Re: Resuming Financial Risk Management Opportunity in Guam

Janice:

Sorry for the delay in getting back to you - Elizabeth is now working in the
power trading area and Sara has been out of town.

I agree with you that the letter seems harmless enough and I wouldn't blame
the commercial folks for being upset if it looks like GS is trying to do and
end-around on the process. Yes - let's send it and get an opportunity to
participate in offering the products.

Mark

Janice Moore
05/19/99 05:02 PM
To: Elizabeth Sager/HOU/ECT@ECT, Sara Shackleton/HOU/ECT@ECT
cc: Mark - ECT Legal Taylor/HOU/ECT@ECT, David A
Terlip/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
Subject: Re: Resuming Financial Risk Management Opportunity in Guam

I've been asked by the EI team whether they can send this letter (all the way
at the bottom of these notes) to the client this week. In order to get this
out by Friday morning in Guam, it has to be done on Thursday close of
business Houston time. Is there any chance that we could accomplish this?
Please advise.
---------------------- Forwarded by Janice Moore/HOU/ECT on 19.05.99 17:00
---------------------------

Janice Moore
18.05.99 12:14
To: Elizabeth Sager/HOU/ECT@ECT, Sara Shackleton/HOU/ECT@ECT
cc: Mark - ECT Legal Taylor/HOU/ECT@ECT
Subject: Re: Resuming Financial Risk Management Opportunity in Guam

A year ago, we looked at a proposal from Guam asking for help w/ price risk
management on their fuel oil purchases. We concluded then that Guam was
really looking for an advisor, so we declined to participate in their
tender. Goldman, Sachs apparently won that bid. Now, however, it looks like
they're interested in the products we have to offer, so the EI people would
like to send the attached letter (all the way at the bottom of these notes)
to be sure Enron is invited to the table. The draft letter seems harmless
enough, but I thought that the person in your group who will be supporting
this effort might like to review it before it's sent. The letter is set up
for Kevin Beasley's signature, but the ECT organization has changed since
then, so I can look into who that would be at this point.

I would appreciate it if you could copy me on your responses to the EI folks,
so I can keep up w/ them. Thanks for your help.

---------------------- Forwarded by Janice Moore/HOU/ECT on 18.05.99 12:07
---------------------------
David A Terlip @ ENRON_DEVELOPMENT 17.05.99 17:34

To: Manuel P Gallego@ENRON_DEVELOPMENT
cc: Victor Santos/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Bruce
Lundstrom/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Janice Moore/HOU/ECT@ECT
Subject: Re: Resuming Financial Risk Management Opportunity in Guam

Manuel,

I have forwarded this to Janice since it involves ECT. She will review and
talk to trading. Let's hold off until she responds.

David

From: Manuel P Gallego on 05/17/99 08:49 PM
To: David A Terlip/ENRON_DEVELOPMENT, Victor Santos/ENRON_DEVELOPMENT, Bruce
Lundstrom/ENRON_DEVELOPMENT
cc:

Subject: Resuming Financial Risk Management Opportunity in Guam

Team:

Please review and finalize the attached draft to GEDA. I spoke with Lisa
Taitano of GEDA today and she indicated that GEDA or GPA may bid out a
financial risk management contract around next month. However, Goldman
Sachs, who is currently the risk manager, also appears to be manipulating the
process such that it would transition from a risk manager to the provider of
the financial products--which would explain the third paragraph in the
attached draft.

Goldman Sachs is saying that they would forfeit the fees associated
with their role as a risk manager in exchange for negotiating the financial
risk management contract.

Best regards,
Manuel

- geda1.doc