Larry:
Hope all is ok with your current situation. I hope you know you can take a=
ny time off necessary to deal with the matter. =20
=20
Congrats on the great deal Monday and I appreciate the heads up before tran=
sacting that size deal.
=20
I'm sorry you missed the mtg monday afternoon. I want to sum up what my th=
oughts are and what I've learned over the past couple days. First of all, =
I'm very disappointed in some of the current but mostly former employees of=
this company. I think we, in gas trading, have made great efforts to crea=
te a very strong and profitable franchise without ever compromising our int=
egrity.=20
While I do not believe any fraud nor illegal activity has occurred, I do be=
lieve Enron pushed the gray area more than was necessary in some of these d=
ealings. And while I don't believe Fastow acted unethically or inappropria=
tely in these dealings (and I may be wrong), I do think the presence of a c=
onflict of interest and the appearance of impropriety should have precluded=
him from these entering into these transactions. There is a reason why En=
ron employees are not allowed to trade energy commodities for their own acc=
ount. It is not because Enron does not trust its employees to do the right=
thing; it is an effort to prevent even the slightest allegation that an em=
ployee's first and foremost responsibility is not to the company. That is =
where, in my opinion, Fastow errored. =20
I think employee morale has been damaged for 3 reasons over the past year. =
First, we are tired of bad business deals: India, South American assets, A=
zurix, broadband, etc. Second, over this period of poor business judgment,=
some of the same individuals who made these decisions were very well compe=
nsated. Third, I think there is a concern about the integrity of the organ=
ization and the top managers. Rather than worry about the past, I prefer t=
o look at the organization going forward. The truth about the LJM matter w=
ill be brought forward through one or more of the following : legal courtro=
om, SEC investigation, internal Enron investigation, court of public opinio=
n, court of Enron employees' opinion, and investigative journalism. If any=
officers of the company acted inappropriately at any time, I can almost gu=
arantee they will not have a future at this company. I say that because I =
do believe in the current management. The question you, as well as other e=
mployees need to be asking themselves, is twofold. First, will the current=
problems affect the organization's abililty to conduct business in the fut=
ure? And second, has the culture of the organization changed over the past=
several years whereby these probems will not happen again? As long as we=
can maintain our credit rating, which I believe we can, I believe this wil=
l have minimal effect to the trading business and little effect on Enron's =
business. Our desire to conserve capital at this point to shore up the bal=
ance sheet means we won't be buying any hundred million dollar+ assets in t=
he near future, which is probably a good thing. The second question is jus=
t as important. I will tell you honestly that had the management of this c=
ompany of 2 years ago be in place today, I would not currently be an employ=
ee here. Over the past couple years, the management turnover has been extr=
emely beneficial. Gone are Pai, Hannon, Rice, Skilling, Sutton, etc. that=
had, with the exception of Skilling, limited intellectual ability, integri=
ty, and drive. The new management of Whalley, Lavorato, Sheriff, Fallon, a=
nd Delainey, in my opinion, is one of the most capable management teams in =
business today. These are people that will make the right business decisio=
ns and are not afraid to act as individuals. I do believe in this team and=
, so long Enron treats the trading organization well at the end of the year=
which I have no reason to believe otherwise, intend to continue our missio=
n to create the most dominant energy trading franchise around. =20
We all want to yell at someone for the debacle that has been created. Unfo=
rtunatley, most of those people arent at the company anymore. I do encoura=
ge you to go to the employee mtg tomorrow regardless of market conditions. =
Enron values and needs your contributions, and thus it is important to me =
that you are comfortable with the organization going forward. I think it i=
s benficial to hear Enron's side of the story as well as what we read in th=
e paper. =20
John