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

New at Meridien Research for October 24, 2001

1. Online Mortgages: Appraising the Options
2. Electronic Invoice Presentment and Payment: The Key to Lockbox
3. Invest in Wireless Payments

Registered clients can access research directly. If you are a client but are not registered, or if you are a guest, please visit our Web site to register for a user name and a password.
http://www.meridien-research.com/

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Latest Findings from Meridien:

1. Online Mortgages: Appraising the Options
(Retail e-Financial Services Client Access)
http://www.meridien-research.com/doc.asp?docid=799

For most individuals, a mortgage is likely to be the largest loan they ever incur. For this reason, it is not hard to imagine why, to date, many mortgage seekers have hesitated to use the Internet as a channel for loan origination. Concerns about the validity of data, use of a new technology, and security contribute to this hesitancy. However, with mortgage interest rates near 30-year lows and consumers refinancing existing mortgages at high levels, the current economic conditions have created a positive environment for online mortgage lending to flourish. This report describes four potential business models a financial institution may adopt when implementing its own Internet strategy for mortgage lending.

2. Electronic Invoice Presentment and Payment: The Key to Lockbox
(Wholesale e-Financial Services access)
(e-Payments Client access)
http://www.meridien-research.com/doc.asp?docid=800

Banks have traditionally handled the collection and processing of remittance information and payments for their corporate customers through physical lockbox facilities. Corporations, however, are increasingly moving their payment function online. In the process, they are losing the paper-bound connection of payment to remittance; now they are looking for ways to keep their collection information integrated with their billing information. Electronic invoice presentment and payment (EIPP) is one solution to their problem, and it brings both challenges and opportunities to banks. While EIPP does threaten the lockbox revenues of banks, it offers them the means to expand their involvement in their customers' payment and collection processes by completing the invoice-payment-remittance-settlement cycle. This report explores the roles that exist for banks in the EIPP space and the strategies they can employ as they look for ways to continue serving their corporate customers.

3. Invest in Wireless Payments
A Meridien/FSTC report (Meridien clients - all services - only)
http://www.meridien-research.com/misc/fstc/invest_in_wireless_payments.asp
Financial institutions and mobile telecommunications firms in Europe and Asia are already introducing wireless payment capability. We see opportunities in the United States as well for financial institutions and telcos to work together to develop wireless payment solutions that can both meet corporate goals and address the structural issues existing in the American wireless environment. Telcos are now urgently assessing strategies to attain profitability; wireless payments are a key element to meet that goal. Financial institutions that act quickly can participate as new wireless payment capabilities are developed, thereby ensuring that solutions also meet the needs of their industry and their customers.

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Are you going to this event this weekend.

BT


I know Mike asked you for the 10 biggest P&L deals that we could look to restructure, but I'd like to see as many as possible be business unit.  In addition, I'd like to see as many as possible (or that make sense) from crude and products.  Get with Rob Fuller on this.

Jeff


Sheila,

If I were starting over again, there are a few things I would change.  First,
the development fee as presented in this draft doesn't work.  Second, I would
put all the put/call details in the llc agreement.  Third, I would make the
put/call available anytime GE agreed to it.  The development fee has been
discussed generally, but not fully vetted with Herman.

Kay


Kaye:  I need for you to redline the first attached doc.  I have the markup
in my office.  I need to email it tonight. Thanks.  Sara
----- Forwarded by Sara Shackleton/HOU/ECT on 11/16/2000 01:21 PM -----

	Treasa Kirby
	11/16/2000 05:13 AM

		 To: Stephen Jacobson/EU/Enron@Enron, Matthew Landy/OSL/ECT@ECT, Kim S
Theriot/HOU/ECT@ECT, Sara Shackleton/HOU/ECT@ECT, Rod Nelson/LON/ECT@ECT,
Chris Glaas/LON/ECT@ECT, Marcus Von Bock Und Polach/LON/ECT@ECT
		 cc:
		 Subject:

Please find attached draft confirmations for the Corp Prepay.

Regards

Treasa
---------------------- Forwarded by Treasa Kirby/LON/ECT on 16/11/2000 11:12
---------------------------

akeros@tdsec.co.uk on 16/11/2000 10:36:29
To: tkirby@enron.com
cc: francg2@tdsec.co.uk, fulles2@tdsec.co.uk

Subject:

(See attached file: Enron.doc)(See attached file: Enron2.doc)(See attached
file:
Mscg.doc)

Treasa

Please find attached Draft Confirmations showing indicative terms.

Please note that trade size, pricing and maturity are still subject to
internal
approve and the issue concerning our ability to successful net credit
protection
with this transaction still has to be resolved before we will be in a position
to trade.

Please let me know if you have further questions.

I'll speak to you later today

Regards Shane
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This e-mail and the information it contains may be confidential and is for the
intended addressee(s) only. If you have received it in error, please do not
disclose the contents to anyone. Notify the sender immediately and delete the
transmission from your files. If you are not the intended addressee, any
review,
distribution, copying or use of this information is strictly prohibited and
may
be unlawful.  We do not guarantee the accuracy or completeness of this
communication, expression of views or recommendations, save and except for the
benefit of the intended addressee(s) and subject to the terms of any other
documentation with the intended addressee(s).
------------------------------------------------------------------------------

 - Enron.doc
 - Enron2.doc
 - Mscg.doc


Natsource is right - it's been changed to 263.00

Kate

Stephanie Piwetz   02/23/2001 12:28 PM

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

Subject: deal 530376.01

Kate,
please check price
530376.01  Swerzbin
Enron Sells Wesco
June
Pv  25 mws

we have price 260.00
natsource has 263.00
Thanks


After further reflection, I do not think I am the right person to call David
Boies. Can you assign the task to another person?

	"Howard J. Weg" <hweg@pgwlaw.com>
	05/16/2001 11:06 PM

		 To: "'Alan Yudkowsky'" <AYUDKOWSKY@stroock.com>,
<richard.b.sanders@enron.com>, <pmar@mofo.com>
		 cc:
		 Subject: RE: CalPX Participants Committee-Commandeering Litigation

Alan, can you ask Marshall Grossman if he is available to make a
presentation on May 24 at about 230 pm at the Greenberg offices following
the general Committee meeting that will start at 1 pm?  I will ask the
Greenberg firm to be ready at about 330 pm.  Richard, could you ask the
Quinn Emmanuel firm to be ready at about 430 pm.  Let them know that the
schedule might slip to some extent.

The other possible candidates that I have heard about are the Susman Godfrey
firm, the Kaye Scholer firm (although I am waiting to see a preliminary
resume to share with the Subcommittee to decide if we want to see them) and
David Boise (spelling? the attorney that represent Al Gore in the ballot
dispute).  Richard, you are going to call the Susman and Boise firms to see
if they are interested.  I am going to talk to the Kaye Scholer people to
see if they make sense to consider.

Are there any other candidates we should talk to?

I am traveling Thursday and Friday and will not be able to review my emails.
Please leave me voicemails at 310/203-2903.  Thanks.


I heard back from ABB this morning.  Karla Hesketh (ABB) is checking to see
if any comments came in on the Assignment and Assumption Agreement.  We
should have the GE ready to go if , according to Dale, Rose and Lisa's Global
Finance comments are in.  Lee Johnson has said he is ready to go to the
office and sign for GE.

In the realm of a checklist that I am tracking for Jim Gilbert on the EPC
contract owner required information being ready to go, these 2 documents
(E-Next B/O Contracts for LVCII on both ABB and GE; same for the Assignment
and Assumption Agreements) are the keys to meeting our obligations.  All
other requirements are in place and on hold pending the trigger being pulled
on the tolling agreement and subsequent dash approval.

I am trying to coordinate for Dale as he is still in Denver, under sleep
deprivation.  Let me know how  I can help.

Regards

Bill W.
503-464-8958
503-704-9801 (cell)


I think this will change a bit, but it gives you some history.


Paul:

  With respect to Valentis:

 (a)  Does the MAC apply to both S&P and Moody's?  (not clear from worksheet)
 (b)  Are the financial covenants Events of Default or Termination Events?
(looks like these were Termination Events in AIG)
 (c)  Is this deal two-way margining?  You have set 0 Thresholds but
indicated Return/Delivery for both parties.  Our discussion of last week may
have changed (we discussed one-way margining for CP only).

I'll have the same questions for CD Holdings.

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


The request has been completed with all resources requested either completed
or rejected. You can view the details of the  request by clicking
http://itcapps.corp.enron.com/srrs/auth/emailLink.asp?ID=000000000024480&Page=
MyReq.


CALENDAR ENTRY:	REMINDER

Description:
	Vacation - Comp Day 2

Date:		2/22/2001
Time:		8:00 AM (Central Standard Time)

Chairperson:	Stacey W White

Detailed Description:


fyi

-----Original Message-----
From: Scott Prophit [mailto:SDProphit@duke-energy.com]
Sent: Friday, February 15, 2002 4:01 PM
To: Barbe, Robin; Concannon, Ruth
Subject:

Pursuant to your request, I would like to submit a bid on behalf of Duke
Energy Marketing and Trade for the following capacity package:

Pipe Line:          Iroquois Gas Transmission

Path           Waddington to South Comack

Volume              2,017 dth

Start Date:         March 1, 2002 (or as soon as practicable)

End Date:      October 31, 2006 (or the end of the contract)

Daily Rate:         $0.15 per dth

Monthly Rate:       $4.5625 per dth

Please accept this bid an indication as to our bid for this capacity.  It
is my understanding that this is a non-binding bid and Duke Energy reserves
the right to refresh its bid rate or bid term in the event that Enron would
like to negotiate further on the subject.

Sincerely,
Scott Prophit
Director of Northeast Transportation
713-989-0738


We will need this, so I am sending it to you as well.  --sally
---------------------- Forwarded by Sally Beck/HOU/ECT on 09/11/2000 01:40 PM
---------------------------

Albernita Travis@ENRON
09/11/2000 12:58 PM
To: Sally Beck/HOU/ECT@ECT
cc: Daniel Muschar/AA/Corp/Enron@ENRON
Subject: AirCard Activation

Hi  Sally -

Here is the IP Address you requested, to be used with your AirCard(s).

Sally Beck -   EID# 00-A0-D5-01-33-45     IP Address: 166.149.3.64

**A Change control request was submitted today, cards should be active by
tomorrow afternoon.

Thank You !

Albernita Travis
Enron - I.T. Sourcing & Procurement
(713) 345-6255


Content-Transfer-Encoding: quoted-printable
Date: Thu, 22 Mar 2001 17:36:36 -0600
From: "Tracey Bradley" <tbradley@bracepatt.com>
Cc: "Aryeh Fishman" <afishman@bracepatt.com>, "Andrea Settanni"
<asettanni@bracepatt.com>, "Charles Ingebretson"
<cingebretson@bracepatt.com>, "Charles Shoneman" <cshoneman@bracepatt.com>,
"Deanna King" <dking@bracepatt.com>, "Jeffrey Watkiss"
<dwatkiss@bracepatt.com>, "Gene Godley" <ggodley@bracepatt.com>, "Kimberly
Curry" <kcurry@bracepatt.com>, "Michael Pate" <mpate@bracepatt.com>, "Paul
Fox" <pfox@bracepatt.com>, "Ronald Carroll" <rcarroll@bracepatt.com>
Subject: House Energy Subcommittee May Propose CA Emergency Options
Mime-Version: 1.0
Content-Type: text/plain; charset=US-ASCII
Content-Disposition: inline

This was published in Electric Power Alert's PowerPlus Service
------------------------------------------------------------------------------
--

House Energy Subcommittee May Propose CA Emergency Options

House Energy and Air Quality Subcommittee Chairman Joe Barton (R-TX) is
predicting an emergency energy bill for California may be presented early
next week to mitigate the state's power crisis through the summer. Among the
hotly debated topics that may appear in a compromise bill were wholesale
price caps, the possibility of granting federal regulators authority to site
new power generation and transmission, mandatory demand side mitigation, and
the removal of retail price caps for ratepayers.

While the state faced a second straight day of rolling blackouts,
subcommittee members quizzed the three Federal Energy Regulatory
Commissioners March 20 about the California situation. According to Barton,
at Republican leadership meetings taking place at the same time, the
California crisis was at the top of the agenda. Barton said he plans to
discuss possible legislation with Subcommittee Ranking Member Rick Boucher
(D-VA) after another panel is heard on March 22, and ideas will be considered
over the weekend. But while he said it remains unclear whether anything will
be presented, uncertain, time was of the essence -- he insisted that
proposals would have to be introduced early next week. The remarks are
another sign that the enormity of this summer's potential crisis is sinking
in with legislators.

There seemed to be an uneasy acceptance during the hearing that California
will inevitably come up short by several thousand megawatts this summer, and
the need for unpleasant temporary mitigation measures has become urgent. Last
week, in the Senate, Senator Gordon Smith (R-OR) offered a compromise with
Sen. Dianne Feinstein (D-CA) in which he would accept temporary price caps as
long as the state abandoned its steadfast refusal to pass wholesale rates
onto consumers.

One of the more surprising suggestions came from Commissioner Linda Breathitt
(D), who has been the most reserved FERC member throughout the crisis. She
suggested that FERC's role in siting new transmission and generation
facilities ought to be reconsidered.

"Under the Federal Power Act, the commission has no role in the permitting
and siting of these new facilities," she said in her prepared statement. "I
am beginning to believe this may need to be changed. FERC may need to have a
greater role in the siting of new infrastructure, because shortages of
generation and transmission likely will no longer be just single state
issues. I believe these shortages could become interstate commerce issues
that must be addressed by the Federal government."

In a frank exchange with Barton, the Commissioners all seemed in varying
degrees amenable to the idea. "I think it is an intriguing idea," said
Commissioner William Massey (D). FERC Chairman Curt Hebert (R) seemed
cautiously approving of the idea, but only after noting that siting is done
by the states for very good reasons. He warned not to "hardwire it," and
acknowledged "some sort of one-stop shopping is a good idea." While Breathitt
asked for Congressional authority for siting, Barton wondered about some
measure that would give the state a time limit to do its own permitting
before stepping in. But he added that something probably needs to happen. "I
think it is the federal role to step in temporarily," he said.

Among the more contentious issues raised was temporary wholesale price caps.
Arguing that FERC needed "to call a time out from this broken western
electricity market," Commissioner Massey called for such caps calculated on a
generator-by-generator basis with a $25 per megawatt addition, a firm sunset
provision, and an exemption for new generation. He argued that without such
protection during a grueling summer, a voter backlash could emerge and
threaten the entire concept of electric competition in the region.

But the Subcommittee seemed decidedly hostile to the idea. Indeed, several
Republican members pointed out throughout the debate that FERC only has
ratemaking jurisdiction over 47 percent of the western market, which would
limit their effectiveness. Additionally, many expressed the concern that it
would effectively cut off potential power imports from Mexico and Canada.

It also appears increasingly unlikely FERC would put any such authority into
use. Hebert, as he did before a Senate committee the previous week, warned
that price caps have a dubious history, and added that they provide "no
incentive to move into the forward market."

Breathitt also hesitated, suggesting that other options should be pursued
first, and that price caps would only work if state regulators approved and
public power authorities could be brought into the scheme.

Democratic Subcommittee members grilled the Commissioners about their recent
refund orders for January and February that were calculated from proxy market
prices. Boucher wanted to know why findings of "unjust and unreasonable"
prices were limited to Stage 3 emergencies. "We deserve a more complete
answer," he said. Hebert argued that to investigate further would stray
outside their jurisdiction as set out by last year's California orders, and
that the Commission did a thorough job of examining a wide range of
transactions. In dissenting from this view, Massey expressed concern that
FERC was limiting its scope, particularly in light of evidence from the
state's own market monitors and scholars that market power abuse was likely.

Rep. Mary Bono (R-CA) applauded FERC's recent efforts. "While I believe that
wholesale price caps are not beneficial for our long-term needs," she said.
"I do believe, and further encourage, FERC to exercise its authority to call
into question wholesale rates."

Rep. Edward Markey (D-MA) insisted that possible market gaming was
detrimental to everyone. "Markets are built on public confidence," he said.
"And right now the public has little reason to have confidence in the
dysfunctional market that has been permitted to develop in California." He
pressured the Commissioners to consider investigations of other companies
under section 206 of the Federal Power Act, beyond the recently announced
investigations into Williams Energy and AES. Some GOP members criticized the
Democratic fervor to paint generators as unethical profiteers.

Rep. Steve Largent (R-OK), who represents Williams' home state, raised doubts
about the validity of any such investigation. He demanded to know how exactly
FERC established just and reasonable rates. When the Commissioners failed to
present a satisfactory answer, he complained, "how can you hold someone
accountable to a standard you don't know?" and suggested the investigation
was "unconstitutional."


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I really love you.  I can't wait to be with you this weekend.  I bet you are glad you listened to me and did not buy any Enron stock at $21, considering it is at $18 today!!!

Love you,

Tracy


Dear brad,  The Washington bureau will have a full plate when we return from Thanksgiving break.  Congress returns with many lawmakers urging action on energy legislation before the end of the year.  Washington Bureau Chief Peter Cook says there's a long list of legislation ahead of energy in the Democrat-controlled Senate, but Republicans are threatening to force a vote through a filibuster.  In turn, Democrats are saying they'll filibuster any energy bill containing a provision to open Alaska's Arctic National Wildlife Refuge to drilling.  The legislation battle continues next week.   Peter also says the Washington bureau will continue to follow the FERC's major decisions regarding how it assesses market power.  The Commission announced a major change this week that will impact many of the large and small utilities across the country.   Also next week, we'll see what Energy Daily Publisher Llewellyn King has to say about Pat Wood's performance as Chairman of the FERC.  And rumors are flying about DOE Secretary Spencer Abraham - on Monday, King talks about the whispers he's hearing in Washington.   ENL's Gale Smith will have a report from the Houston bureau next week on a Louisiana company that uses rice hulls to create power.  Agrilectric Incorporated consumes some of this power, but most of the electricity is sold to an area utility company.  We'll have details next week.   Also, Houston Correspondent Kim Benestante will bring us coverage from the Alaska Resources Conference taking place next Thursday and Friday.  We'll also bring you details on the final report regarding the chosen route of the Arctic natural gas pipeline.  The report is due to Alaska's Governor on November 30.   We'll hear from Center for Energy Efficiency and Renewable Technologies Executive Director John White next week.  ENL's Kym McNicholas will speak with White about his organization's opposition to the state's long-term power contracts.  Catch White from the West Coast bureau next week.   Closing Prices for Nov. 21, 2001:   Crude: $18.96       Unleaded: $0.5273   Heating Oil: $0.5342   Natural Gas: $2.813    Keep in mind things are subject to change at a moment's notice. Occasionally guests have to cancel or change time slots.  We'll continue to do our best to keep you updated on future interviews and events. Have a great Thanksgiving break!  We'll see you on Monday.   Be sure to watch our newscasts every business day - 9 a.m. to 5 p.m. ET, at the top of each hour.

	 	Jay Rickerts, EnergyNewsLive.com Anchor  View today's Energy Wrap Video Windows Media Player: 56K  |  100K  |  300K  Real Player: 56K  |  100K  |  300K  (Requires Windows Media Player or Real Player )   Experience all that Williams Energy News Live has to offer!   If you are receiving this letter for the first time and wish to continue, subscribe now    To stop receiving this letter, unsubscribe now    If you are having trouble receiving this e-mail, please let us know  or  call (800) WILLIAMS (800-945-5426) weekdays, 7am-7pm CST.    Comments? Suggestions? Let us  know  or  call (800) WILLIAMS (800-945-5426) weekdays, 7am-7pm CST.    Copyright 2001 Williams Energy News Live, LLC. All  Rights Reserved.


Hey Chris,

I was wondering if there was a fax number at the base so that my apartment
complex can send you some info.  regarding getting your name taken off of our
lease.  If there is, just shoot me off an email with the number and I'll pass
it along to them.

Hope things are going well and that you're not too homesick with Thanksgiving
and all.  I have a feeling I will be talking to you guys tomorrow along with
both of our parents and extended family members.  Have a great holiday and
root on the Horns ( I think this is going to be a tough one).

Love,
Susan


Enron Global Strategic Sourcing (GSS) has entered into an agreement to
utilize United Parcel Service (UPS) as Enron,s preferred carrier for package
delivery.  Through the new agreement, GSS has been able to leverage existing
package delivery spend from all Enron business units worldwide in order to
achieve more aggressive pricing discounts.  Effective immediately, all Enron
business units will be able to realize savings by utilizing the new agreement.

In the next couple weeks, GSS will be distributing more detailed information
regarding additional shipping options, training schedules and package
tracking capabilities available from your desktop. In the meantime, employees
and/or locations who currently utilize &Package and Ship Requests8 may
continue to do so.  Please provide all required information, including RC and
Company Number and identify UPS as the requested carrier.  Other office
locations should continue using their existing procedures, utilizing UPS
whenever possible, to obtain the discounted pricing.

If you have questions or comments about the new agreement, please contact
Randy Lagrimini, GSS contract manager at 713-646-7366 or Verna Molandes, UPS
preferred customer associate at 281-847-6769 or 1-800-432-2877.


I updated the June transport usage tickets today through HPL, and will be
finishing these tickets tomorrow.  Rates have been updated to reflect current
matrix rates and all baseload rates that I know of at this time.  I have not
yet received third party transport rates, so if you know of any, please let
me know.  Also, I have zeroed out some volumes on some tickets for June, so
your schedulers will have to update volumes as they know them.  Rule of thumb
was that if I had to add a month, I refreshed the rate but left volume at
zero.  If the months were already on the ticket, then I refreshed the rate
and left the volume as is.

I would advise that your schedulers check volumes on all pipes to ensure
they're reflected in Position Manager correctly.  Please let me know if you
have any questions.  All pipes will be updated by tomorrow morning.

Heidi


USA: Enron disclosed insider data to some investors-NYT.
Reuters English News Service, 01/25/2002

Enron may get new boss
Houston Chronicle, 01/25/2002

Enron's new CEO could could be savior or victim
Associated Press Newswires, 01/25/2002

Lay's exit prompts mixed reactions
Houston Chronicle, 01/25/2002

Ex-staffers say Enron division inflated profits
Chicago Tribune, 01/25/2002

Jesse Jackson To Hold Enron Rally Today
KPRC Channel 2 Houston, 01/25/2002

Enron's fall piques Congress' interest in 401(k) rules
Chicago Tribune, 01/25/2002

Enron: The Fallout
The history of a head-spinning conglomerate: Wall Street darling: Enron trader was an unregulated commodities exchange
National Post, 01/25/2002

Following The Paper Trail In The Enron-Andersen Scandal
Dow Jones Energy Service, 01/25/2002

Developments related to the Enron collapse and investigation
Associated Press Newswires, 01/25/2002

First Day of Document Shredding Probe Gives Few Answers
CNN: Live at Daybreak, 01/25/2002

Enron's Australian Unit Faces Being Placed in Liquidation
Dow Jones Business News, 01/25/2002

Enron case already leads to several book deals
Associated Press Newswires, 01/25/2002

Charities planning to carry on without the benefit of Enron's philanthropic giving
Associated Press Newswires, 01/25/2002

The Enron debacle How could it have happened? What should be done? What lessons should be learned? What you're saying READER'S SOUND OFF Take stock of Enron's fall SMOKE AND MIRRORS
Orlando Sentinel, 01/25/2002

Friday Forum This week's topic: The Enron debacle How could it have happened? What should be done? What lessons should be learned? What you're saying READER'S SOUND OFF Take stock of Enron's fall WORDS TO THE WISE
Orlando Sentinel, 01/25/2002

___________________________________________________________

USA: Enron disclosed insider data to some investors-NYT.

01/25/2002
Reuters English News Service
(C) Reuters Limited 2002.

NEW YORK, Jan 25 (Reuters) - Enron Corp. executives enticed wealthy investors in one of the partnerships that helped wreck the company with the prospect that inside knowledge could help double their money in months, the online edition of the New York Times reported on Friday.
Confidential records of an Enron partnership called LJM2 show company executives offering potential investors inside knowledge about Enron and its off-the-books holdings, information that they denied company shareholders, the Times said.
Neither Enron nor Merrill Lynch and Co. Inc. , which underwrote the LJM2 offering, were immediately available to comment on the story.
Dozens of banks, brokerage firms, pension funds and institutional investors were approached to invest in LJM2 just over two years ago, and all were provided with the confidential data about the extent of Enron's off-balance-sheet dealings, but could not share the information with their brokerage clients, according to the Times.
The LJM2 partnership was set up, in part, to invest in entities that Enron controlled and to purchase investments that Enron did not want on its books, the Times said.
"Enron frequently has access to investment opportunities that are not available to other investors," the Times quotes the private placement memorandum for LJM2.

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.

Enron may get new boss
Candidate talking with directors, creditors
By DAVID IVANOVICH
Copyright 2002 Houston Chronicle
Jan. 25, 2002, 1:43AM
WASHINGTON -- A candidate tapped by Enron's board of directors and largest creditors to assume the company's helm will meet with Enron managers as early as today.
Moving quickly to fill the void left after the departure of Chairman Ken Lay, the board and creditors committee were known to be talking with Stephen Cooper, managing principal at Zolfo Cooper, a New York-based corporate-recovery and crisis-management firm.
Cooper served as chief restructuring officer at Ontario-based Laidlaw Inc., the largest ground transportation company in North America and owner of Greyhound Lines.
Previously, Cooper was a partner in the accounting firm Touche Ross & Co.
Cooper could not be reached for immediate comment Thursday night. And Martin Bienenstock, an attorney with Weil, Gotshal & Manges representing Enron in its bankruptcy case, declined to say whether Cooper is indeed the front-runner for the job.
Whether he actually gets the job will depend on how the meetings with Enron's remaining executives go today, Bienenstock said.
Corporate turnaround experts say Enron will need an executive with enough credibility to stem the scandals swirling around the company and stave off an effort to persuade U.S. Bankruptcy Court Judge Arthur Gonzalez to order the appointment of a trustee to run the company.
"A Rudy Guiliani, that's what's called for, somebody of that stature," said one corporate restructuring expert who asked not to be named. "Or a George Mitchell."
Guiliani, the former mayor of New York, drew high marks for his leadership in the wake of the terrorist attacks on the World Trade Center. Mitchell, a former senator from Maine, helped negotiate a peace accord in Northern Ireland.
While not identifying the individual, Bienenstock called the board and creditor committee's candidate "a very, very solid citizen."
Cooper is not well-known in Houston's energy sector.
"Understanding Greyhound is a lot different from understanding Enron," said one energy industry observer. "The energy industry is many times more complex, and the Enron version of that is even more complex."
Carol Coale, a Houston-based natural gas analyst at Prudential Securities, doesn't think the search for a new boss at Enron should range outside the energy industry.
"The energy industry is diverse enough where you could find the right person that has knowledge of energy," Coale said. "I don't see what the advantages are of going outside."
John Olson, an energy analyst with Sanders Morris Harris in Houston, was not surprised Enron's board and creditors were shopping outside the sector.
"What you need is somebody who has been totally removed," Olson said. The company's new turnaround expert needs to be a "debt management guy who can restructure the debt and who also knows all about the derivatives books, which clearly requires some expertise in voodoo."
Lay, whose name for years has been synonymous with the staid natural gas pipeline company he transformed into an energy and trading powerhouse, stepped down late Wednesday at the creditors' urging.
"I want to see Enron survive, and for that to happen we need someone at the helm who can focus 100 percent of his efforts on reorganizing the company," Lay said. "Unfortunately, with the multiple inquiries and investigations that currently require much of my time, it is becoming increasingly difficult to concentrate fully on what is most important to Enron stakeholders."
The creditors' committee, in a prepared statement, said it was pleased by Lay's exit. "This is a step in the right direction, to maximize value for all creditors," it said. "The committee is also encouraged that Enron is proceeding with the retention of a chief restructuring officer."
By naming a chief restructuring officer, Enron's board and creditors clearly are hoping to head off the appointment of a trustee.
Trustees traditionally are known for breaking up rather than resuscitating debt-laden companies. A trustee also would call all the shots at the company, superseding the role of the board and the company management.
A group of Enron creditors, led by Dallas-based Wiser Oil Co., are pushing for just such an appointment.
To persuade a bankruptcy court to name a trustee, Wiser and its allies would have to find enough evidence to demonstrate fraud, mismanagement or incompetence.

Enron's new CEO could could be savior or victim
By KRISTEN HAYS
Associated Press Writer

01/25/2002
Associated Press Newswires
Copyright 2002. The Associated Press. All Rights Reserved.

HOUSTON (AP) - Kenneth Lay's successor as Enron Corp.'s chief executive could be the hero who saves the bankrupt energy giant or a well-intentioned outsider blindsided by yet-unseen punches.
"In a sense, it provides a big showcase for your talents," said Henry T.C. Hu, a corporate law professor at the University of Texas. "Presumably you could think the bulk of the bad has come out. But one is not entirely sure."
But anyone willing to take the chance - or seize the opportunity - likely has a thick skin, he said.
'Any time you're dealing with bankruptcy proceedings and distress situations, you've already developed a lot of callouses," Hu said. "You don't feel it anymore."
Lay resigned as chairman and chief executive Wednesday, saying the multitude of lawsuits and investigations into Enron's spectacular collapse in an accounting scandal is preventing him from properly running the company.
Enron said it will search for a restructuring specialist to serve as interim chief executive and help the company survive the biggest bankruptcy in history.
"They're going to need someone with a specialization in these situations that can devote 100 percent of his time to business matters of the company," said Mike Greenberger, a law professor at the University of Maryland. "It's impossible to deal with Congress and the Justice Department and try to resuscitate a company at the same time."
Lay, 59, will remain on Enron's board. Enron spokesman Vance Meyer said he will not receive a severance package.
Lay was chairman and CEO for almost all of the 16 years since the company was created from a 1985 merger of two natural gas pipeline companies. In that time Enron grew from a mildly profitable business into the world's largest energy marketer. It diversified its trading to include pulp, paper and bandwidth, among other commodities.
Enron reached No. 7 on the Fortune 500 and earned hundreds millions in reported profits while concocting financial partnerships that allowed the company to keep half a billion dollars in debt off its books.
Last year, the accounting practice was exposed, and Enron's stock slid to less than a dollar from about $80. The company filed for Chapter 11 bankruptcy, and thousands of Enron employees lost their jobs, as well as much of their life savings, since their 401(k) accounts were loaded with company stock.
Congress, the Justice Department, the Securities and Exchange Commission and others are investigating. Lay and the company face numerous lawsuits and increasing criticism from employees, shareholders and politicians demanding answers as to how Enron could implode so savagely.
William Brandt Jr., president and chief executive of Development Specialists, a Chicago-based firm that helps distressed businesses rebound, said Enron's next CEO could be a trustee appointed by the judge overseeing the bankruptcy in New York.
A trustee would answer to the judge rather than Enron's board or its creditors, Brandt said. A showing of fraud, mismanagement or incompetence of previous management traditionally supports the appointment of a trustee.
Hu said that if Enron ends up appointing a CEO, it must be someone who inspires confidence without expecting the typical perks of top executives, such as stock options.
The lure would be the reputation boost that would come from saving a company from such a huge, controversial downfall, he said.
"There's a lot more laughter and mirth when you're an obstetrician rather than when you're a coroner," Hu said. "And here, you're a coroner. It's an enormously difficult task. And everybody's looking over your shoulder."

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.

Lay's exit prompts mixed reactions
Amid praise for ex-CEO, many say his departure is overdue
By MARY VUONG
Copyright 2002 Houston Chronicle
Jan. 25, 2002, 12:03AM
Overdue. Appropriate. Best for the company.
Those were the thoughts of some former Enron employees on Ken Lay's resignation as chairman and chief executive officer of Enron.
Respected. Upstanding. Personable.
Those were the words they used to describe the man, as they waited Thursday for relief from a fund set up for former employees.
"Everybody saw him as sort of a grandfatherly figure," said Steve Crumley, a former manager with the broadband unit. A man you looked up to and trusted, Lay "had a good head on his shoulders," added Crumley, 43, of The Woodlands.
"Very caring, very giving, very personable -- maybe just like the guy next door," said Nathan Childs, 36, of Kempner, who was a technician for the information technology hardware department.
"All of us thought very highly of Ken Lay," said Helena G. Payne, a senior accounting clerk before retiring last March after 24 years. She lost her 401(k) funds following Enron's collapse.
Payne, 61, said she occasionally met Lay when he strolled through departments or at special breakfasts on the 50th floor in which about a dozen employees discussed grievances with him.
"He had an open-door-type atmosphere," and made sure his managers and directors did the same, she said.
Juantongia Calvin, who worked in global management, held Lay in the "highest regards" before Enron's collapse. She still does, she said.
He took care of employees, and his community activism pushed her to get involved as well, said Calvin, 30, of Houston. "He was one of the most respected persons I had ever met or worked for."
Lay was not a mysterious figure nor did he ride in his own private elevator, recalled former accounting specialist Sue Nix, yet he was hardly someone you bumped into in the cafeteria.
Nix, 57, a Huffman resident, said she encountered Lay on the elevator regularly. "He would talk to you just as if you were as important as anybody else."
In one elevator ride, Nix said, Lay showed her two grandsons -- who had accompanied her to work -- how to piece together a puzzle.
"It proved he was human," she said. "I always was very proud when (people) spoke of Ken Lay."
Nix said her view of Lay "hasn't really changed. So much blame has been put on his shoulders."
Several of those interviewed said their perceptions of Lay have shifted, albeit not very dramatically. He is to blame for some of Enron's failure, although how much is not yet clear to them, they said.
They believe other executives and senior managers are responsible, too, such as former CEO Jeffrey Skilling and former Chief Financial Officer Andy Fastow.
"I feel like maybe (Lay) was influenced by the wrong type of people," Payne said.
"I thought (Lay) was a really wonderful man," said Kimberly Niekamp, a former accounting specialist. "I thought it was all (Skilling's fault)."
Now, Niekamp, 38, of Humble said, she doesn't know what to say or think of Lay. "A terrible person," she offered in a questioning tone.
There is a sense that maybe he was greedy, disconnected and too focused on the political process, said Crumley, adding, "He should've focused more on the realities of running the business."
Calvin said Lay could have prevented Enron's failure, but that others could have as well.
"I blame the people responsible for taking the millions," Childs said.
Whether Enron can return to its previous glory is questionable or unlikely, some said.
"I'm not sure that it (Lay's resignation) is going to help Enron get back on its feet," Crumley said, but restoring the company "would be tough with him at the helm."
Payne said it was necessary Lay resign to handle all the lawsuits and it was best for the company to move forward.
"I don't look for Enron to come back as Enron," Nix said.

News
Ex-staffers say Enron division inflated profits
Alex Berenson, New York Times News Service

01/25/2002
Chicago Tribune
North Sports Final ; N
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(Copyright 2002 by the Chicago Tribune)

A division of Enron Corp. overstated its profits by hundreds of millions of dollars over the past three years, and senior Enron executives were warned almost a year ago that the division's profits were illusory, according to several former employees.
The division, Enron Energy Services, created in 1997, competed with utilities to sell electricity and natural gas to commercial and industrial customers. It was run by Lou Pai, who sold $353 million in Enron stock in the past three years, more than any other Enron executive, and Thomas White, who left Enron to become secretary of the Army last June.
Energy Services accounted for a small part of Enron's revenues but was promoted by the company as a big growth opportunity.
But former employees suggest that Energy Services used shoddy accounting practices to create "illusory earnings," in the words of Jeff Gray, who joined Enron in 2000 and worked at the division for most of 2001.
For example, by estimating that the price of electricity would fall in the future, Enron could book an immediate profit on a contract. By contrast, companies using traditional accounting book profits only as they deliver the services.
A spokesman for White did not return calls for comment. Pai and a spokesman for Enron also did not return calls.
Peggy Mahoney, a spokeswoman for Energy Services, said the division's financial results had accurately reflected its business. "It was no pie in the sky," she said.
As a result of its practice of projecting profits, Energy Services salespeople and senior managers pressured the managers who made the key assumptions about deregulation and energy prices, said Glenn Dickson, a manager at Energy Services who was dismissed in December.
"The whole culture was much more sales driven than anything else," Dickson said. "The people that were having to sign off on the deals with a gun to their head knew that it wasn't a good deal."
Dickson and other former employees said senior executives at Energy Services knew that their assumptions were unreliable.
At the same time, expenses ballooned as Energy Services found that the costs of managing its contracts were higher than it had projected.
"They knew how to get a product out there, but they didn't know how to run a business," said Tony Dorazio, a former product development manager at Energy Services.
None of the ex-employees said they knew whether Pai or White was aware of any accounting lapses at Energy Services.

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.

Jesse Jackson To Hold Enron Rally Today
Job Search Help Available Online
Posted: 9:18 a.m. CST January 25, 2002
Updated: 9:44 a.m. CST January 25, 2002
KPRC, Channel 2, Houston
HOUSTON -- The Enron Corp.'s ex-workers will take center stage Friday as the Rev. Jesse Jackson holds a rally in their honor.
The rally will be held at noon Friday at the Antioch Missionary Baptist Church, which is across the street from Enron's headquarters in downtown.
Jackson said that Houston-area ministers and members of his Rainbow Coalition will unite in prayer as a sign of support to help rally for financial assistance for the Enron employees left jobless and with shriveled 401(k) accounts, which were mostly invested in the now bankrupt company.
"(The laid-off workers) hands were tied behind their backs as their life's savings went down the river," Jackson said.
Jackson tried to meet with former Enron Chief Financial Officer Kenneth Lay Thursday night, but was turned away.
Lay's secretary said that he didn't have time to meet with Jackson.
But Lay told Jackson that he had a family emergency.
"It's not personal," Jackson said.
Before the rally, Jackson met with business and community leaders to see what more could be done for the fired workers.
Job Search Help
Enron is helping laid-off workers look for jobs by posting their resumes online.

Former employees can e-mail their resumes to careerservices@enron.com.

News2Houston and Click2Houston.com are also helping laid-off employees.

Employers looking to hire workers can post their job openings on Click2Houston. For more information, log onto the discussion page.

The Labor Department is also trying to help laid-off Enron employees. It activated a toll-free hot line to take calls from laid-off Enron employees, which directs them to nearby One-Stop employment centers. The number is (877) US2-JOBS.

News
Enron's fall piques Congress' interest in 401(k) rules
Michael Tackett, Tribune senior correspondent

01/25/2002
Chicago Tribune
North Sports Final ; N
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(Copyright 2002 by the Chicago Tribune)

On Dec. 21, 1999, in Enron's chest-puffing days, the company churned out a press release to tout its status as one of Fortune magazine's "100 best companies to work for in America."
"Our corporate culture and our world-class employees make Enron a great place to work," said Kenneth Lay, the company's chairman and chief executive officer. "We are proud to receive recognition as a top workplace; it's a reflection of our commitment to our employees and their key role in our company's success."
Now Lay has resigned, and Enron Corp.'s commitment to employees, especially its retirement savings plans, is under high-profile congressional scrutiny. And the story of how many Enron workers watched their 401(k) plans, the savings programs designed to ensure a comfortable retirement, become nearly worthless is sparking a broader debate on the potent political issue of retirement security.
Some lawmakers and pension specialists are wondering if the Enron case will be for the 401(k) plan what the Studebaker case of nearly 40 years ago was to more traditional company pension plans. In the Studebaker case, workers were shocked to find their pension benefits were not guaranteed when the company terminated the plan in 1963.
That case prompted Congress to eventually pass the Employee Retirement Income Security Act of 1974, establishing among other things a government guarantee of defined-benefit pension plans. But those protections do not apply to 401(k) plans, which have dramatically overtaken traditional pensions in number in the last 15 years.
"I've watched this go from a backwater technical issue no one paid attention to, to now being one of the core issues people think of," said Rep. Earl Pomeroy (D-N.D.), a leading pension authority in Congress. "As a result, the politics behind it have grown hotly charged as well.
"This is a mixed blessing. The good news is Congress is now interested," Pomeroy said. "The bad news is Congress is now interested. This is an area where ill-advised, well-intentioned legislation can do some serious damage."
Even before the hearings started, several legislative proposals have been introduced. One, by Sens. Barbara Boxer (D-Calif.) and Jon Corzine (D-N.J.), would limit employee contributions in company stock to 20 percent of the total and employees could convert any matching company stock to another financial instrument within 90 days. To reduce the appeal of granting a match in stock, the legislation also would cut tax breaks for matching company stock in half.
Another proposal, offered by Rep. Charles Rangel (D-N.Y.), calls for a federal tax penalty on sales of stock by company insiders if other lower-ranking employees are restricted.
The federal government can only loosely regulate most employee benefits because companies provide them on a voluntary basis. And, as workers often come to find, companies almost universally reserve the right to change, amend or terminate any or all of those benefits.
Buffet of benefits
Businesses are far more likely, however, to emphasize benefits as an inducement to sign on and stay with a company. Enron's employee handbook, for instance, lays out a rich buffet of benefits in addition to the 401(k) plan: a stock options plan that awarded up to 25 percent of salary in Enron stock options; subsidized membership at The Body Shop fitness center, complete with tai chi and Pilates classes; and an on-site doctor's office.
Like many companies, Enron also offered a 401(k) savings plan, listing its stock as the first option of many investment funds available. The company matched each $1 an employee contributed with 50 cents worth of Enron stock.
Those who chose the Enron option were rewarded famously as the stock value soared. But as Enron's stock plummeted, they learned the crushing reality of the risk inherent in 401(k) plans. The plaintive stories of families whose retirement savings were wiped out will no doubt be told during the hearings.
Congress is likely to respond in some fashion, and Pomeroy and others are concerned that lawmakers could actually set back the cause of retirement security. For instance, if Congress were to regulate 401(k) plans too heavily, companies might choose to not offer them, putting workers' retirement finances in even greater peril.
Companies also could choose to provide no match. Indeed, as salaried workers at Ford Motor Co. found recently, that company match is voluntary and Ford suspended its contribution to 401(k) plans for 2002. What's more, the government can guarantee a pension plan because it is not based on an employee making an investment decision. Similar protection for a 401(k) plan would be tantamount to the government guaranteeing an ever-rising rate of return.
Defined-benefit plans, promising a certain amount of money for life upon retirement, are far more easily regulated than 401(k) plans, whose results depend on market forces and individual choices. In the last 10 years, most 401(k) plans clearly increased in value that would have far exceeded defined-benefit plans.
Shifting of risk
But it is also true that most companies, desirous of having employees control large blocks of stock, encourage investment in company stock. When that stock goes down in value, the risk of the investment becomes harshly clear.
The number of American workers covered by some form of pension plan has remained nearly constant for 25 years, at about 50 percent of the private sector labor force. But over that time, the number covered by 401(k), or defined-contribution, plans has far exceeded those covered by the more traditional defined-benefit plans. With that move has also come a shifting of risk, from the employer to the employee.
"The shift from the defined-benefit plan to the defined- contribution plan has left employees with a great deal more exposure than they had under traditional pension plans," Pomeroy said. "And, to my knowledge, Congress has never had a hearing on this great shift."
That may well be about to change. And there are those who are pushing for Congress to take a more aggressive stance. For one, Karen Friedman, director of policy strategies of the Pension Rights Center in Washington, said Congress should "enact protections to see that Enron doesn't happen again."
"One big question that this raises is: Are we, in this society, overreliant on the 401(k) plan and other non-insured savings plans?" Friedman said. "We think this is the perfect time to have that debate. We've been warning of the perils of 401(k) plans for years and years. Maybe 401s were great in a bull market. The question is, are they the right plan in today's market?"
For now, how that question will be answered falls to Congress.
"You know Congress is going to be looking for one," Pomeroy said, "or if not one, a darned good press release."

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.

World
Enron: The Fallout
The history of a head-spinning conglomerate: Wall Street darling: Enron trader was an unregulated commodities exchange
Jan Cienski
National Post

01/25/2002
National Post
National
A10
(c) National Post 2002. All Rights Reserved.

WASHINGTON - Enron may have got its start in the lunch-bucket industry of natural gas pipelines, but in its glory days as the seventh-largest company in the United States it claimed it had rewritten the laws of economics by using the power of the Internet.
But like the high-flying dot.coms it emulated, the company came crashing down to earth, felled by a suspect business model and crooked accounting on an eye-popping scale.
While employees in Houston lament their vanished retirement savings and Washington goes into scandal mode, law enforcement officials, politicians and financial regulators are trying to piece together what went wrong and why.
It all began so simply.
In 1986, Kenneth Lay was appointed chief executive officer of Houston-based Enron, the result of a merger between two steady but unspectacular pipeline companies, Houston Natural Gas and InterNorth.
The business was uncomplicated and profitable at the start: It would sell a specific supply of natural gas to a utility or business on a certain day.
Dissatisfied with remaining an energy small fry in the capital of big oil Texas, Mr. Lay dreamed big.
The only way his company could grow was to speed along energy deregulation then being contemplated by Washington. Enron quickly got into the lobbying game, pressing the case for less government control of the energy business.
It and other energy companies got their way in 1992, when the Commodity Futures Trading Commission, headed by Wendy Gramm, the wife of the powerful Texas Senator Phil Gramm, exempted Enron and other power marketers from its oversight.
She was rewarded with a place on the company's board of directors and Enron got into the complicated business of being an energy broker.
Instead of simply selling natural gas it was carrying in its own pipelines, it began to use its trading and negotiating skills to sell electricity.
Quickly, Enron diversified and began trading anything that could be made into a commodity, a head-spinning conglomeration of businesses that included everything from high-speed Internet capacity to interest rates fluctuations to weather changes.
The company took its cut from both the buyer and the seller, essentially acting as an unregulated commodities exchange.
Meanwhile, it bought up utilities around the world, such as Britain's Wessex Water, for which it paid US$2.2-billion, a power plant in India and another in Oregon. It also dabbled in unrelated areas, like a plan to build a high-speed broadband telecommunications network and signing a 20-year deal with Blockbuster Video to sell video on demand.
Wall Street quickly took notice. In 1997, Enron shares were trading for less than $20. In August, 2000, they reached their all-time high of $84.
Everyone jumped aboard the bandwagon. Financial journalists extolled Enron as the new exemplar, stockholders got rich, as did the company's growing corps of workers, many of whom ploughed their pension savings into Enron shares.
Politicians also got their cut. Enron became one of the United States' largest political donors, lavishing $1.7-million during the 2000 elections alone (75% of that went to Republicans).
Enron is the biggest lifetime contributor to George W. Bush, spending almost $600,000 on the U.S. President and former Texas governor. Mr. Lay made it into the inner circles of power -- to the point of being called "Kenny-boy" by the nickname-loving commander-in-chief and becoming the only energy executive allowed to meet Dick Cheney, the U.S. Vice-President, when he was crafting the administration's energy policy last year.
A big billboard in Enron's gleaming 50-storey headquarters in downtown Houston displayed the ever-climbing share price.
The company splashed around its money, spending $100-million on the must-have for dot.coms, an eponymous sports stadium.
When many high-tech companies flamed out, Enron continued to soar -- investors were reassured by the tangible assets like pipelines and power plants backing its earnings rise.
The only problem was it wasn't making nearly enough money to justify its valuation and was being swamped by debt.
Seeking to stave off a share price collapse, its executives began creating shell partnerships, many of them named after Star Wars and Jurassic Park characters, to keep the debt off its books.
One such partnership, Chewco, fronted by chief financial officer Andrew Fastow, took more than $600-million in debt. The privileged secret investors who were allowed to take part in the partnerships were promised any losses would be made up in cash or Enron stock.
Those kinds of fudges made Enron appear highly profitable.
Arthur Andersen, the accountants who were supposed to make sure Enron's records followed the law, became increasingly uncomfortable. Last February, the accounting firm even considered dropping Enron as a client.
But any squeamishness was overcome by the more than $50-million it was making from its accounting and consulting work for the company.
The departure in August of Jeff Skilling, Enron's president and chief executive officer, for personal reasons signalled that something was very wrong.
Sherron Watkins, an Enron vice-president, wrote a one-page memo to Mr. Lay that month, warning him the company could "implode in a wave of accounting scandals."
On Oct. 16, Enron announced a $618-million loss for the third quarter and disclosed a $1.2-billion reduction in shareholders' equity because of the partnerships run by Mr. Fastow.
The share price began to plunge but Enron prevented its employees from cashing out their shares because of a change in pension system administrators.
An increasingly desperate Mr. Lay tried calling in his political chits, ringing up Cabinet officials, and even Alan Greenspan, chairman of the Federal Reserve. No one came to his aid, fearing they would be tarred in a money-for-influence scandal.
On Nov. 8, Enron announced it had overstated its earnings by $586-million over the last five years and had $3-billion in obligations to various partnerships.
The news made rival Dynergy drop a $23-billion merger offer. Enron declared bankruptcy on Dec. 2.
As federal authorities began to look into the collapse, Arthur Andersen accountants in Houston began to shred thousands of documents.
Now Washington's scandal machinery has creaked into action, with 11 congressional committees investigating the collapse, as well as the U.S. Department of Justice. Federal Bureau of Investigation agents are in Houston guarding Enron files and some congressional Democrats are calling for an independent investigator to look into links between the Bush administration and Enron.
And all that money that Kenny-boy lavished on the White House? His reward was a frosty mention from Mr. Bush calling him "Mr. Lay," then lamenting the $8,000 his mother-in-law lost by holding Enron shares.

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.

Following The Paper Trail In The Enron-Andersen Scandal
By Bryan Lee

01/25/2002
Dow Jones Energy Service
(Copyright (c) 2002, Dow Jones & Company, Inc.)

OF DOW JONES NEWSWIRES

WASHINGTON -(Dow Jones)- The following is a chronology of events uncovered by the House Energy and Commerce Committee's investigation of the financial collapse of Enron Corp. (ENRNQ) and the role of its outside auditor, Arthur Andersen LLP.
The paper-trail timeline was revealed in various documents released to the public by the committee in recent weeks:

Feb. 5, 2001 - Andersen's auditing team meets to discuss whether or not to retain Enron's business due to concerns about the propriety of the off-the-balance-sheet transactions.
The auditors weigh their concerns about "conflicts of interest" regarding former Enron Chief Financial Officer Andrew Fastow's involvement in overseeing the partnerships involved in the transactions versus forgoing the more than $100 million in fees Andersen expected to earn from its Enron business in 2001.
According to an e-mail to David Duncan, Andersen's lead auditor for the Enron account, the "significant discussions" also address concerns about "intelligent gambling" related to Enron's mark-to-market earnings, but the group ultimately concludes the risks of maintaining Enron's business can be managed.
The account also noted that Andersen had communications with Enron's board about the directors' views of the transactions. The committee is seeking further details about those communications.

August 2001 - After the surprise announcement that Chief Executive Jeffrey Skilling was resigning for personal reasons, Enron Chairman Kenneth Lay receives an anonymous memorandum warning the company could "implode in a wave of accounting scandals" due to increasing scrutiny from investors skeptical about the true reason for Skilling's resignation.
According to the memo, several Enron officials raised similar concerns directly with Skilling.
Aug. 20, the author of the memo, Enron Vice President Sherron Watkins, telephones an Andersen auditor and relays her concerns.
Watkins subsequently meets with Lay to discuss her concerns. At some point Lay directs Enron's law firm, Vinson & Elkins, to investigate the allegations raised by Watkins. In her memo, Watkins specifically advises that a firm other than Vinson & Elkins be used because it provided "true sale opinions" on some of the questionable transactions.

September 2001 - Andersen "consultation group" formed in response to growing alarm about Enron's plight and the auditing firm's admitted $1 billion accounting error uncovered in August that will require a significant writedown by Enron.
During these conference calls in September or early October, Duncan, the lead auditor, tells committee investigators that Andersen attorney Nancy Temple asks: "How are you on compliance with the document-retention policy on Enron?"
Duncan tells the committee staff his response was, "At best, irregular."

October 2001 - Andersen's concerns mushroom about how Enron will report its third-quarter results, and whether the report will pass muster legally and reflect generally accepted accounting practices.
Oct. 9, Andersen hires an outside law firm to advise the firm amid its growing concern about the Enron account, indicating Andersen was becoming concerned about its legal liability.
Oct. 12, Temple sends an e-mail to an Andersen executive, who forwarded it to Duncan, in which the Andersen attorney says: "It might be useful to consider reminding the (Enron) engagement team of our documentation and retention policy. It will be helpful to make sure we have complied with the policy."
The policy addresses "organization, retention and destruction" of client information.
Also Oct. 12, Duncan receives a draft press release from Enron in which the company plans to describe its $1 billion charge against income as a nonrecurring item.
Three days later, Duncan sends a memo to "the files" outlining his Oct. 14 discussion with Enron Chief Accounting Officer Rick Causey. Duncan voiced "strong concerns" that describing the charge as nonrecurring "could be misconstrued or misunderstood by investors."
Duncan also noted that he informed Causey that Andersen was aware of enforcement actions undertaken by the Securities and Exchange Commission "in cases where they believe such a presentation was materially misleading."
Oct. 15, Enron issued a press release describing the charge as nonrecurring.
Oct. 16, Temple sends an e-mail to Duncan advising him to delete her name from the memo about Andersen's concerns about Enron's handling of the third-quarter press release. "Reference to the legal group consultation arguably is a waiver of attorney-client privileged advice and if my name is mentioned it increases the chances that I might be a witness, which I prefer to avoid."
Around Oct. 19-20, Duncan learns the SEC has launched a formal inquiry of Enron's financial records and reporting. He informs the Andersen consultation group, which includes Temple. Oct. 22, Duncan and the Andersen auditing team meet with Causey, Enron's chief accounting officer, to discuss the SEC probe.
Oct. 23, Duncan convenes an "urgent meeting" of the Enron auditing team, at which he organizes a concerted effort to destroy a "significant" number of documents of interest to SEC and congressional investigators, Andersen executives testify.
Oct. 24, Enron fires Fastow, its chief financial officer.
Oct. 25, Enron issues a notice advising that preservation of documents is required by law, given that the company was being sued by investors.
The Duncan-led document destruction would continue through the first 10 days of November.

Nov. 8 - Enron reveals questionable partnership transactions helped it overstate its earnings since 1997 by nearly $600 million.
Temple, the Andersen attorney, issues a memorandum dated Nov. 10 ordering the preservation of documents related to the Enron account. The memo is sent after Andersen receives a subpoena from the SEC.
Duncan later tells committee investigators that he complied with Temple's instructions in a Nov. 9 voice mail and stopped document destruction, which Duncan said he had undertaken in compliance with the firm's policy on retention and destruction of documents.
Enron's stock has been steadily plunging, and enters free fall after Dynegy Inc. (DYN) announces it will abandon a proposed merger-rescue transaction.

Dec. 2 - Enron files the largest corporate bankruptcy proceeding in U.S. history. Its stock is worth cents a share. A year earlier, the company's stock peaked at nearly $90 a share.
Later in the month, two congressional committees hold hearings on the Enron debacle. Andersen Chief Executive Joseph Berardino testifies before the House Financial Services Committee that the company made mistakes but acted in good faith.
Senate Commerce Committee Chairman Fritz Hollings, D-S.C., calls for legislation to bar the use of special-purpose entities, such as the partnership transactions Enron used to take its debt off its books and overstate its earnings.
The House Energy and Commerce Committee announces it will formally investigate Enron's financial collapse. Documents gathered and interviews conducted provided since then form the basis of this timeline.

January - After more than a half dozen congressional committees have taken up the Enron matter, Andersen announces its employees destroyed a "significant" amount of paper and electronic records related to the Enron account.
Jan. 15, the company fires Duncan, who soon after meets with House Energy and Commerce Committee investigators.
Jan. 22, Enron announces Lay has resigned. The announcement comes after the Justice Department and the FBI begin a probe on reports Enron employees had engaged in document destruction. Lay is scheduled to testify Feb. 4 before two congressional panels, the House Financial Services Committee and the Senate Commerce Committee.
The House Energy and Commerce committee subpoenas Duncan to testify at a hearing Jan. 23. Duncan invokes his Fifth Amendment right against self-incrimination. Andersen officials lay full culpability for the document destruction at Duncan's feet and disavow knowledge of his actions at the time.

-By Bryan Lee, Dow Jones Newswires; 202-862-6647; Bryan.Lee@dowjones.com

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.

Developments related to the Enron collapse and investigation
By The Associated Press

01/25/2002
Associated Press Newswires
Copyright 2002. The Associated Press. All Rights Reserved.

-The first hard look by Congress at what's behind the Enron Corp. collapse left lawmakers Thursday certain of only one thing: Thousands of documents were destroyed by the energy company's blue-ribbon accounting firm.
-A federal judge barred Arthur Andersen LLP from shredding any more documents related to Enron Corp. audits and ruled employees who admitted to destroying documents must give depositions as soon as next month.
-Sen. Joseph Lieberman, D-Conn., whose Senate Governmental Affairs Committee also began hearings into Enron on Thursday, said the panel would issue subpoenas for Enron and Andersen's documents related to contacts with the White House or federal agencies and departments.
-Lawmakers in both the House and Senate said they were rethinking the need to consider legislation that would bar accounting firms from having lucrative consulting contracts with companies whose books they also audit.
-The Enron case already has produced several book deals, with publishers hoping to replicate the success of "Barbarians at the Gate," the best seller about the fall of RJR Nabisco.
-A Houston Boys and Girls Clubs center that was funded in part by bankrupt Enron Corp. will remain open after a businessman agreed to donate $1 million for its operation.

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.

News; National
First Day of Document Shredding Probe Gives Few Answers
Carol Costello, Kate Snow, Chad Myers

01/25/2002
CNN: Live at Daybreak
(c) Copyright eMediaMillWorks, Inc. (f/k/a Federal Document Clearing House, Inc.). All Rights Reserved.

Turning now to the latest on the Enron collapse, a House panel has launched hearings into document shredding, one of several Enron related probes.
CAROL COSTELLO, CNN ANCHOR: Turning now to the latest on the Enron collapse, a House panel has launched hearings into document shredding, one of several Enron related probes.
CNN Congressional Correspondent Kate Snow reports initial testimony was marked by dramatic exchanges and silence.
(BEGIN VIDEOTAPE)
KATE SNOW, CNN CORRESPONDENT (voice over): The panel's first witness, the man who seemed likely to have the most information, David Duncan, was Andersen's top partner on the Enron account in Houston.
REP. JIM GREENWOOD (R), PENNSYLVANIA: Did you give an order to destroy documents in an attempt to subvert governmental investigations into Enron's financial collapse?
DAVID DUNCAN, FORMER ANDERSEN AUDITOR: On the advice of my counsel, I respectfully decline to answer the question based on the protection afforded me under the Constitution of the United States.
SNOW: Duncan refused to testify, leaving current Andersen officials to do all the talking. They pinned the blame on Duncan, saying he had called a meeting last October and told others to use the shredder.
C.E. ANDREWS, ANDERSEN PARTNER: I agree that the action that took place on October 23rd and the subsequent elimination of e-mails and destruction of documents is an action that is totally inappropriate.
SNOW: Lawmakers wondered about the finger pointing.
REPRESENTATIVE CLIFF STEARNS (R) FLORIDA: Is Mr. Duncan being made a scapegoat here?
SNOW: But he wasn't the only one under fire. Attorney Nancy Temple wrote an October 12 e-mail about the company's policy on retaining documents. Duncan has told investigators he was following her advice. Temple was grilled on why she wrote that memo. Did she know Enron was being investigated? Did she know a whistle-blower had raised questions about the company's practices?
NANCY TEMPLE, ENRON ATTORNEY: To my recollection, I don't... UNIDENTIFIED REPRESENTATIVE: Just yes or no.
TEMPLE: ... recall seeing a letter from Ms. Watkins.
UNIDENTIFIED REPRESENTATIVE: Is that a no? So you're saying no, you did not know about Sharon Watkins' letter on October 23rd? You knew nothing about it? Is that your answer, that, no?
TEMPLE: I was aware that she had made allegations.
SNOW (on camera): After the hearing, investigators released another memo they said showed Andersen employees were encouraged to work overtime to destroy documents. Committee leaders believe up to 80 Andersen employees got the word to start shredding.
Kate Snow, CNN, Capitol Hill.
(END VIDEOTAPE)
COSTELLO: Did you watch any of the Congressional hearings yesterday afternoon?
CHAD MYERS, CNN CORRESPONDENT: I did.
COSTELLO: It was brutal, wasn't it?
MYERS: It was. I mean those guys really have their work cut out for them. And I hope someone really comes down and says this is really what happened and -- you can't say you're sorry because, right? But -- and this is why and we really get to the truth. Because those investors and those people that worked there really need to know the truth.
COSTELLO: Well, with some people not talking or refusing to talk, maybe we'll never get the answers.
MYERS: I'm afraid not.
COSTELLO: But at least they're making fools of them in public.
MYERS: Oh, well...
COSTELLO: I mean did you hear the questions? They were brutal.
MYERS: Sir, on the advice of my counsel and by the Constitution of the United States I'm not going to answer that question.
COSTELLO: Oh, well.
MYERS: Well, what else are you going to say?
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
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Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.

Enron's Australian Unit Faces Being Placed in Liquidation
By Andrew Trounson

01/25/2002
Dow Jones Business News
(Copyright (c) 2002, Dow Jones & Company, Inc.)

Dow Jones Newswires
MELBOURNE -- Enron Australia, a unit of collapsed U.S. energy trader Enron Corp., should be placed into liquidation, voluntary administrator Sims Lockwood said Friday.
Their recommendation, that will be made at a creditors meeting on Jan. 29, coincides with a dramatic decrease in the estimated value of Enron Australia's electricity trading derivatives book.
While the value of the book is "fluid," with some counterparties still yet to close out their positions amid a dispute over value, the administrator now forecasts that given the uncertainty the book value will at this stage only be enough to return around 37 cents in the dollar to creditors.
In Australia, going into administration gives an insolvent or near-insolvent company breathing space to deal with its financial difficulties. The administrator investigates the company's affairs and gives creditors information to decide whether the company should be allowed to keep trading or wind up.
Previously, the administrator had estimated the book value at 5.38 million million Australian dollars (US$2.8 million), which would have been enough to supply creditors with about 100 cents in the dollar.
In a statement Friday, Sims Lockwood's Tony Sims said he was "still working toward a dividend approaching 100 cents in the dollar and that this was still achievable if the book was valued on a consistent and commercially reasonable basis by all the counterparties."
But so far, the administrator has only been able to reach agreement on valuations with 12 of Enron Australia's 37 counterparties.
Mr. Sims said that "the administrators would recommend that the company be placed in liquidation at the meeting of creditors on 29 January."
At least three of Enron's largest debtors haven't closed out their transactions.
"Legal advice suggests that in the event of liquidation, the liquidator may upon application to the court, force the counterparties to close out," Enron Australia said in the same statement.
"The administrators will issue legal proceedings if necessary to ensure that a consistent and rigid framework applies to achieve a consistent and equitable outcome for both counterparties and Enron Australia stakeholders," Enron Australia said.
Enron Australia appointed administrators after its U.S. parent filed for Chapter 11 bankruptcy protection
Write to Andrew Trounson at andrew.trounson@dowjones.com
Copyright (c) 2002 Dow Jones & Company, Inc.
All Rights Reserved

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.

Enron case already leads to several book deals

01/25/2002
Associated Press Newswires
Copyright 2002. The Associated Press. All Rights Reserved.

NEW YORK (AP) - The Enron case already has produced several book deals, with publishers hoping to replicate the success of "Barbarians at the Gate," the best seller about the fall of RJR Nabisco.
Doubleday's Currency imprint has agreed on a six-figure deal with Houston-based journalist Mimi Swartz to write about it. The book, tentatively titled "Power Failure," is scheduled for the fall.
"We hope this will resonate with people who liked `Barbarians at the Gate,"' Doubleday spokesman David Drake said Thursday.
He promised "a lively narrative" about the Houston-based energy corporation that collapsed amid allegations of shady accounting and executive greed. The energy giant filed for bankruptcy protection last month, becoming the biggest corporate failure in U.S. history.
One book Doubleday is unlikely to promote is "Creative Destruction," a 2001 publication that praises Enron and others for "overcoming cultural 'lock-in"' by, among other things, "abandoning outdated, ingrown structures and rules and adopting new decision-making processes."
Meanwhile, a Texas-based journalist who has written about the energy industry, Robert Bryce, is working on "Pipe Dreams," to be published by PublicAffairs in the fall.
Bryce's editor, Lisa Kaufman, said the deal was worth as much "as we have paid for any book" and also cited "Barbarians at the Gate" as a model.
"We all want to come out with `Barbarians at the Gate,"' she said with a laugh.
A third book, "Power Shock," is scheduled for a fall release by John Wiley & Sons. On its Internet site, Wiley also is pitching "The Financial Numbers Game," a new advice book the publisher says will help readers "avoid an Enron scenario."

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.

Charities planning to carry on without the benefit of Enron's philanthropic giving
By KRISTEN HAYS
Associated Press Writer

01/25/2002
Associated Press Newswires
Copyright 2002. The Associated Press. All Rights Reserved.

HOUSTON (AP) - The United Way of the Texas Gulf Coast expected a $6 million donation from Enron Corp. by March, but the group isn't counting on it now.
As Enron grapples with bankruptcy and a sweeping reorganization, museums, arts organizations and charities like the United Way are making plans that no longer hinge on donations from the former energy giant.
The company regularly shared its wealth when it held the No. 7 spot on the Fortune 500 list and reported billions of dollars in annual revenue. But now Enron has laid off thousands of employees and seen the value of its stock virtually disappear, throwing future giving in doubt.
"It's not been given at this point," said United Way spokesman Mario Gomez said of the $6 million. Last year, Enron gave $5.5 million to the group, which won't be able to assess the effect of losing this year's contribution until its current campaign to raise $78 million is over.
Enron typically gave about 1 percent of its pretax earnings to various causes under the leadership of Kenneth Lay, who resigned Wednesday as chairman and chief executive. He will remain on Enron's board, and the company is searching for a new leader.
Lay also gives privately through the Linda and Ken Lay Foundation. Internal Revenue Service records show the foundation took in $14 million in 2000 and donated $2.5 million to charities, museums and other organizations in Texas and across the country.
Lay's company had an average philanthropic record for a corporation, said Tom Billitteri, an editor at the Chronicle of Philanthropy.
In 2000, the most recent year for which figures are available, Enron came in 62nd out of 96 corporations across the country who responded to a Chronicle survey of charitable giving.
That year, Pfizer Inc. topped the list, having given $340 million in cash and assets. Merck & Co. was second with $249 million, and Microsoft Corp. was third with $231 million.
Enron donated $10.8 million that year.
"There was nothing extraordinary about their philanthropic giving," Billitteri said. "It was decent, but not unusual."
Enron hasn't formally suspended writing checks to charities, but the bankruptcy hinders its ability to give, company spokesman Mark Palmer said.
"The creditors' committee does have to work with us to make sure everything we do is preserving the value of the estate, and that there's an equitable way to reorganize the company so we can pay back our creditors," Palmer said.
The Houston Ballet became one of those creditors when a $15,000 check from Enron bounced two days before the Dec. 2 bankruptcy filing in New York.
"It happened so quickly there was not anything to do at that point," said C.C. Conner, managing director of the ballet.
She said Enron adds as much as $50,000 each year to the ballet's $12.5 million budget. Contributions are crucial, she said, because ticket sales don't cover the costs of putting on ballet performances. Ballet officials plan to seek other sources of funding.
Still, Conner didn't think that the loss of Enron contributions amounted to a crisis.
"If we had dozens of Enrons, we would have a real problem," she said. "But one is not enough to cause a drastic problem."
Other beneficiaries are also adjusting to the loss of a major local source of philanthropy. The M.D. Anderson Cancer Center in Houston, one of the world's top cancer hospitals, no longer expects a donation of about $600,000 once promised by Enron. And the 6-year-old Holocaust Museum Houston, which depends on Enron for up to 10 percent of its annual budget, is planning to find that $235,000 elsewhere.
M.D. Anderson named a cancer screening clinic after Enron when the company gave $1.5 million in a capital campaign. The hospital's current president, Dr. John Mendelsohn, and a former president, Dr. Charles LeMaistre, are members of Enron's 14-member board of directors.
For other organizations, the expected loss of Enron donations has nearly been disastrous.
The company pledged $2.4 million over the next decade for the Enron Boys & Girls Club, which opened Nov. 1 as the company entered its downward spiral. When Enron filed for bankruptcy, the club was left penniless and nearly had to shut down.
On Thursday, club officials announced that the crisis had been averted. A Houston businessman had come to the rescue, offering to donate $1 million.

AP Photo HTP103
Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.

EDITORIAL
Friday Forum This week's topic: The Enron debacle How could it have happened? What should be done? What lessons should be learned? What you're saying READER'S SOUND OFF Take stock of Enron's fall
SMOKE AND MIRRORS

01/25/2002
Orlando Sentinel
METRO
A17
(Copyright 2002 by The Orlando Sentinel)

Enron became a smoke-and-mirror operation run by stogie-smoking, high-stakes gamblers. The name of the game was greed and they used the savings of trusting people, employees and investors, to stake their play. Many employees and investors lost a lot when Enron crumbled, and they deserve some remedy for their losses. But they should have seen, even through the fog of investors' greed, that things were amiss.
Take, for example, the businesses and families across the country who were gouged last winter under the guise of a shortage of natural gas. Many paid monthly gas bills that equaled their mortgage payments, and Enron earned huge profits on the backs of those who used gas to keep from freezing. Did any Enron employee or investor question that corporate gain?
Shame on all of us that we have come to embrace greed as a way of life and believe that greed results in honest gain. Last summer, as Enron executives began cashing in their chips, it seemed they knew that they probably couldn't sustain similar profits through another winter and that a wave of gamblers' debt was coming due. At the same time, they were staring at the specter of a proposed merger with Dynegy and the reality that required financial disclosure would reveal Enron's hidden debt and misstated profit.
Shame on a government that would allow an Enron to operate in a vacuum on its own terms and without regulation. The saddest and most shameful result of this fiasco is the damage done to our country, which represents itself as God-honoring. It probably wouldn't take too much more of this kind of corporate misbehavior to bring our capitalistic system down. That, in itself, is the best reason for the exercise of swift and sound judgment on the people who squandered our trust.
Maggie Q. Miller
Clermont

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.

EDITORIAL
Friday Forum This week's topic: The Enron debacle How could it have happened? What should be done? What lessons should be learned? What you're saying READER'S SOUND OFF Take stock of Enron's fall
WORDS TO THE WISE

01/25/2002
Orlando Sentinel
METRO
A17
(Copyright 2002 by The Orlando Sentinel)

Everyone has an angle on the Enron debacle. But I haven't heard anyone point out the real scare on this topic yet: In short, nobody knew! I don't care if you read every business journal and article covering Enron and the industry during the past five years. Nobody knew the real story.
And what should terrify the average American investor is if the seventh-largest corporation in the country can hide such a morass, what about the companies you are invested in?
Do you know who handles their accounting practices? Do you know how they structure their debt? How many offshore (potentially debt- hiding) accounts are represented by the companies in your 401(k) or standard-stock portfolio?
Will Stanton
Kissimmee

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.

EDITORIAL
Friday Forum This week's topic: The Enron debacle How could it have happened? What should be done? What lessons should be learned? What you're saying READER'S SOUND OFF Take stock of Enron's fall
WORDS TO THE WISE

01/25/2002
Orlando Sentinel
METRO
A17
(Copyright 2002 by The Orlando Sentinel)

Everyone has an angle on the Enron debacle. But I haven't heard anyone point out the real scare on this topic yet: In short, nobody knew! I don't care if you read every business journal and article covering Enron and the industry during the past five years. Nobody knew the real story.
And what should terrify the average American investor is if the seventh-largest corporation in the country can hide such a morass, what about the companies you are invested in?
Do you know who handles their accounting practices? Do you know how they structure their debt? How many offshore (potentially debt- hiding) accounts are represented by the companies in your 401(k) or standard-stock portfolio?
Will Stanton
Kissimmee

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.

Sarah Palmer
Internal Communications Manager
Enron Public Relations
(713) 853-9843


In case you did not receive jim's e-mail this morning, attached is the most
recent draft of enron's statement to the settlement judge.  This needs to be
submitted by the close of business today.  Please send you final comments to
me as soon as possible. -Bob 3-3180
---------------------- Forwarded by Robert Frank/NA/Enron on 07/09/2001 09:51
AM ---------------------------


Here is the bid weeks and holidays

Sep.
No more Holidays
Bid Week sep 24-26 monday tues and weds

Oct.
No Holidays
Bid week 25-29 thur ,fri and mon

Nov
Holidays 22 full day and 23 1/2 day
bid week 26 - 28   mon - wed

Dec
Holidays 24 & 25 full day  31 1/2 day
Bid Week is 21, 26 and 27  Friday , Weds, & Thrus


Pls see email from IBJ with my comments in red.  I look forward to receiving
your respective input where indicted.
Thanks heaps to both of you.

Jane McBride

I am also attaching my memorandum to them.

----- Forwarded by Jane McBride/AP/Enron on 11/09/2000 03:34 PM -----

	"Teruyo Suzuki" <teruyo.suzuki@ibjbank.co.jp>
	11/08/2000 08:49 PM

		 To: <Jane.McBride@enron.com>
		 cc: "Yamato Konishi" <yamato.konishi@ibjbank.co.jp>
		 Subject: Re: Fw: IBJ ISDA MASTER AGREEMENT

Dear Jane,
Reviewing your comments, our current position is as follows.

Part 1

(b) US$50,000,000

Basically our company_fs guideline for the Threshold Amount is US$1,000,000
but it seems very small for significant customers and we can change it to
US$10,000,000.   As this amount is usually agreed in the Master Agreement
with major commercial banks, we hope this is acceptable to you, too.

John - is there any way we can accept this?  I think it is going to be
difficult to get them to agree so, if you still can't accept it, is there any
way you can agree to the 10 million limit if at the same time something else
is changed?

(g)  As for (1), we would like to add _gthe obligations of such resulting,
surviving, or transferee entity hereunder are guaranteed by Enron Corp._h in
5th line
after _gEnron Corp._h  IBJ could accept to continue the Transactions with
the counterparty when it merges with the other company and becomes
materially weaker if the surviving company is guaranteed by Enron Corp.

Sara - Do you think we can accept this? We would not be agreeing necessarily
to give a corporate guarantee, but instead would have the option of putting
one in place to avoid a default.  If the concept is OK on your side, I think
we should add "hereunder" as indicted above or something to restrict the
obligations which need to be guaranteed.

Sara, I would also like to add a ")" after "party" at the end of line 4 of
paragraph (g) of Part 1 of the Schedule.  OK?

Regarding (2), please delete it because it refers to Credit Support Annex
which we are not going to enter into for the time being

Sara - the question is whether we just delete the language or replace it with
something else.  The second option would be better and given the discretion Y
would have in this situation IBJ should not object provided the drafting
works. Do you have any ideas of anything which would work within the
framework of the rest of the schedule and the master?  The final sentence
should go anyway I guess.

John - I guess you may need to consider above with Sara.

(h) Agreed.

(k) Agreed.

Part 3

Regarding further document for certification, we can include the following
language.
_gAny certificate or document reasonably requested by the other party
evidencing or certifying that the execution, delivery and performance of
this Agreement by the party requested has been duly authorized_h

I think this sounds OK.

As for annual report, we will revert to you.

John - As you can see from my memo, as a starting point, I have asked them to
tell us what they have available re financials and will revert when I hear
back from them to see what you think.

Part 4
(a)  Agreed.

(f) Even if there are 20 Transactions between us which settle on the same
day, our operation can not net the payment of the same currency.  Our system
does not allow the payment netting of more than one Transaction.

John - They want to delete "not" from this provision.  I think we need to
assume that they are telling us the truth and that they just can't do it.
The question is then, do we delete "not" or do we delete the entire paragraph
(f) from Part 4 of the schedule.  Pls let me know what you want to
do.'

(h)  New York Branch address

 1251 Avenue of The Americas, New York, NY 10020, U.S.A.

Part 5

(a) When an option buyer who fully paid the premium goes bankrupt, we
believe it will be more practicable that the other party (option seller)
terminate a transaction according to Section 6(a) and pay the amount payable
under Section 6(e), if any, to the option buyer.  If option seller does not
terminate the transaction, it sounds unnatural that the option seller pay
the remaining payment  on each payment date to the receiver of the
defaulting party (option buyer). _@We do not usually include the safety net
provision for a technical default.  Even if payment default due to
operational error, there is ample (three days) grace period for nonpayment
party after receiving the notice of non-payment by the other party.

Sara - what do you think, how flexible do you think we can be on this?

(e) Agreed.

(g)  I understand the benefit that non-defaulting party could setoff its
Affiliate_fs obligation against defaulting party_fs obligation.    But in
Japan only setoff between the parties who entered into the Agreement is
allowed.   If you know the case that in any country an applicable law
permits to setoff the amount owed by the non-defaulting party_fs Affiliate
against the amount owed by the defaulting party, please let us know.

Sara - any comments?  I am checking whether what they saying about Japanese
law is true.

(h)   As we should also obtain our Credit Department_fs approval of credit
line for the transferee before agreeing the transfer, we would like to
insert the following words at the end of a new Section 7(c).

_gAnd provided, further, that the transferring party has notified
non-transferring party of the proposed transfer and the non-transferring
party has not objected to the proposed transfer within 20 days of such
notification, it being understood that the sole grounds for objection shall
be the non-transferring party_fs good faith belief that the proposed
transfer would give rise to an adverse tax, regulatory or, legal or internal
credit policy consequences or material credit concerns to the
non-transferring party, or that necessary internal credit approval has not
been granted_h

Sara - As noted in my memo to them, I had thought we may be willing to add to
the end of this paragraph "and provided that the transfer does not cause any
adverse tax consequences for the other party in relation to which the
transferring party is not willing to indemnify the other party."  They have
asked us to go far further than this now and I am not sure that we should be
willing to agree to anything after "legal" in line 6 given that the guarantee
provision should give their credit department comfort.

Part 6

We can accept (a), (b) and (e) but cannot agree with (c),(d),(f),(g) and
(h).

Sara - your thoughts?

If you have any question or uncertainty about the above items, please let
me know.

Thank you for your assistance in this matter.

Teruyo Suzuki
Industrial Bank of Japan
813-3214-3872
813-5200-7427


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Attached is the referenced agreement.  Please do not hesitate to call me if I
can be of any further assistance.  I am a paralegal in the Legal Dept.  My
direct phone no is (713) 853-3399.