron.com
----- Forwarded by Carol St Clair/HOU/ECT on 04/11/2001 01:41 PM -----

	Julia Murray
	04/11/2001 12:57 PM

		 To: Dan Lyons/HOU/ECT@ECT, Peter del Vecchio/HOU/ECT@ECT, Lou
Stoler/HOU/ECT@ECT, Harry M Collins/HOU/ECT@ECT, Carol St Clair/HOU/ECT@ECT,
Deb Korkmas/HOU/ECT@ECT, Michelle Cash/HOU/ECT@ECT
		 cc:
		 Subject: Hawaii Presentation

fyi

Julia Heintz Murray
Enron Wholesale Services
Enron Industrial Markets LLC
1400 Smith Street, EB3838
Houston, TX  77002
(713) 853-4794
Fax:  (713) 646-3393
julia.murray@enron.com

----- Forwarded by Julia Murray/HOU/ECT on 04/11/2001 12:56 PM -----

	Darlene C Forsyth/ENRON@enronXgate
	04/11/2001 08:23 AM

		 To: AnnMarie Tiller/ENRON@enronXgate, Brent Vasconcellos/ENRON@enronXgate,
Danny Wilson/ENRON@enronXgate, David C Williams/ENRON@enronXgate, James
Sandt/ENRON@enronXgate, Vicki Sharp/HOU/EES@EES, Kristina Mordaunt/Enron
Communications@Enron Communications, Travis McCullough/HOU/ECT@ECT, Alan
Aronowitz/HOU/ECT@ECT, Julia Murray/HOU/ECT@ECT, Lance
Schuler-Legal/HOU/ECT@ECT, Daniel R
Rogers/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Alan Quaintance
Jr/ENRON@enronXgate
		 cc: davidbarbour@akllp.com@SMTP@enronXgate, Charles Delacey/HOU/ECT@ECT,
Gareth Bahlmann/ENRON@enronXgate, Ryan Siurek/Corp/Enron@ENRON, Bill
Bowes/ENRON@enronXgate, Jordan Mintz/ENRON@enronXgate, Barry
Schnapper/Corp/Enron@Enron, Leslie Linares/ENRON@enronXgate
		 Subject: Hawaii Presentation

David Barbour, Andrews & Kurth, with the assistance of Enron representatives
from Global Finance Commercial, Legal, Accounting, and Tax, will make a
presentation on the Hawaii 125/140 Structure on Monday, April 30th, from
11:30 - 1:00, in EB 30C1.

Please feel free to extend an invitation to whomever in your Group who may
benefit from this presentation.

Please RSVP to Leslie Linares at x 57730 or by email, by Thursday, April 27,
as lunch will be served.

Thanks,
Darlene


There should be a clean copy of the Agreement in the file.  We blacklined it
against the existing agreement with Weyerhaeuser Company Limited and such
blackline is also in the file.  If there is not a clean copy of the new
agreement, let me know and I'll print out another one.

From: Sara Shackleton@ECT on 02/12/2001 10:40 AM
To: Stephanie Panus/NA/Enron@Enron
cc:

Subject: Weyerhaeuser Co.

Stephanie:  The fax that you gave to me with this file states that the CP
wants to change jurisdiction "back to New York."  I don't see a prior draft;
only a blackline against a Weyerhaeuser Company LImited document, the latter
ISDA having been executed in June, 2000.  Does his question refer to that
executed master?
If so, please let me know what we agreed to.  Thanks.

Sara Shackleton
Enron North America Corp.
1400 Smith Street, EB 3801a
Houston, Texas  77002
713-853-5620 (phone)
713-646-3490 (fax)
sara.shackleton@enron.com