Just as an FYI.  This is what I get for asking why the BLM permits in the EMS
files don't have EMS' name on them.

----- Forwarded by Ann Elizabeth White/HOU/ECT on 08/23/2000 11:24 AM -----

	"Ted Huss" <tedhuss@caspers.net>
	08/22/2000 07:17 PM

		 To: <Ann.Elizabeth.White@enron.com>, <K.Kimminau@forerunnercorp.com>
		 cc: <Ken.Choyce@enron.com>, <Jeff.Gilliam@enron.com>, <gilletteland@vcn.com>
		 Subject: Re: Enron Plats---BLM portion

We received a letter today from Kennedy requesting a partial relinquishment
and requesting Enron be allowed to receive a partial assignment (the
pipeline only) of their rights under the 2 BLM grants issued to Kennedy.  We
now need to get the Form 299 signed, and sent out along with a check for
$50.

FYI, from the conversation we had with Ruth today, if the BLM requires an
archaeological study on fee ownership (Daly), we may need to come up with a
plan.  For years now Daly has adamantly refused to allow an archaeologist on
his property.  BLM refuses to issue any permits without a study.
Stalemate....however, I am optimistic the assignment will be rubber stamped
without all the hassle and history they've been through on this issue.
----- Original Message -----
From: <Ann.Elizabeth.White@enron.com>
To: <K.Kimminau@forerunnercorp.com>
Cc: <Ken.Choyce@enron.com>; <Jeff.Gilliam@enron.com>; <tedhuss@caspers.net>;
<gilletteland@vcn.com>
Sent: Tuesday, August 22, 2000 10:11 AM
Subject: Re: Enron Plats

Ken

As a general rule, EMS will need a certificated plat for every landowner
that we have taken an agreement from in our name AND there has been
construction of any facility on the property.   For instance, I understand
from Ted that there is an agreement in one system with the Louis McBeth
Trust but EMS has never constructed any pipeline on the property.  Since
Wyoming has the one year rule with respect to recordation, we will still
need to have a plat showing the location of the McBeth Trust property but
it need not be a certificated plat because there haven't been any
facilities constructed on the land.  If there has been a facility
constructed, it has to have a certificated plat for the affected property.

However, there is always an exception to the rule.  I had assumed there
were no facilities constructed on land which had been acquired by Kennedy
or any other 3rd party.  However, I found at last week that there are at
least a few BLM sites where the property is not (yet) in the name of EMS
but is still in the name of Kennedy.  For those, I have asked Ted to secure
an assignment of rights from Kennedy into EMS.  If it is a site where both
Kennedy and EMS have facilities, then we will need a partial assignment of
rights.  However, the plat will need to show the entirety of the lands
covered by the permit and will need to specifically delineate the right of
way/compressor site owned by EMS.  It need not show the lands/property
which are still held by Kennedy (or any other producer) but I think it
would be a helpful tool to have.

One other thing, in the interest of expediency and efficiency, just have
all of the corrected plats sent directly to Chuck and Ted's attention in
Gillette.  I am going to be sending them the electronic version of the
Memorandums of Agreement to which the plats need to be attached and they
can handle it from there.  Chuck will send me copies for my file.

Thanks!

                    Ken Kimminau
                    <K.Kimminau@forerunne        To:     Sandi Mitchell
                    rcorp.com>
<S.Mitchell@forerunnercorp.com>, Steve Murphy

<S.Murphy@forerunnercorp.com>, Dick Clift
                    08/22/2000 08:56 AM
<D.Clift@forerunnercorp.com>, Lon Mitchell

<L.Mitchell@forerunnercorp.com>
                                                 cc:     Bruce Gies
<B.Gies@forerunnercorp.com>,
                                                 Ed Balderas
<E.Balderas@forerunnercorp.com>,
                                                 "Jeff Gilliam (E-mail)"
<Jeff_Gilliam@enron.com>,
                                                 "Ann Elizabeth White
(E-mail)"
                                                 <awhite2@enron.com>
                                                 Subject:     Enron Plats

Sandi, Steve, Dick,  Lon;

Heads  up!

I was informed  yesterday that Forerunner is to provide property plats for
the gathering lines  installed by Kennedy Oil in the Box Draw System.
These are the lines  labeled as existing on the Box Draw Base Map.

Murph, All you can do is walk the lines (Remember  no ATV's on Daly's
property) with your GPS and do the best you  can.

We also need to get  plats done for all the compressor sites as well, both
screw sites and  booster sites. We should have pretty good data on the
site locations from  what we've been providing the DEW.

I will let you know  later if we need to provide plats for the receipt
points  too.

I'll talk with you  later and hopefully have more details;
KK


Section V: please wait for one more mail

(See attached file: 251694-SECTION 5.doc)

 - 251694-SECTION 5.doc


Vince,

Here is your new location on the 32nd floor.

Have a wonderful morning!
---------------------- Forwarded by Kevin G Moore/HOU/ECT on 04/28/2000 07:48
AM ---------------------------

Kevin G Moore
04/28/2000 07:49 AM
To: Lisa B Cousino/HOU/ECT@ECT, Heather Choate/HOU/ECT@ECT
cc:
Subject: Churn List

Goodmorning ,
Today is the day for the great move.

Well I certainly hope this is not a bother.
I have a few changes since a few members has
left our group.

New Locations

Sam Smith  -EB3274A
Elena Chilkina - EB3274B  (Michael Sergeev)
Patricia Tlapek - EB3273A
Vince Kaminski - EB3273B
EB7273C - Vacant  (Roman Zadorozhny)

If you are not able to make changes on the churn list ,
please be aware that we are going to label all items to
the locations listed , whereby these  items will be at the
locations listed above.

Please if you need more information feel free to call
x34710.

Hope this day be a Good One for you !

                                      Thanks
                                  Kevin Moore


AGA is (23) w/d for 3/16/01

* In addition to the net withdrawal of 23 Bcf of working gas from storage,
1 Bcf of base gas was withdrawn from the Producing Region for the week
ending March 16, 2001. To date, 8 Bcf of base gas has been withdrawn.


Carol -

Pursuant to our conversation, attached are clean versions of the BETA and Fee
Agreement for signature by Natsource.

I have made the following revisions from the documents forwarded on 3/6:

BETA - Paragraph 4(c) - the addition of the words ", which acceptance is
accessible by the Broker" in the second sentence.

 Paragraph 7(a) - modified to delete the concept of acceptance of the BETA by
clicking on the appropriate spaces and added the words "Broker's first use of
the user ID and Password to access the Website"

Fee Agreement  - Cleaned up the wording in the second full paragraph from
"for" to "form".

Please let me know if there is anything further.  If not, please have
Natsource sign two originals of each agreement and forward them to me for
counter-signature by Enron.

Thanks.

Mark
Senior Counsel, ENA
Phone:     713-345-8897
Facsimile: 713-646-3940
E-Mail:      Mark.Greenberg@enron.com


Clayton,

Thanks.

Vince

	Clayton Vernon @ ENRON
	07/27/2000 03:08 PM

To: Vince J Kaminski/HOU/ECT@ECT, Stinson Gibner/HOU/ECT@ECT, Pinnamaneni
Krishnarao/HOU/ECT@ECT, Vasant Shanbhogue/HOU/ECT@ECT, Mike A
Roberts/HOU/ECT@ECT, Joseph Hrgovcic/HOU/ECT@ECT, Grant Masson/HOU/ECT@ECT,
Tanya Tamarchenko/HOU/ECT@ECT, Zimin Lu/HOU/ECT@ECT, Alexios
Kollaros/HOU/EES@EES, Martin Lin/HOU/ECT@ECT, Maureen Raymond/HOU/ECT@ECT,
Osman Sezgen/HOU/EES@EES, Paulo Issler/HOU/ECT@ECT, Patricia
Tlapek/HOU/ECT@ECT, Farouk Lalji/HOU/ECT@ECT, Amitava Dhar/Corp/Enron@ENRON,
Alex Huang/Corp/Enron@ENRON, Kevin Kindall/Corp/Enron@ENRON, Kevin G
Moore/HOU/ECT@ECT, Clayton Vernon/Corp/Enron@ENRON, William
Smith/Corp/Enron@ENRON, Yanna Crystal/Corp/Enron@ENRON, Jose
Marquez/Corp/Enron@ENRON, Samer Takriti/Corp/Enron@Enron, Chonawee
Supatgiat/Corp/Enron@Enron, Shalesh Ganjoo/HOU/ECT@ECT, Tom
Halliburton/Corp/Enron@Enron, Elena Chilkina/Corp/Enron@Enron, Cantekin
Dincerler/HOU/ECT@ECT, Brad Aimone/NA/Enron@Enron, Datren
Williams/NA/Enron@Enron, Sevil Yaman/Corp/Enron@Enron, Sofya
Tamarchenko/NA/Enron@Enron, Bob Lee/NA/Enron@Enron, Ainsley
Gaddis/NA/Enron@Enron, Gwyn Koepke/NA/Enron@Enron, Guiseppe
Paleologo/NA/Enron@Enron, Hector Campos/HOU/ECT@ECT, Anita
DuPont/NA/Enron@ENRON, Youyi Feng/NA/Enron@Enron, V Charles
Weldon/HOU/ECT@ECT
cc:
Subject: SAS

to the group:

if you wish to use SAS, there are a few simple things you need to do:

1) you need to get a Unix password if you don't already have one (your user
id will be the same as on the NT network, but a different password is issued)
2) you need a program called "Exceed" on your PC.  request it from IT (you
already have this if you are already a user of LIM on the Unix platform)
3) you need an "ftp" program on your PC. you can go to www.download.com and
download one (i like wsftp)
4) Exceed is funny in the way it runs. When you invoke Exceed (or LIM
Advanced User (under Infobases) if you already have this) it will install
itself the first time, and will then "disappear" to the Taskbar. you need to
*right* click on the taskbar on Exceed, and then choose "Tools" and "Client
Startup" and then "New."

You will enter a box which should already be set for REXEC and an XWindow
emulation. You need to specify the Host Type as Sun, enter your User Name and
Password, set the Host Name to:

capers.ect.enron.com

and then, on the Command Line, type the following (carefully):

/usr/openwin/bin/xterm -display @D

Then, use the file menu to Save this as capers.xs and then click on the Run!
menu. within a second or two, a window will open up with you logged into the
serve capers. You are now on a Unix server, and the directory is your home
directory. From here, if you simply type "sas" the 3 windows for an
interactive session with SAS should open on your desktop. You are in business.

5) you also need to install your ftp. follow the procedures with the
software, and then create a new session called "enron" where you choose as
the server simply "earth" (do not add any further descriptors such as
.enron.com). supply your user name and *unix* password, check the "remember
password" box, and the default communication setups should be correct (eg,
host type as "automatic detect").

when you invoke ftp and connect to enron, it will put you in your home
directory on the Unix system, the same directory your xwindow comes up in
under Exceed.

if you have any problems, i'll be happy to help

Clayton

PS i have a complete set of new SAS manuals i am happy to loan out if you'll
just write your name down when you take them.


Dear Mitch and Ken,

I wanted you to know that I am approaching Sidney Taurel about joining the AEI Board of Trustees (letter pasted below).  If he should ask your opinion about this, I hope you will be brutally candid, and therefore enthusiastic and encouraging.

Best,

Chris
-------------------------------------------
October 19, 2001

Mr. Sidney Taurel
Chairman, President, and CEO
Eli Lilly and Company
Lilly Corporate Center
Indianapolis, IN 46285

Dear Sidney:

My call the other day was to ask if you would consider joining the Board of Trustees of the American Enterprise Institute.  AEI is prospering and is doing a great deal of research pertinent to your immediate business interests.  We are also leading in many other fields of economics, politics, security, and social welfare that I believe you would find fascinating and important.  We have an outstanding Board, and will elect several additional trustees in advance of our annual meeting on December 7, 2001.

I understand you will be back in Indianapolis on Monday, October 22?when I will be out of the country, to return on Thursday, October 25.  I will call you then to discuss, but thought it would be helpful to send you some background information.  Enclosed are a list of our current trustees, a list of upcoming Board dates, an outline of our current research agenda, our 2000 annual report (the 2001 report comes out next month), and a few other things.

I will tell you more about the Board schedule when I call.  The AEI Board is not an honorific but it is not a heavy time commitment either; our trustees are all very busy people, and we are good at economizing on their time.

We have many titans of industry and finance on the Board, but all of them are here because of personal qualities: character, intellect, and sympathy for AEI's purposes.  Those are the reasons I am approaching you, and why I think you would find AEI a worthwhile engagement.  So I hope you will give the idea serious consideration?or at least keep an open mind until we talk!

With best wishes,

Yours cordially,

/s/ Chris DeMuth

Enclosures


Hey Dad,
Unfortunately, Vegas kicked my butt, but I had fun.  I would love to go to
Uncle George's B-day party.  Are guests invited as well b/c Shanna would like
to go.
I heard you had fun with the sister this weekend - what did you do?

-e

"Larry W. Bass" <lwbthemarine@bigplanet.com> on 02/20/2001 01:03:57 PM
To: eric preston bass <Eric.Bass@enron.com>
cc:
Subject:

Good afternoon. Welcome home. Heard from your  Mother that they took some of
your money. That's too bad. I have never let them  take my money! By the way,
Uncle George is having an 80th birthday party this  Sat., Feb. 24, @ 5p.m. @
Luther's BBQ, 27752 I-45 N.,, across from the Woodlands  Mall. We are going.
You are invited. If you intend to go you should RSVP to Vera  @ 281-379-5252
or Rebecca @ 281-367-8470. Have a good  week.-Dad


Attached is the revised Clickpaper approvals list for 11-06-00

Note: Counterparty called back and reverified the Legal Name for Delta paper
Corporation


- baseball.gif


Hello:
There is one feature that has not been transferred to the new stack manager.
When I sort by both counterparty and product at the bottom of the screen, the
position summary does not sort by both product and counterparty, just by
product.  It would be very useful if you can replace this.
Thanks,
John


Clean Air/NOx Briefing for ENA:  On Monday 8/28, Environmental Strategies
held a detailed briefing on Clean Air/NOx regulations for the ENA East Power
Desk, which resulted in several ongoing projects.   Over 40 people, including
Kevin Presto (head of trading), almost all the traders, all analysts, and all
fundimentals (IT, information) staff were in attendance.    Mary Schoen
pulled the presentation together and addressed financial impacts of the
regulations on power markets. Jeff Keeler gave background, history, and
future timelines regarding NOx and other air regulation.   Gus Egnheim and
Marc Phillips  assisted with technical questions related to control
technologies.   The meeting  concluded with a discussion of strategy going
forward, and a project to assist ENA in a detailed analysis of the effects on
power plants and markets in the NOx SIP Call states.   Kevin Presto (who is
also responsible for running the peakers) indicated that it may be more
preferable to sacrifice some of our peaker interests and develop a strategy
that supports state and EPA efforts that increase costs as much as possible
on our competitors.   This will be an ongoing strategic effort  to add value
to ENA.

   Texas Renewable Energy Credit Comments:  Enron led a group of companies
that generate, trade and market renewable energy and environmental advocates
in filing joint comments on issues related to the implementation of a
Renewable Energy Credit ("REC") trading program in Texas.  Stacey Bolton  led
drafting efforts on behalf of the group, and worked within Enron to
coordinate our positions.  The program is consistent with positions we've
taken, in that attributes of energy can be traded separately from its energy
source.    The group recommended changes that would lead to consistency and
adaptability, including comments about what information should be included on
the credit's "label" and a recommendation that any environmental disclosure
requirements be developed in conjunction with the REC trading protocol.

Pipeline Safety:   We continue to monitor the legislative climate following
the tragic El Paso pipeline eruption and fire in Carlsbad, NM, in which 10
people were killed.    While the widely-held perception among industry is
that the accident will have a negative effect on the legislation, information
from Capitol Hill continues to indicate that the legislation will not likely
become more burdensome -- there is just a greater likelihood that it will
receive attention and an effort will be made to pass something this
Congress.   It is expected that the full Senate may act in the two weeks
after Labor Day weekend, but that the House still may not be ready to move
legislation through committee and to the House floor until later in
September.  INGAA is recommending hiring an outside lobbying firm to assist
in efforts going forward, due to the thought that many companies will not
want to be active or visible in lobbying this issue because of the El Paso
accident.  Jeff  Keeler will investigate the climate on Capitol Hill further
before Enron signs off on this strategy.   In addition, Stan Horton will be
in DC the week of 9/5 to attend meetings at DOE and Dept. of Treasury, to
talk about the possible impacts of the accident on energy markets and the
economy.

In addition to advising GPG, we have been providing information and analysis
to ENA Competitive Analysis, who is advising ENA management on the effects of
this legislation on gas and power markets, so that we may take advantage of
opportunities that arise.

 Climate Change:   Jeff  Keeler has been providing information on various
climate change proposals to Enron South America, who will be engaging in a
dialogue with Brazilian environmental regulators over Enron's involvement or
interest in Joint Implementation and Emissions Trading programs.

Georgia NOx SIP Regulations - Marc Phillips attended a meeting with the
Georgia Environmental Protection Division regarding their development of
non-attainment NOx transport rules in Georgia to gather environmental
intelligence for ENA/EES project development.

Houston Non-Attainment regulations - Marc Phillips is attending a meeting
with other pipeline companies to discuss preparing industry comments
regarding the proposed Houston non-attainment regulations and the emission
limits on reciprocating engines that could have a $30 - 40 MM impact on GPG
operations over a three year period.

Enron Ergonomic CBT -  Russell Tucker received and approved the release
candidate short version of the Office Ergonomics CBT CD-ROM and should have
final copies from manufacturing for the 20 administrative level employee
workstation egronomic pilot testing during the first week of September 2000.

API Task Force Review For ANSI Z365 Vote - Russell Tucker has reviewed the
extensive changes made by the Accredited Standards Committee  for the Z365,
"Control of Cumulative Trauma Disorders" proposed ANSI consensus standard as
a member of the API Task Force deciding the issues.   Russ submitted comments
directly to the Committee on behalf of Enron.

International Emergency Response Contractors - Completed the list of
emergency responders.  Report submitted to Mike Terraso on August 31.  A
meeting with Don Hawkins GPG, serving as Corp Emergency Response
coordinator, will be scheduled for next week to present the list and discuss
next steps.

EHS Indirect Report Staff Meeting - Mike Terraso met with the  EHS management
indirect reports ,environmental legal and conferencing in with Jeff Keeler in
Washington, NEPCO in Seatle.  The meeting reviewed 2000 objectives status;
current federal legislative issues and  shared cross company information.

EES/OEC Federal Services -  Mike Terraso, Henry Van and Susan Worthen met
with Don Hawkins to review EHS asset support services for EES/OEC federal
services.

Friends of Earth - Mike Terraso, Kelly Kimberly and Lauren Goldblatt  are
meeting with FOE in Washington on Friday to initiate stakeholder dialogue on
biodiversity  in response to FOE proxy statement at last the  Enron
shareholder meeting.  Other NGO's attending Conservation International, World
Wildlife Fund, World Resources International.

Contractor Safety Awareness Program - Corp EHS (S.Watson, H. Van, M. Terraso)
in cooperation with Bill Donovan's group conducted initial building
contractor safety awareness program for contractors performing demolition/
buildouts in the Enron Building.

Earth Day 2001 - at the request of Cindy Olsen, Mike Terraso met with Missy
Stevens (community relations) to review Enron Earth Day 2001 initiatives.

GHP - Business Council for Clean Air - Mike Terraso participated in review of
a clean air technology verification proposal presented to Greater Houston
Partnership Business Council for Clean Air.  The program would substitute
emission reductions gained through accepted technology to lessen the impact
on mobile and stationary air emission sources in the eight county Houston
non-attainment area. The project would be performed in time for a mid-course
correction of the Texas SIP.

Texas Nature Conservancy - M. Terraso and John Shafer (GPG VP EHS)  met with
Robert Potts, Texas Nature Conservancy director and Nigel Homer, National
Nature Conservancy to review potential cooperative employee educational and
community service activities programs for Enron.

 Clean Air/NOx Briefing for ENA:  On Monday 8/28, Environmental Strategies
held a detailed briefing on Clean Air/NOx regulations for the ENA East Power
Desk, which resulted in several ongoing projects.   Over 40 people, including
Kevin Presto (head of trading), almost all the traders, all analysts, and all
fundimentals (IT, information) staff were in attendance.    Mary Schoen
pulled the presentation together and addressed financial impacts of the
regulations on power markets. Jeff Keeler gave background, history, and
future timelines regarding NOx and other air regulation.   Gus Egnheim and
Marc Phillips  assisted with technical questions related to control
technologies.   The meeting  concluded with a discussion of strategy going
forward, and a project to assist ENA in a detailed analysis of the effects on
power plants and markets in the NOx SIP Call states.   Kevin Presto (who is
also responsible for running the peakers) indicated that it may be more
preferable to sacrifice some of our peaker interests and develop a strategy
that supports state and EPA efforts that increase costs as much as possible
on our competitors.   This will be an ongoing strategic effort  to add value
to ENA.

   Texas Renewable Energy Credit Comments:  Enron led a group of companies
that generate, trade and market renewable energy and environmental advocates
in filing joint comments on issues related to the implementation of a
Renewable Energy Credit ("REC") trading program in Texas.  Stacey Bolton  led
drafting efforts on behalf of the group, and worked within Enron to
coordinate our positions.  The program is consistent with positions we've
taken, in that attributes of energy can be traded separately from its energy
source.    The group recommended changes that would lead to consistency and
adaptability, including comments about what information should be included on
the credit's "label" and a recommendation that any environmental disclosure
requirements be developed in conjunction with the REC trading protocol.

Pipeline Safety:   We continue to monitor the legislative climate following
the tragic El Paso pipeline eruption and fire in Carlsbad, NM, in which 10
people were killed.    While the widely-held perception among industry is
that the accident will have a negative effect on the legislation, information
from Capitol Hill continues to indicate that the legislation will not likely
become more burdensome -- there is just a greater likelihood that it will
receive attention and an effort will be made to pass something this
Congress.   It is expected that the full Senate may act in the two weeks
after Labor Day weekend, but that the House still may not be ready to move
legislation through committee and to the House floor until later in
September.  INGAA is recommending hiring an outside lobbying firm to assist
in efforts going forward, due to the thought that many companies will not
want to be active or visible in lobbying this issue because of the El Paso
accident.  Jeff  Keeler will investigate the climate on Capitol Hill further
before Enron signs off on this strategy.   In addition, Stan Horton will be
in DC the week of 9/5 to attend meetings at DOE and Dept. of Treasury, to
talk about the possible impacts of the accident on energy markets and the
economy.

In addition to advising GPG, we have been providing information and analysis
to ENA Competitive Analysis, who is advising ENA management on the effects of
this legislation on gas and power markets, so that we may take advantage of
opportunities that arise.

 Climate Change:   Jeff  Keeler has been providing information on various
climate change proposals to Enron South America, who will be engaging in a
dialogue with Brazilian environmental regulators over Enron's involvement or
interest in Joint Implementation and Emissions Trading programs.

Georgia NOx SIP Regulations - Marc Phillips attended a meeting with the
Georgia Environmental Protection Division regarding their development of
non-attainment NOx transport rules in Georgia to gather environmental
intelligence for ENA/EES project development.

Houston Non-Attainment regulations - Marc Phillips is attending a meeting
with other pipeline companies to discuss preparing industry comments
regarding the proposed Houston non-attainment regulations and the emission
limits on reciprocating engines that could have a $30 - 40 MM impact on GPG
operations over a three year period.

Enron Ergonomic CBT -  Russell Tucker received and approved the release
candidate short version of the Office Ergonomics CBT CD-ROM and should have
final copies from manufacturing for the 20 administrative level employee
workstation egronomic pilot testing during the first week of September 2000.

API Task Force Review For ANSI Z365 Vote - Russell Tucker has reviewed the
extensive changes made by the Accredited Standards Committee  for the Z365,
"Control of Cumulative Trauma Disorders" proposed ANSI consensus standard as
a member of the API Task Force deciding the issues.   Russ submitted comments
directly to the Committee on behalf of Enron.

International Emergency Response Contractors - Completed the list of
emergency responders.  Report submitted to Mike Terraso on August 31.  A
meeting with Don Hawkins GPG, serving as Corp Emergency Response
coordinator, will be scheduled for next week to present the list and discuss
next steps.

EHS Indirect Report Staff Meeting - Mike Terraso met with the  EHS management
indirect reports ,environmental legal and conferencing in with Jeff Keeler in
Washington, NEPCO in Seatle.  The meeting reviewed 2000 objectives status;
current federal legislative issues and  shared cross company information.

EES/OEC Federal Services -  Mike Terraso, Henry Van and Susan Worthen met
with Don Hawkins to review EHS asset support services for EES/OEC federal
services.

Friends of Earth - Mike Terraso, Kelly Kimberly and Lauren Goldblatt  are
meeting with FOE in Washington on Friday to initiate stakeholder dialogue on
biodiversity  in response to FOE proxy statement at last the  Enron
shareholder meeting.  Other NGO's attending Conservation International, World
Wildlife Fund, World Resources International.

Contractor Safety Awareness Program - Corp EHS (S.Watson, H. Van, M. Terraso)
in cooperation with Bill Donovan's group conducted initial building
contractor safety awareness program for contractors performing demolition/
buildouts in the Enron Building.

Earth Day 2001 - at the request of Cindy Olsen, Mike Terraso met with Missy
Stevens (community relations) to review Enron Earth Day 2001 initiatives.

GHP - Business Council for Clean Air - Mike Terraso participated in review of
a clean air technology verification proposal presented to Greater Houston
Partnership Business Council for Clean Air.  The program would substitute
emission reductions gained through accepted technology to lessen the impact
on mobile and stationary air emission sources in the eight county Houston
non-attainment area. The project would be performed in time for a mid-course
correction of the Texas SIP.

Texas Nature Conservancy - M. Terraso and John Shafer (GPG VP EHS)  met with
Robert Potts, Texas Nature Conservancy director and Nigel Homer, National
Nature Conservancy to review potential cooperative employee educational and
community service activities programs for Enron.

Cuiaba II - Joe Kolb was not able to participate in the conference call this
week.  Mid-September is key date after which work on the compressor stations
is expected to begin in earnest.

Cuiaba Pipeline - Joe Kolb is trying to contact David Runte to verify
information in the monthly report and is currently planning a trip to Bolivia
with Edgar Zuleta to inspect and review project-related issues first hand.

Construction BMPs - Bob Moss has not heard received any comments from Jerry
Martin or his staff.  Regarding the fiber optic component of the BMPs, Joe
Kolb has not been able to discuss the project with Herb Caballero.   Bill
Osborne has distributed the pipeline BMPs to Shafer, Ryther, and Steenberg
for their comments.  He hopes to get their feedback this week and then take
it on to others within GPG.

Greenfield Risk Mangement Project - Documents that lay out sequence of
environmental aspects of major capital project development are nearly
complete.  The one for GPG is being reviewed by Bill Osborne.

Recycling Committee -  Wayne Lei has sent info on PGE's recycling program,
which Joe Kolb provided to David  Ronkainen.  Joe Kolb conducted an informal
small energy conservation survey on 3AC 15 and found that 53% of the 36
office credenza lights and 35% of the 110 cubicle lights were left burning,
plus 3 computers, 1 radio and 1 fan.  If we decide to promote energy
conservation in our downtown offices, the impact should be something that can
be estimated by doing before and after surveys on a few floors.

Isagen Privatization, Colombia - Don Stevens provided an environmental due
diligence scope of work to Mario Brunasso, Development Engineering, who will
forward it to a local engineering consulting firm.  Due to high security
risk, Enron has elected to hire Harza for the full scope of the due
diligence.  The privatization includes hydro and thermal generation and
transmission, accounting for over 30% of Colombia's energy supply.

Project Dragon, Asia - The Environmental Schedule of the Share Purchase
Agreement was circulated for review by Bruce Lundstrom, APAChi Legal.  Copies
were forwarded to Frank Smith for comment.  The lenders have begun their due
diligence in Hong Kong and key discipline leaders are on standby to answer
questions.  A TransitionsTeam may be deployed in October/November.  This deal
is still very confidential and Enron Asia power plants and personnel do not
know anything.

ENEL, Nicaragua - Don Stevens has requested Ramiro Garcia to review proposed
legislation for Nicaragua to assist in the evaluation of its potential
impact.  The proposal is very stringent and does not have much chance of
success; however, Enron has learned some of the other bidders are addressing
capital costs associated with the potential requirements.  The bid date is
October 12.

Annual Report - Many technical and management problems have plagued the Image
Center's pdf of the Annual Report.  Gavin Dillingham succeeded in the posting
and publication of the final edition.  Hard copies will likely be ready next
Friday for distribution to Executive Staff.

Valuation Exercise - Susan, Henry, Jeff, and Marc all provided input on the
EHS value to Enron exercise.  An additional meeting was held with Gia to
explain some of the tasks.

EES/Eli Lilly Deal - Susan Worthen participated in several meetings with both
EES and Eli Lilly to learn more about the scope of services and EES' EHS
management system.  A more detailed meeting with EES's Enron Building
Services Inc. group will be held next week.  An EHS briefing has been
scheduled for September 13 to answer Eli Lilly's environmental due diligence
questions.


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=000000000024615&Page=
MyReq.


Attached is a progress report on the agenda items that were prepared in our
last meeting.  We can discuss completion items during our meeting tomorrow.

 Jim


Nancy, good job.  Keep up the good work.  See if you can get the rest of your team
	to follow suit with their interconnects.  Thanks. Lynn

 -----Original Message-----
From: 	Clapper, Karen
Sent:	Wednesday, September 26, 2001 1:09 PM
To:	Blair, Lynn
Cc:	Callans, Nancy
Subject:	RE: Great Lakes Confirmed Quantities

Lynn,

Nancy Callans is the one that got Great Lakes to start e:mailing the confirmations.  I just sent the e:mail to all the reps.

 -----Original Message-----
From: 	Blair, Lynn
Sent:	Wednesday, September 26, 2001 12:54 PM
To:	Clapper, Karen; Barry, Patrick; Blair, Jean; Bryan, Randy; Callans, Nancy; Carr, James; Walden, Shirley; Washington, Kathy; Wilkens, Jerry
Cc:	Buchanan, John; Kowalke, Terry
Subject:	RE: Great Lakes Confirmed Quantities

	Good job in getting this done.  How are we coming with the other operators?  With us moving
	forward for Shirley to work from home, emails will be much better than faxes.  Thanks. Lynn

 -----Original Message-----
From: 	Clapper, Karen
Sent:	Wednesday, September 26, 2001 9:39 AM
To:	Blair, Lynn; Barry, Patrick; Blair, Jean; Bryan, Randy; Callans, Nancy; Carr, James; Clapper, Karen; Walden, Shirley; Washington, Kathy; Wilkens, Jerry
Subject:	Great Lakes Confirmed Quantities

Great Lakes is now e:mailing their daily confirmation sheets instead of faxing them.  The e:mail address for them that appears is:  oracle@glgt.com  GL Connect Reports
Karen A. Clapper
Enron Gas Logistics - NNG
karen.clapper@enron.com
Ph:  713-853-6735
Fx:  713-646-8000


Here it is.  I guess she didn't make my reservations. You might want to
double check.

Obviously, I do not need a car.

I would like to get these reservations asap for the upgrade.

Thanks,

Kay
---------------------- Forwarded by Kay Mann/Corp/Enron on 07/31/2000 05:05
PM ---------------------------

Claudette Harvey@ECT
07/31/2000 04:53 PM
To: Jeffrey T Hodge/HOU/ECT@ECT, Kay Mann/Corp/Enron@Enron
cc: Heather Kroll/HOU/ECT@ECT

Subject: Itinerary for trip to RALEIGH

---------------------- Forwarded by Claudette Harvey/HOU/ECT on 07/31/2000
04:49 PM ---------------------------

jhunt.vitoltvl@us.amadeusmail.com on 07/31/2000 02:56:00 PM
To: CHARVEY2@ENRON.COM
cc:
Subject: KROLL 2AUG HOUSTON TO RALEIGH

                                                   SALES AGT: JH/X4CMUY

                                          KROLL/HEATHER

  ENRON
  1400 SMITH
  HOUSTON TX 77002

  DATE:  JUL 31 2000

SERVICE               DATE  FROM           TO             DEPART  ARRIVE

CONTINENTAL AIRLINES  02AUG HOUSTON        RALEIGH D      0702P   1054P
CO 1884    A          WED   G.BUSH INTERCO RALEIGH DURHAM
                            TERMINAL C     TERMINAL A
                            DINNER                        NON STOP
                            RESERVATION CONFIRMED         2:52 DURATION

CAR                   02AUG NATIONAL               RALEIGH D
                      03AUG CONFIRMATION: 204986367COUNT
                            TELEPHONE: (919).840-4350.
                            LUXURY CAR AUTOMATIC AIR
                            RATE: USD68.18DY-0.19 MI 100FM
                            RATE GUARANTEED
                            BASE RATE: *ZL*USD68.18 BR-1DY
                            PICK-UP: RALEIGH/DURHAM AIRPORT, MORRISVILLE
                            DROP-OFF: RALEIGH/DURHAM AIRPORT, MORRISVILL

HOTEL                 02AUG HILTON GARDEN INN RALEIGH DURHAM AIRPORT
                      03AUG 1500 RDU CENTER DR
                                 MORRISVILLE, NC 27560
                            UNITED STATES OF AMERICA
                            TELEPHONE: 919-840-8088
                            FAX: 919-840-8048
                            TELEX: TLX NONE
                            CONFIRMATION: 3110494726
                            REFERENCE: A00LV0
                            SINGLE DOUBLE BED
                            RATE: *** USD 139.00 PER NIGHT
                            GUARANTEE GIVEN
                            REQ KING NS

CONTINENTAL AIRLINES  03AUG RALEIGH D      HOUSTON        0550P   0739P
CO 1283    A          THU   RALEIGH DURHAM G.BUSH INTERCO
                            TERMINAL A     TERMINAL C
                            DINNER                        NON STOP
                            RESERVATION CONFIRMED         2:49 DURATION

RESERVATION NUMBER(S)  CO/LLTHPT

CO  FREQUENT FLYER COSR369071
                  THANK YOU FOR CALLING VITOL TRAVEL

VITOL TRAVEL
1100 LOUISIANA STE 3230
HOUSTON, TX 77002
713 759-1444


Please be advised that the interview for Mary Poorman, to be held TODAY will
be in room 3671.   The schedule is as follows:

Pat Clynes 2:30
Lauri Allen 3:00
Gary Hanks 3:30
Daren Farmer 4:00


As discussed with you earlier, here is the summary of changes/enhancements to
the DPR group (to be implemented in order of priority):

Violation memos - to be prepared by 12pm by the next day for review by
Chris.  Within two weeks of today this time should move to 10am, the goal
that within the next 2 months certain violation prelim reporting will be done
the evening of trading.
Process - 8am or before DPR group to obtain understanding of violations for
previous day of trading.  8-10 am write explanations, ensure sign-off
obtained by trader.  10am - give violations to Chris for review. Issue
violations as soon as group numbers are final (as a opposed to total DPR
being final).  To be performed by Johnny Thibadeaux
Daily logs of problems -
Late submissions - Michael/Johnny to print out log of late daily submissions
and provide to Chris.  Chris to call business controller to let them know of
late reporting
Listing of special problems - everyday the DPR group works on special
problems.  Johnny & Chris to take over more of the resolution of problems (to
free up Michael for putting the DPR tgether).  All problems and the time it
took to work through them to be reported on a daily log provided to Chris.
Chris to call business controller to let them know of problem
Daily prudency reporting - DPR group to start daily reporting of prudency.
Audience to be determined (RAC wants it but I am opposed to putting it on the
website)

Johnny is to push through these process changes.

If you have any questions/comments please call me.

Best regards

Shona


Chris,
As we discussed, please get with Brenda Fletcher and set this up as a demand
to pay the .0153 storage fee, since the pathing does not allow me to pay
through the Volume system.  As long as it is on the deal, it will show up in
Settlements and I can pay.  Also, I need it done from January 2000 to current.

Thanks,
Mark


Please review the attached agreement for the Big Sandy Interconnect.  It is very standard.  It is reimbursable.  It has a few blanks that have to be filled in for certain dates that we (or Caithness) don't know just at this time with respect to receiving regulatory approval, in-service date, etc.  Caithness wants this agreement for their prospective equity partners to review for content.

Teb, Lee and Ron, this agreement has not changed since you have last seen it, but I just wanted you to give it one more look.

I would like to email to Kirk (Caithness) tomorrow afternoon.

Thanks, Kim.


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Thanks Scott, I heard about the same thing, and was checking futrher to see
if this was actually the case....

"Patti, Scott" <SPatti@ensr.com> on 09/25/2001 08:35:35 PM
To: "'Shafer, John'" <John.Shafer@ENRON.com>, "'Cebryk, Doug'"
<Doug.Cebryk@ENRON.com>, "'Larry.Campbell@ENRON.com'"
<Larry.Campbell@ENRON.com>
cc: "Schmidt, Jon" <jschmidt@ensr.com>, "'Taylor, Gina'"
<Gina.Taylor@ENRON.com>, "'Hyatt, Kevin'" <Kevin.Hyatt@ENRON.com>, "'Gadd,
Eric'" <Eric.Gadd@ENRON.com>, "Alstad, Jon" <JAlstad@ensr.com>, "Munson, Kim"
<KMunson@ensr.com>

Subject: Additional Note

By the way, I got a call back from Greg Simmons in the BLM State Office in
Arizona - my question to him was whether or not a proposed ROW across the
Agua Fria National Monument would constitute a "Fatal Flaw."  He indicated
that it likely would be a fatal flaw.  He said that it would take "an act of
congress" literally, not figuratively, to put a pipeline across a National
Monument.  The boundary of the Monument is the east side of I 17, south of
Cordes Junction - I don't know if we can stay on the west side of the
Interstate there, but we might oughta check it out - it looks like we could
get into some pretty rough side-sloping, two-toning.  FYI.

Scott J. Patti
Senior Project Manager
ENSR International
1601 Prospect Parkway
Fort Collins, CO  80525
Phone: (970) 493-8878
Fax:     (970) 493-0213
Email:  spatti@ensr.com

-----Original Message-----
From: Patti, Scott
Sent: Tuesday, September 25, 2001 10:28 PM
To: 'Shafer, John'; Cebryk, Doug; 'Dave.Hubbard@ENRON.com'
Cc: Schmidt, Jon; Taylor, Gina; Hyatt, Kevin; Gadd, Eric; Alstad, Jon
Subject: ENSR Cashflow Estimate Through Construction of Project Sundevil

Lady and Gentlemen,

As the Subject line would lead you to believe, I am attaching a further
refinement of our cost estimate, spread out over the life of the project.  I
know that you, Dave, requested a breakdown by personnel and hours, but I am
going to have to go home and pack for my trip.  We certainly can break this
down by personnel and hours, but I cannot do it tonight.  I apologize for
any inconvenience this may cause any of you.  Please remember that you can
contact Jon Alstad in my absence (cc'ed).  I will be back in the office on
October 1st.  Scott

Scott J. Patti
Senior Project Manager
ENSR International
1601 Prospect Parkway
Fort Collins, CO  80525
Phone: (970) 493-8878
Fax:     (970) 493-0213
Email:  spatti@ensr.com

**********************************************************************
The information contained in this communication is confidential and
privileged proprietary information intended only for the individual
or entity to whom it is addressed.  Any unauthorized use, distribution,
copying or disclosure of this communication is prohibited.
If you have received this communication in error, please contact the
sender immediately.

It is our policy that e-mails are intended for and should be used for
business purposes only.

This footnote also confirms that this email message has been swept by
MIMEsweeper for the presence of computer viruses.

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www.ensr.com
postmaster@ensr.com
**********************************************************************


Following is a brief description of the EnronOnline contractual framework and copies of the proposed ETA and PA, which have been revised from the initial EnronOnline versions to reflect experience of the last two years.  Hopefully this will assist the meeting on Monday morning.

Contracts Structure

There are three key documents that create the contractual environment for NetcoOnline: the 'Password Application' (PA), the 'Electronic Trading Agreement' (ETA) and the commodity contracts in the form of 'General Terms and Conditions' (GTCs) (or, alternatively, a Master Agreement). The PA is the only document which needs a written signature from the customer. The other documents are accepted online.

PassWord Application (PA)

The PA is a one-page document and is the only document that has to be physically signed by the counterparty (as opposed to any of the other documents, which are accepted online by clicking acceptance). The PA is the document by which the customer agrees to be bound by the terms of the ETA and the GTCs.

The PA, signed by an authorized person in the counterparty company, and approved by Netco, allows the customer to obtain a Master User ID. The Master User will be able to set up all traders and administrative users within his/her company and administer their access to various products in NetcoOnline.

We will send copies of the PA to likely customers of NetCoOnline before we launch the site. The document will also be available to be printed from the website after we launch. Customers will specify their Initial Password in the PA and must change it in the first log-in session. Upon receipt of signed PA, Netco will under normal circumstances enable the Master User Passwords within 24 hours for pre-approved customers. For counterparties with whom we are not familiar, more time is needed to run credit, legal, contracts, regulatory and tax check.

Electronic Trading Agreement (ETA)

The ETA binds counterparties to completed transactions through NetcoOnline. When the counterparty accesses NetcoOnline for the first time, he/she will be prompted to read and accept the ETA in order to proceed. The ETA states that all trades done via NetcoOnline will be governed by the General Terms and Conditions (GTCs) posted online for a particular product, unless there is a Master or any other Agreement between Netco and the counterparty in place.

General Terms and Conditions (GTC)

To be sent when the Buyer is known.
When a customer offers to transact in a Product type for the first time, he/she will be presented with the relevant GTC. The GTC's are similar to a streamlined Master Agreement, in that they provide the general contractual framework for multiple transactions in a given commodity. GTC's identify termination rights, provisions for security (as appropriate), operational conventions (nominations, etc.), payment periods, tax treatments, force majeure, penalties for non-performance, etc.

Customers must accept the terms of the relevant GTC online in order to proceed with a transaction, unless the company has a Master Agreement in place with Netco. Only one acceptance of GTC per Product Type per company is required. If there is a valid Master Agreement, then the system will not display the GTC, and the Master Agreement will apply.

Password Application:

Electronic Trading Agreement:

 -----Original Message-----
From: 	"Stuckey, Richard A [FI]" <richard.a.stuckey@ssmb.com>@ENRON
Sent:	Friday, January 04, 2002 4:34 PM
To:	Kimmel, Debra [FI]; Flood, Scott L [GCO]; Casaudoumecq, John [FI]; Kitchen, Louise; Costa, Randall [GCO]
Subject:	RE: PA and ETA topics

To be clear, that is 10:30am New York time

>  -----Original Message-----
> From: 	Kimmel, Debra [FI]
> Sent:	Friday, January 04, 2002 5:21 PM
> To:	Flood, Scott L [GCO]; Stuckey, Richard A [FI]; Casaudoumecq, John
> [FI]; 'Kitchen, Louise'; Costa, Randall [GCO]
> Subject:	PA and ETA topics
>
>
> A conference call has been scheduled for Monday, January 7th for 10:30am
> to discuss the PA and ETA topics with Enron.
> Below is the information for the conference call:
>
> Toll Free Number:	888-780-9655
> Passcode:		ETA
> Leader:			Richard Stuckey
> Confirm:		656118
>
>
> Any questions, contact Debra Kimmel at 212-723-9472
>
> Thanks,
> Debra


I'll call you tomorrow.  Michelle

Ann Ballard@ENRON
11/16/2000 05:08 PM
To: Michelle Cash/HOU/ECT@ECT
cc: Lou Stoler/HOU/ECT@ECT
Subject: Re: HSR Filing

Michelle -- I doubt that you would have documents of the type described in
the memo, but given that the Enron Corp. officer signing the filing has
personal liability for failure to identify the documents requested by the
form, we need to poll all those involved in the transaction.  To save you
time, why don't you call me, and I will give you the two minute synopsis of
the memo, so that you can confirm that you know of no responsive documents.
x35285.

	Michelle Cash@ECT
	11/16/2000 04:32 PM

		 To: Lou Stoler/HOU/ECT@ECT
		 cc: Ann Ballard/Corp/Enron@ENRON
		 Subject: Re: HSR Filing

Lou, based on our earlier conversation, I have not taken time to review
this.  Let me know if I should review it.  Thanks. Michelle

Lou Stoler on 11/14/2000 02:00:46 PM
To: Bill Williams III/PDX/ECT@ECT, Brian Kerrigan/HOU/ECT@ECT, Dan E
Williams/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, David Leboe/HOU/ECT@ECT,
Dolores Lenfest/HR/Corp/Enron@ENRON, Drew Kanellopoulos/NA/Enron@Enron, Fran
L Mayes/HOU/ECT@ECT, Frank Smith/Corp/Enron@ENRON, George
Schaefer/NA/Enron@Enron, Greg Blair/Corp/Enron@Enron, Ken Curry/HOU/ECT@ECT,
KWong@milbank.com, lmstoler@aol.com, Lou Stoler/HOU/ECT@ECT,
metring@enron.com, Michelle Cash/HOU/ECT@ECT, Morris Richard
Clark/HOU/ECT@ECT, Rhett Jackson/HOU/ECT@ECT, Rick
Johnson/HR/Corp/Enron@ENRON, Terry W Donovan/HOU/ECT@ECT, William
Keeney/HOU/ECT@ECT, Karen E Jones/HOU/ECT@ECT
cc: Ann Ballard/Corp/Enron@ENRON
Subject: HSR Filing

I previously sent to you Ann Ballard's memo re the HSR filing, and to date,
no one has responded.  Prior to making this filing which is a prerequisite
for closing, we need to hear back either way----please confirm this directly
to Ann at 713.853.5285.


Liz,

Here's the file.  Thanks for your help.

Kevin


The DPR for today is final and posted to the Executive Reports Viewer.

Please note that a revision to the DPR format has been made, effective today,
due to a change in organizational structure.  The "Enron North America,
Emerging Businesses" section, which includes Pulp & Paper Trading and Lumber,
has been removed and replaced by the "Enron Industrial Markets" section.

If you have any questions or concerns, please contact Mike Moscoso at
x-35242.


Peter,

I forwarded your resume with my recommendation to two
senior executives in our Transportation and Storage Group.

Vince


-----Original Message-----
From: Cook, Mary
Sent: Thursday, October 25, 2001 5:34 PM
To: Jones, Tana
Subject: FW: Texas Monthly (November 2001): How Enron Blew It

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

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

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

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

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

FYI - it is a good article

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

This is a long one - but definitely worth reading.

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

How Enron Blew It
Less than a year ago, the Houston-based energy behemoth had everything: money, power, glitz, smarts, new ideas, and a CEO who wanted to make it the most important company in the world. Now its stock is down, wall street is bearish, and the CEO is gone. What went wrong?

by Mimi Swartz < <http://www.texasmonthly.com/mag/issues/authors/mimiswartz.php>>
THE ENRON SKYSCRAPER NEAR THE SOUTH END OF HOUSTON'S DOWNTOWN feels like the international headquarters of the best and the brightest. The lobby in no way resembles the hushed, understated entryways of the old-fashioned oil companies, like Shell and Texaco nearby. Enron, in contrast, throbs with modernity. The people hustling in and out of the elevators are black, white, brown; Asian, Middle Eastern, European, African, as well as American-born. They are young, mostly under 35, and dressed in the aggressively casual uniform of the tech industry-the guys wear khakis, polo shirts, and Banana Republic button-downs. Almost preposterously fit, they move through the building intently, like winners. Enron is nothing if not energetic: A Big Brother-size TV screen frantically reports on the stock market near a bank of elevators, while another hefty black television relaying the same news greets people entering from the garage. A sculpture of the corporate symbol, an E tipped at a jaunty angle, radiates colors as it spins frenetically on its axis; a Starbucks concession on the ground floor keeps everyone properly caffeinated. Multicolored, inspirational flags hang from the ceiling, congratulating Enron on its diversity and its values; one more giant banner between elevator banks declares Enron's simple if grandiose goal: "From the World's Leading Energy Company to . . . The World's Leading Company!"

For a while, that future seemed guaranteed, as Enron transformed itself from a stodgy, troubled pipeline company in 1985 to a trading colossus in 2000. It was a Wall Street darling, with a stock price that increased 1,700 percent in that sixteen-year period, with revenues that increased from $40 billion to $100 billion. "The very mention of the company in energy circles throughout the world creates reactions ranging from paralyzing fear to envy," notes a 2001 report from Global Change Associates, a firm that provides market intelligence to the energy business.

This Enron was largely the creation of Jeff Skilling, a visionary determined to transform American business. Hired sixteen years ago as a consultant by then-CEO Ken Lay, Skilling helped build a company that disdained the old formula of finding energy in the ground, hauling it in pipelines, and then selling it to refineries and other customers. Instead, it evolved into a company that could trade and market energy in all its forms, from natural gas to electricity, from wind to water. If you had a risky drilling venture, Enron would fund it for a piece of the action. If you wanted your megacorporation's energy needs analyzed and streamlined, Enron could do the job. If you were a Third World country with a pitiful infrastructure and burgeoning power needs, Enron was there to build and build. Basically, if an idea was new and potentially-and fantastically-lucrative, Enron wanted the first crack. And with each success, Enron became ever more certain of its destiny. The company would be the bridge between the old economy and the high-tech world, and in February of this year, Skilling reaped his reward when he succeeded Lay as chief executive officer. Enron, says Skilling, "was a great marriage of the risk-taking mentality of the oil patch with the risk-taking mentality of the financial markets."

The Enron story reflects the culture that drove American business at the end of the twentieth century. Like the high-tech companies it emulated, Enron was going to reinvent the American business model and, in turn, the American economy. Maybe it was natural that this Brave New World also produced a culture that was based on absolutes: not just the old versus the new, but the best versus the mediocre, the risk takers versus the complacent-those who could see the future versus those who could not. The key was investing in the right kind of intellectual capital. With the best and the brightest, a company couldn't possibly go wrong.

Or could it? Today Enron's stock trades at around $35, down from a high of $80 in January. The press cast Enron as the archvillain of California's energy crisis last spring, and Skilling caught a blueberry pie in the face for his relentless defense of the free market. A long-troubled power plant project in India threatened the company's global ambitions. Telecommunications, in which Enron was heavily invested, imploded. Wall Street analysts who once touted the company questioned its accounting practices. Some of the change in Enron's fortunes can be attributed to the economic downturn in uncertain times that has afflicted all of American business. But the culture that the company created and lived by cannot escape blame.

ENRON, JEFF SKILLING SAYS, HAD "a totally different way of thinking about business-we got it." At Enron, in fact, you either "got it" or you were gone-it was as simple as black and white. It is not coincidental, then, that the color scheme of Skilling's River Oaks mansion mirrors the corporation he once headed. Here, the living room's white walls shimmer against the mahogany floors. Black leather trims the edge of snowy carpets. Billowy sofas set off the jet-black baby grand. In the entry, white orchids cascade from a black vase on a black pedestal table that in turn pools onto cold, white marble. There is only one off-color note: After almost twenty years, Jeff Skilling is no longer associated with Enron, having resigned abruptly after just six months as CEO. Once, Skilling was hailed as the next Jack Welch (General Electric's masterful CEO), as one of Worth magazine's best CEO's in America (anointed in 2001), and even as a daredevil who hosted the kind of unchained adventure junkets in which, a friend told BusinessWeek, "someone could actually get killed." Today, he sounds more like Ebenezer Scrooge on Christmas morning. "I had no idea what I'd let go of," Skilling says of all the personal sacrifices he made while retooling Enron.

From a black chair in the white library, across from a huge black and white photograph of his daughter and two sons, Skilling clarifies. The demands of working 24-7 for Enron caused him to ignore his personal finances. Divorced, he lived in a 2,200-square-foot house without a microwave or a dishwasher. He almost missed his brother's wedding. "Learning a foreign language-I never learned a foreign language!" he exclaims. He never once took his youngest son to school. "I'm interested in the kids. You don't do kids in fifteen-minute scheduling." Travel: "You can't go to Africa for a week and get anything out of it!" Skilling includes the study of architecture and design on his list of missed opportunities, then he stops and sighs. "I'm not sure that fulfillment in life is compatible with a CEO's job," he says, finally. Then his eyes lock on mine, and his voice, which had softened, regains its pragmatic edge. "It would have been easy to stay," he says. "But that would not have been good for me."

He's a smallish, ruddy-faced man who keeps himself at fighting weight, handsome in the way of corporate titans, with piercing cheekbones and that assiduously stolid gaze. But the impatience Skilling once reserved for cautious underlings and dull-witted utility company executives is now targeted at reporters who have labeled his resignation "bizarre" and associates who are bitterly skeptical of his need for family time. His shrug stretches the limits of his shimmering blue button-down, and his matching blue eyes look put upon. "I'm surprised," he says, "that people have so much trouble understanding this."

PEOPLE WHO PASSED THROUGH DOWNTOWN HOUSTON in the late eighties or early nineties couldn't help but notice a funny and, for its time, novel scene unfolding throughout the workday at the base of the Enron Building. From nine to five and before and after, you could see people slipping out of the pristine silver skyscraper to smoke. They perched on the chrome banisters or lurked near the glass doors at the entry, puffing like mad. They always looked hurried and furtive, even ashamed. Whatever people knew about Enron in those days (and most people didn't know much), it was often associated with that scene: Enron boasted one of the first nonsmoking corporate headquarters in Houston, and there couldn't have been clearer evidence of its break with the energy world of the past. What macho engineer would have put up with such humiliation?

But this company was a child of another time, that period in the mid-eighties when chaos enveloped the gas business. Federal deregulation of natural gas turned a steady, secure industry, in which gas pipeline companies frequently enjoyed a monopoly in portions of the areas that they served, into a volatile free-for-all. The situation was compounded five years later by federal deregulation of the pipeline business. So it happened that a gentlemanly gas pipeline company, Houston Natural Gas (HNG) found itself under attack from Coastal Corporation, Oscar Wyatt's less than gentlemanly firm. HNG was then run by Lay, a sturdy, taciturn former economics professor and Transco chief operating officer who had a passion for military strategy. (His doctoral thesis at the University of Houston was on supply and demand in the Vietnam War.) Lay, who was from Missouri and never succumbed-at least outwardly-to Texas brashness, had done well enough: Thanks to canny expansions, HNG's pipelines stretched from Florida to California and throughout the state of Texas.

HNG fended off Coastal, but to protect the company from other takeover attempts, Lay nimbly engineered the sale of HNG in 1985 to a friendly Nebraska pipeline concern called InterNorth, one of the largest pipeline companies in the country at the time. Then, a funny thing happened: HNG started acting in a way that would characterize the company for years to come-a lot like Coastal. What the Nebraskans blithely labeled "the purchase" was being called "the merger" back in Houston, and before long, following some particularly brutal politicking between Omaha and Houston, the company's center of gravity started shifting toward Texas, and shortly after that, Ken Lay was running a new company called Enron. "Over time it became clear that Lay had a better vision of the future," says one person associated with Enron at that time. "He never fought change. He embraced change."

Lay had won, but what exactly did that mean? Enron was saddled with massive debt from the takeover attempt, and thanks to deregulation, no longer had exclusive use of its pipelines. Without new ideas-for that matter, a whole new business plan-the company could be finished before it really even got started.

LIKE MANY PEOPLE WHO TEAMED UP WITH ENRON IN THE EIGHTIES, Jeff Skilling had spent a lot of time in the Midwest, and he was self-made-at fourteen he had been the chief production director at a start-up TV station in Aurora, Illinois. (His mother would drop him off there every day after school.) "I liked being successful when I was working, and I was smart," he told BusinessWeek earlier this year. But unlike many of his Enron colleagues, Skilling wasn't deliberate and soft-spoken and happy to go home at five o'clock; he was anxious and excitable, and nothing, but nothing excited him more than what he would come to call "intellectual capital." He loved being smart, and he loved being surrounded by smart people. He graduated from Southern Methodist University, went into banking-assets and liability management-and took on Harvard Business School, where he graduated in the top 5 percent of his class. Then Skilling took the next step on what was then the new, souped-up path to American success: He joined Manhattan's McKinsey and Company as a business consultant, and that is where Ken Lay found him in 1985.

It is often said of Lay that his instincts for hiring the best are flawless, and his choice of Skilling probably saved the company. Skilling was above all an expert at markets and how they worked. While everyone else was worrying about the gluts and the shortages that defined the gas industry, he alone saw the parallels between gas and other businesses. And so in a world where credit was nearly impossible to come by, Skilling came up with what he called the Gas Bank, which contractually guaranteed both the supply and the price of gas to a network of suppliers and consumers. Enron would not be a broker but a banker. It would buy and sell the gas itself and assume the risk involved. And Enron would make money on transactions, much like an investment bank would.

Skilling worked up some numbers and found them "absolutely compelling." Then the McKinsey consultant took the idea to a meeting of about 25 Enron executives. He had a one-page presentation. "Almost to a person," Skilling says, "they thought it was stupid." Almost. After Skilling left the meeting dejected, he walked Ken Lay to an elevator and apologized. Lay listened and then said, "Let's go."

The Gas Bank was not an overnight success. For months Skilling woke up in a cold sweat, sure he had ruined not only his career but the careers of dozens of colleagues who had assisted him. In fact, he had come upon one of those divides that seem to define his life: "I believed this whole world would be different, a huge breakthrough" is the way Skilling puts it today, and even if he is typically immodest, he was right. Fairly soon after launching, the company sold $800 million worth of gas in a week. True to Skilling's character, success turned out to be a matter of old versus new: He says the joke around Enron was that if a company's CEO was under fifty, "We were in." And he was in too: In 1990 Skilling finally left McKinsey and joined Enron as the head of Enron Finance Corporation, a new division created just for him. In 1991 that company closed a deal that earned $11 million in profit. After that, says Skilling, "we never looked back."

Skilling and Lay also realized that the Gas Bank couldn't work unless it had a trading component. Myriad trades were needed to build the market that would make the project go. But by buying and selling enormous quantities of gas, Enron not only constructed a market but almost instantly came to dominate it. The company had the best contacts, the best intelligence, and the best access to supplies. That, in turn, attracted more customers who wanted to be part of the play. With so many customers in its pocket, Enron could better predict the direction of the market and could use that knowledge to make trades for its own benefit-Enron could in effect bet on which way the price of gas would go, as one might do with pork bellies or soybeans, but with startling accuracy, thereby generating profits higher than anyone could have ever imagined.

THIS CHANGE COULD NEVER HAVE OCCURRED without another change Skilling had made: He created, within Enron, a new culture to match its new trading business. The idea was to build a "knowledge-based business," which demanded a skill set not exactly prized by Enron's employees from the old HNG days. Most were deliberate, cautious, responsible, somewhat defensive people, most of them men, of course-the kind of people you'd expect to find working in an industry regulated by the federal government. But now the company needed bolder people for its bold new era: that included anyone who wanted to make money-lots of money-for themselves and for the company. "Enron was going to create a niche for itself or die," one former executive explains. "The people who had narrow views eventually were forced out, because if they had narrow views about other things, they had narrow views about the market."

Skilling wanted smart people but not just any smart people. He wanted the smartest people from schools like Harvard, Stanford, and maybe, Rice. And because his firm was now acting more like a bank than a pipeline company, he wanted to draw from the pool of recruits that would be attracted to the biggest and best investment banks, like Merrill Lynch or Credit Suisse First Boston. In addition to being smart, Enron people were also supposed to be "aggressive." You were right for Enron if you didn't want to wait until you were thirty to close your own deals or move up in an organization.

You could see what he was looking for on "Super Saturdays" at the Houston headquarters: eight fifty-minute interviews with ten minute breaks in between-the company might herd as many as four hundred people through in just one day. They were scored from 1 to 5 on their smarts, their problem-solving ability, their passion for hard work, and what at Enron was called "a sense of urgency." People who scored less than 2.5 were scratched. The shrewdest candidates knew how to work Enron before they were even hired: These were the types that automatically turned down the company's first offer, knowing Enron would come back with more. The starting salary was around $80,000. Maybe it wasn't a fortune-yet-but the signing bonus, about $20,000, was more than enough for a lease on the obligatory Porsche Boxster or one of the lofts being renovated close to downtown. (Enron people didn't live in far-flung suburbs. Suburbs were uncool and too far from the office.)

For the lucky winners, Enron offered the corporate equivalent of a gifted-and-talented program. New associates learned the latest techniques for structuring energy deals, and there were rotations at Enron offices around the globe. The hours were long, but every possible need was taken care of. A company concierge handled all the things important people couldn't be bothered with: picking up dry cleaning or prescriptions, shining shoes, cleaning the house, planning a vacation. Of course, a lot of people who worked for Enron never got to take vacations-they were too busy making money-but they could use the company gym and the company's personal trainers. If they were overweight or wanted to quit smoking, they could join Enron's Wellness Program. Massages were offered six days a week, from seven in the morning until ten at night. "They were so cutting edge," rhapsodizes someone involved with the company health care program at the time. "They really thought about the psychology and what it took to keep these people going."

Skilling handed out titles analogous to those at Wall Street firms-analysts, associates, directors, and managing directors-but everyone knew that those titles didn't really matter. Money did. Instead of competitive salaries and decent bonuses, Enron offered competitive salaries and merit-based bonuses-with no cap. "If you really worked hard and delivered results, you could make a lot of money," says Ken Rice, who stayed with Enron for 21 years until resigning recently as the head of the company's faltering broadband division. Or, as the saying goes, you got to eat what you killed. Gas traders with two or three years of experience could wind up with a $1 million bonus. And the more you produced, the closer you got to Jeff: Real hot dogs joined him glacier hiking in Patagonia, Land Cruiser racing in Australia, or off-road motorcycling in a re-creation of the Baja 1,000 race, ending at a spectacular Mexican villa. "Every time he'd speak, I'd believe everything he'd say," one loyalist says.

And why not? By 1995 Enron had become North America's largest natural-gas merchant, controlling 20 percent of the market. But at a company where the buzzword was "aggressive," that was no place to stop: Skilling and Lay believed the Gas Bank model could easily be applied to the electricity business. Firmly committed to the notion that a deregulated market meant better service at lower prices for consumers (and untold profits for Enron), they began barnstorming the country, pressing their case with entrenched power company presidents (who, with their multimillion-dollar salaries and monopoly service areas, had little incentive to change) and energy regulators (who were somewhat more receptive, thanks in part to Enron's generous lobbying efforts).

But the biggest winner of all was probably Jeff Skilling. In 1997 Ken Lay made him the president and chief operating officer of the company. By then, the division known as Enron Capital and Trade Resources was the nations largest wholesale buyer and seller of natural gas and electricity. The division had grown from two hundred to two thousand employees, and revenues from $2 billion to $7 billion. "Mr. Skilling's experience so far with the turmoil in the industry has convinced him that he is on the right track," the New York Times noted. Everyone would certainly have thought so: Enron and Skilling had totally transformed one industry and were well on their way to transforming another.

"FIRING UP AN IDEA MACHINE; Enron Is Encouraging the Entrepreneurs Within," sang the New York Times in 1999. "In the staid world of regulated utilities and energy companies, Enron Corp is that gate-crashing Elvis," crowed Fortune in 2000. Wall Street was demanding tech-size growth on a tech timetable, and Enron, in 2000, obliged with second quarter earnings of $289 million, up 30 percent from the previous year. That year the company seemed to discover a market a minute: Under Skilling, Enron was trading coal, paper, steel, and even weather. No one blinked when a London wine bar became an Enron client. People drank more in warm weather than cold, so why not buy a hedge against the usual winter downturn?

But most exciting to the financial world was Enron's entry into high-tech communications. Because of the company's marketing dominance, EnronOnline became another overnight success, handling $335 billion in commodity trades online in 2000. Enron, as usual, made its money on the spread between the bid price and the asking price. Then there was the broadband business: To Enron, trading excess capacity in large, high-speed fiber-optic networks (empty lanes on the fabled information highway) wasn't that different from trading the capacity of natural gas pipelines. So Enron created a market for what the industry calls bandwidth. Soon after, it also announced a twenty-year deal with Blockbuster to deliver movies on demand electronically to people in their homes. Enron looked like a company that couldn't lose. "Its strategy of building businesses, shedding hard assets, and trading various commodities can help it do well even in an uncertain market," BusinessWeek insisted.

There was, however, another reason Enron did so well in such a short time: the company's hard-nosed approach toward its customers. The old notion of customer service was based on the long haul-you had to nurse and coddle customers to keep them. But Enron had new markets and new ideas-customers had to come to it. Over time, the company stopping referring to its business clients as customers and began calling them "counterparties."

Skilling wanted the biggest profits on the shortest timetable: Gains were maximized by creating, owning, and then abandoning a market before it became overtaxed and overregulated. So if you wanted to launch a high-risk venture quickly-such as Zilkha Energy's new high-tech approach to drilling for oil-you got your financing from Enron because a bank would take forever to underwrite the project, if it ever would. But because Enron invented its markets and subsequently dominated them, Enron could set the terms of its deals, from the timeline to the method of accounting to whether the deal happened at all.

While many businesses used what was known in the industry as "mark-to-market accounting," for instance, Enron used it on an unprecedented scale. The company priced their deals at current market value-but it was always Enron's idea of the market value; companies that balked at their pricing didn't get deals. And while old-fashioned companies spread their profits out like annuities over a period of years, Enron took most of its profit up-front. However many millions would be made on a deal that covered several years, they went on the books in the current year. If a few analysts thought there might be something fishy about what they called "subjective accounting," investors didn't particularly care as long as the profits rolled in. As the market fluctuated and the landscape changed, the company might abandon a project that had been in the works for months because its profit margins weren't going to be high enough. "Enron is known for leaving people at the altar," says one former employee. Winning the highest possible profits for the company could even extend to Enron's attitude toward charity. When a fundraiser for the Houston READ Commission, a literacy group, called on Enron for a contribution, it was suggested that he start raising money for Enron's competing literacy charity: "Even the person who was supposed to give money away for Enron was supposed to make money for Enron," he says.

As Enron became more and more successful, the culture Skilling had created took on a dark side: The competition turned inward. As one member of the Enron family put it, "It became a company full of mercenaries." The change started at the bottom. As Enron's domination of the energy market grew, most of the recruiting frills fell away. New associates were treated much like the commodities the company traded. Global Change's Enron spies reported overhearing orders like "I need a smart person-go buy me one" or "Buy me an intelligent slave, quick." Enron had never been the kind of place where people sang to you on your birthday, but now the workaholism bordered on self-parody: A Random Acts of Kindness program lasted only a few months. It was too disruptive. People couldn't get their work done.

And, of course, Enron had a program for institutionalizing creative tension. The Performance Review Committee, which had initially been installed by Skilling in the Capital group, became known as the harshest forced ranking system in the country. Employees were rated on a scale of one to five, and those with fives were usually gone within six months. (The PRC's nickname quickly became "rank and yank.") It was a point of pride that Skilling's division replaced 15 percent of its workforce every year. As one Skilling associate put it, "Jeff viewed this like turning over the inventory in a grocery store." Skilling's approach to business-get in and get out-had become Enron's attitude toward its workers. In time, it would become many workers' attitude toward the company. Teamwork, never that valuable in a trading culture, went the way of the eyeshade and the abacus. If protocol required an Enron higher-up to come from Europe to help with a project in the Third World, he might help-or he might not, depending on whether another, potentially more lucrative project was pending elsewhere.

Everyone felt the pressure to perform on a massive scale at massive speed: "They were so goal oriented toward immediate gratification that they lost sight of the future," says one former employee. Anyone who couldn't close deals within a quarter was punished with bad PRC scores, as were the higher-ups who had backed them. Past errors and old grudges were dredged up so often as new ammunition in PRC meetings that the phrase "No old tapes" became an Enron clich?. "People went from being geniuses to idiots overnight," says one former Enron executive.

In such a hothouse, paranoia flowered. New contracts contained highly restrictive confidentiality agreements about anything pertaining to the company. E-mail was monitored. A former executive routinely carried two laptops, one for the company and one for himself. People may have been rich at Enron, but they weren't necessarily happy. One recruiter described the culture this way: "They roll you over and slit your throat and watch your eyes while you bleed to death."

BEFORE JEFF SKILLING COULD TRANSFORM ENRON from the world's leading energy company into the world's leading company, he had to make one more change: Just as he had done ten years before, Skilling had to purge the company of its remaining old order. Where Enron once prized cautious executives who dealt with tangible assets like pipelines, it now valued bold executives who dealt with intangible assets. Pipelines, power plants-they may have been Enron's pride, but Skilling wanted them gone. Expensive, long-term building projects had no place when Wall Street was devoted to quick profits and enormous returns on investment capital, and Skilling knew it. "It wasn't the time for long-term approaches," an Enron executive says of Wall Street's mood. "It was the technology era."

To rid Enron of the last vestiges of its past, Skilling had to take on Rebecca Mark, long considered his rival for the CEO's job. Mark was for many years the poster child for the Enron way: Young, attractive, aggressive-her nickname was Mark the Shark-she came from sturdy Midwestern stock but had the requisite Harvard MBA. Mark was largely responsible for the success of Enron International, the asset-heavy side of the company where she developed $20 billion worth of gas and power plants, which accounted for 40 percent of Enron's profits in 1998. For this she reaped breathtaking compensation-one Enron executive estimated $10 million-and adoring press clips, including two appearances on Fortune's list of the fifty most powerful women in corporate America.

But then Mark ran into trouble with a gas-fired power plant in Dabhol, India, one of the largest ever constructed. She had played the game the Enron way: Taking Enron into a new market, she had finagled low import taxes (20 percent instead of the usual 53) and hung in through 24 lawsuits and three changes in government. But the time and expense needed to make India and other Enron plants around the globe successful did not mesh with Enron's goals, and Skilling's impatience with Mark grew.

Forcing Mark out, however, was no easy matter. Key executives left, divisions were dismantled, but she remained. The truth was Enron didn't mind firing lower-level employees, but it hated to fire the kind of aggressive, relentless people it tended to promote. The company preferred humiliation-keeping a director in his cubicle, say, but failing to include him in the glamour deals, or kicking someone upstairs with a fancy title. (One particularly difficult executive won a few years at graduate school, gratis.) A company as smart as Enron could probably deduce too that dispatching one of the most visible businesswomen in the country would provoke a public-relations disaster. So Lay and Skilling did something classically Enronian: They gave Mark her own company. Despite Skilling's contempt for asset-heavy businesses, Enron spent more than $2 billion to buy a run-of-the-mill British water utility that could serve as Enron's entry into the emerging world of water privatization. Mark was put in charge of making Enron, yes, the world's greatest water company. Azurix, as the new business was called, looked like another sure thing: Its IPO in 1999 raised $695 million.

But Mark had to succeed on Enron's increasingly abbreviated timetable in a business fraught with political and emotional complexities. Water is not like gas or electricity-owners and governments are a lot less willing to give it up, even for lots of money. The company stumbled, layoffs commenced, and confidence evaporated. By August 2000 the stock price, which had started out at $19, had fallen to $5. Mark's resignation followed, and Azurix, much diminished, was folded into Enron. "I think it's best for Rebecca to start afresh," Lay, who had been a mentor to Mark, told the Wall Street Journal. Or as one critic put it, "They were more interested in destroying the old culture than running a business."

As 2000 drew to a close, Skilling was in total command. In December Ken Lay announced the inevitable: "The best time for the succession to occur is when the company is doing well," he told the press. "Enron is doing extremely well now." In February 2001 Jeff Skilling took over the CEO's job.

ALMOST IMMEDIATELY THE TROUBLE STARTED. Enron's domination of the electric-power market made it an instant target in the California deregulation debacle. Both PBS's Frontline and the New York Times took on Enron, portraying the company as a heartless colossus that used its influence in Washington (Lay and Enron's political action committee are the top contributors to George W. Bush) to force old people on fixed incomes to choose between buying food or electricity. Skilling and Lay appeared on camera singing belligerent anthems to the free market, while another memorable scene juxtaposed one of the company's jackallike traders against a hapless state employee in California, as both tried to buy power online. The Times reported that Lay had tried to persuade a new federal commissioner to change his views on energy deregulation. The bad press was, to say the least, ironic: Just as the media was pounding Enron for its omnipotence, Wall Street was discovering its weaknesses. By late March the stock price had slid to $50 a share from $80 in January.

Within Enron, the asset-based divisions took the rap for the decline. (The India plant continued to be enormously costly, at least in part because of constant turnover within Enron's management team.) But the California situation was more visible and therefore more damaging, despite Enron's claim that the state had never built enough power plants to service its population and never properly managed those it had. "For three months Gray Davis did a very good job of blaming us," says Mark Palmer, a vice president for corporate communications. "We were a Texas company. There was a Texan in the White House. California was a state that didn't put him in office, and his biggest contributor was a Texas energy company. Performance is going to take care of our stock price. The truth will take care of Gray Davis." (California utilities still owe Enron $500 million, another reason stockholders might be panicky.) But more problematic than the crisis itself was Skilling's all too apparent lack of contrition. Facing down his critics, he cracked a joke comparing California with the Titanic. ("At least the Titanic went down with its lights on.")

But the biggest problem was Enron's telecommunications division, which had been responsible for at least one third of its heady stock price. Investors believed that Enron could revolutionize high-speed communications, just as it had revolutionized gas and power. Enron estimated the global market for buying and selling space over fiber-optic cable would grow from $155 billion in 2001 to $383 billion by 2004-but then the tech bubble burst. So too did the much-hyped movies-on-demand deal with Blockbuster. For the first time in its confoundingly successful life, Enron had nothing new to take to market. Like the popular high school girl who suddenly packs on a few pounds, Enron suddenly looked less alluring to Wall Street.

Skilling launched a campaign to keep Enron's most important cheerleaders, the stock analysts, in the tent, but he wasn't cut out to be a supplicant. During the reporting of first quarter profits, he called an analyst who challenged Enron's financial reporting an "asshole." When the company reported hefty second quarter profits, many analysts questioned whether those profits had come from the generation of new business or from the sale of old assets. Ignoring the growing chorus critical of Enron's accounting, Skilling promised, as he always had, that innovations were just around the corner. "There wasn't any positive news," Carol Coale, of Prudential Financial, says now. "Basically, he talked me out of a downgrade."

The business press, so generous in the past, turned surly. Fortune had asked in March whether Enron was overpriced. ("Start with a pretty straightforward question: How exactly does Enron make its money?") The routine cashing in of stock options that were about to expire by key executives was portrayed in the media as a fire sale. (Skilling had sold $33 million worth, Ken Lay and Ken Rice close to four times that amount.) Then the Wall Street Journal reported on a fund run by the CFO that had been a source of strife within the company. (It was essentially risk management against Enron's possible failures.) Every negative story seemed to produce a concurrent drop in the stock price: By late August it had fallen below $40. Enron, so institutionally unforgiving, finally got a taste of its own medicine. "When Wall Street is in love with a stock, they're forgiving of something like accounting," says Carol Coale. "When a company falls out of favor, all these issues carry more weight."

This fact was not lost on people inside the company, who suddenly started experiencing an attack of conscience. Those who had looked the other way as the most powerful Enron executives dumped their wives and married their secretaries or carried on flagrant interoffice affairs now saw the error of their ways. "It just created an attitude," one executive still at Enron says. "If senior people are doing that, why are we held to a higher standard? There was a real culture of 'We're above everyone else.'"

Loyalty had never been prized at Enron, so there was no reason to expect it now. An old-fashioned, slow-moving company like Exxon could demand hardship duty in Baku with the promise of greater rewards down the road. "But," as one Houston oilman explains, "if you have to negotiate a hardship duty with someone who doesn't have loyalty and has money, then you have a corporation that's better suited for good times than bad."

As it turned out, that description applied to Jeff Skilling too. As the stock price stubbornly refused to ascend, he made no secret of his unhappiness and frustration. Then, after a trip to visit the families of three employees killed at a plant in England, he had an epiphany: Life was short; for him, Enron was over. Ever stoic, Ken Lay returned to the CEO's office, named a new president, arranged a trip to New York to calm analysts and investors, and promised a kinder, gentler Enron in the future. Trading anything and everything was out. The company, Lay says, will still innovate but "innovate much closer to our core." As for the culture: "Things like the Performance Review Committee, I think we could have applied better. By trying to categorize people into so many different categories, you ended up creating a morale problem."

That Skilling's supposedly brilliant colleagues were as shocked at the news of his departure as the rest of the business community may be testament to their lack of emotional intelligence. Despite Skilling's lengthy tenure with Enron, he'd always been contemptuous of the long haul; he'd always believed in cutting losses and moving on. But now that he was abandoning them when the company was in trouble, it was different. "Even Jeff's biggest detractors wouldn't have wanted him to walk out the door," one loyalist admits.

But on the day we meet, Skilling is looking forward, not back. "Look," he says with finality, "ninety percent of my net worth is in Enron. Were my interests aligned with the shareholders? Absolutely."

Free of falling stock prices and shareholder pressures, he is nestling himself back into the world of ideas. His eyes flash as he talks about new technologies. "The first wave never gets it right," he says. "The stand-alone dot-coms didn't work, but the technological applications will create a second wave that will change the world." Houston, he promises, will become the world's center of commodity trading, and he intends to be a part of it. In fact, he is already shopping for office space.

"This is the second wave, and Enron's got it," he says, almost breathless. "There are thousands of people running around the streets of Houston that get it."


Traveling to have a business meeting takes the fun out of the trip.  Especially if you have to prepare a presentation.  I would suggest holding the business plan meetings here then take a trip without any formal business meetings.  I would even try and get some honest opinions on whether a trip is even desired or necessary.

As far as the business meetings, I think it would be more productive to try and stimulate discussions across the different groups about what is working and what is not.  Too often the presenter speaks and the others are quiet just waiting for their turn.   The meetings might be better if held in a round table discussion format.

My suggestion for where to go is Austin.  Play golf and rent a ski boat and jet ski's.  Flying somewhere takes too much time.


We agree

"Eileen Ponton" <kponton@duke-energy.com> on 03/16/2001 10:11:53 AM

To:   David Avila/LSP/ENSERCH/US@TU, Charlie Stone/Texas Utilities@TU, Melissa
      Jones/Texas Utilities@TU, HPL.SCHEDULING@ENRON.COM,
LIZ.BELLAMY@ENRON.COM
cc:
Subject:  NOMS / ACTUAL FLOW FOR 03/15

DATE      NOM       FLOW - MCF           FLOW - MMBTU

3/15      60,000         59,386               60,989

BTU = 1.027


The following reports have been waiting for your approval for more than 4 days.  Please review.

Owner: V. Charles Weldon
Report Name: CWeldon 101901
Days In Mgr. Queue: 5


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		Only available to residents of the U.S., Puerto Rico and the U.S. Virgin Islands. Travel Values Plus is owned and operated by webloyalty.com. All trademarks and or copyrights are the property of their respective owners, and unless otherwise noted, Travel Values Plus is not affiliated with the respective owners. Gas benefit not available for gasoline purchases made in New Jersey. ?2000, Travel Values Plus

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