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Page 1 of 58
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It

Conducti of
Business Affairs

EC 38015892

  s
3ry, 1998 ;

EXH012-03040

GOVERNMENT
EXHIBIT
  2591
  Crim. No. H-04-25 (S-2)




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Page 2 of 58
=============

S

Index

Page

a

Foreword	2
How to Use This bookl_t	3
Securities Trades by	
Company Personnel	4
Business Ethics	9
Information Security	10
Safety	12
Confidentiality, Ownership, and	
Protection of Information	13
Use of Communication	
Services and Equipment	18
Internet Security	29
Governmental Affairs	
and Political Contributions	37
Consulting Fees, Commissions,	
and Other Payments	39
Compliance with the Foreign Corrupt	
Practices Act	41
Compliance with Antitrust Laws	42
Compliance with Environmental Laws	45
Investments and Outside Business	
Interests of Officers and Employees	48
Responsibility for Reporting	51
Compliance; Administration	53

EC 38015893

EXH012-03041



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=============

foreword

As officers and employees of Enron Corp., its subsidiaries, and itc
affiliated companies, we are responsible for conducting the business
affairs of the companies in accordance with all applicable laws and
in a moral and honest manner.

To be sure that we understand what is expected of us, Enron has adopted
certain policies, with the approval of the Board of Directors, which are set
forth in this booklet. I ask that you read them carefully and completely
and that, as you do, you reflect on your past actions to make certain that
you have complied with the policies. It is absolutely essential that you
fully comply with these policies in the future. If you have any questions,
talk them over with your supervisor, manager, or Enron legal cour.;e:.

We want to be proud of Enron and to know that it enjoys a reputation for
fairness and honesty and that it is respected. Gaining such respect is one
aim of our advertising and public relations activities, but no matter how
effective they may be, Enron's reputation finally depends on its people, on
yc:- and 'n .'Lt':, :;cep tha::eFL;:.S,)n.l-dgh.

January 30,1998


Kenneth L. Lay
Chairman and Chief
Executive Officer



EC 38015893.1

EXH012-03042


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Page 4 of 58
=============



  How to Use this Booklet

Enron has long had a set of written policies deatihtg with rules of conduct
to be used in conducting the business affairs of Enron Corp., its
sulls&diaries. and its affiliated comparies (cot1ectively the "Company"). It
is very important that you uiderstand the scope of those policies and
learn the details of every one that relates to your job.

In order to do this, please take the fol'.owing steps:
  1. Carebilly read the summaries of each of the Enron policies
in this booklet;
2. If you have a concern or question, talk it over with your
supervisor, manager, or Enron legal counsel; and/or
  3. Report your concerns or possible violations to the Enron Corp.
Compliance Officer as described in the section on Responsibility
inr Re..ortine at pare 51 of this booklet.

Enclosed with this booklet is a Certificate of Compliance to be signed
by yo, i as a statement of your personal agreement to comply with the
policies stated herein during the term of your employment with the
Company. Please carefully review this booklet, then sign and return
the Certificate of Compliance to Elaine V. Overturf, Deputy Corporate
Secretary and Director of Stockholder Relations, Enron Corp.

These policies are not an employment contract. Enron does not create
any contractual rights by issuing these policies.

The Company reserves the right to amend, alter, and terminate policies
at any time.

EC 38015894

3



=XH012-03043



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Page 5 of 58
=============

Securities Trades By Company Pei sonnel

No director, officer. or employee of Enron Corp. or its subsidiaries or its
affiliated companies (collectively referred to herein as "Company") shall,
directly or indirectly, trade in the securities or Enron Corp., Enron Oil &
Gas Company, Northern Border Partners, LE, EOTT Ener;y Partners,
L.P., or any ether Enron Corp. .,ubsidiary or affiliated company with pub-
lidy-traded securities, of any other publicly-held company -while in the
possession of material non-public information relating to or affecting any
such companies, disclose such information to others who may trade, or
recommend the purchase or sale of securities of a company to which such
information relates. Advice should be sought in respect of equivalent
requirements under other applicable jurisdictions.

The Need For A Policy Statement

I9

The Securities and Exchange Commission ("SEC") and the Justice
Department actively pursue violations of insider trading laws.
Historically; their efforts were concentrated on individuals directly
involved in trading abuses. In 1988, to further deter insider trading
violations, Congress several years ago expanded the authority of the SEC
and the Justice Department, adopting the Insider Trading and Securities
Fraud Enforcement Act (the "Act"). In addition to increasing the penalties
for insider trading, the Act puts the onus on companies and possibly
other "controlling persons" for violations by company personnel.

Although the Act is aimed primarily at the securities industry, application
of the laws may be made to companies in other industries. Many experts
have concluded that if companies like Enron Corp. do not take active
steps to adopt preventive policies and procedures covering securities
trades by company personnel, the consequences could be severe.

In addition to responding to the Act, we are adopting this Policy
Statement to avoid even the appearance of improper conduct on the
part of anyone employed by or associated with the Company (not just
so-called insiders). We have all worked hard over the years to establish
our reputation for integrity and ethical conduct We cannot afford to have
it damaged.

  41
11


  EC 38015894.1

EXH012-03044


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=============

I The Consequences

This policy applies to all employees of the Company. It is intended to
provide guidance to employees with respect to existing legal restrictions.
It is not intended to result in the imposition of liability on employees that
would not exist in the absence of such policy. Any breach of this policy,
however, may subject employees to criminal pcmalties.

The consequences of insider trading violations can be staggering:
For individuals who trade on inside information (or tip information to
others):

  A civil penalty of up to three times the profit gained or loss
avoided;

 A criminal fine (no matter how small the profit) of up to $1 mil

  lion; and
1
   A jail term of up to ten years.

For a company (as well as possibly any supervisot.y person) that tails to
take appropriate steps to prevent illegal trading:
   A civil penalty of the greater of $1 million or three times the prof-
it gained or loss avoided as a result of the employee's violation;
and

 A criminal penalty of up to $2.5 million.

Moreover, if an employee violates the Company insider trading policy,
the Company unposed sanctions, including dismissal for cause, could
result.

EC 38015895



EXH012-03045



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Page 7 of 58
=============

Our Policy

If a director, officer, or any employee of the Company (as defined herein)
has material non-public information relating to Enron Corp., Enron Oil &
Gas Company, Northern Border Partners, L.P., EOTT Energy Partners,
L.P., or any other Enron Corp. subsidiary or affiliated company with
publicly-traded securities, it is the Company's policy that neither that
person nor any related Ferson may buy or sell securities of Enron Corp.,
Enron Oil & Gas Company, Northern Border Partners, L.P., EOTT Energy
Partners, L.P., or other Enron Corp. subsidiary or affiliated company with
publicly traded securities, or engage in any other action to take advantage
of, or pass on to others, that information. This policy also applies to
material non-public information relating to any other company, including
our customers or suppliers, obtained in the course of employment.
Transactions that may be necessary or justifiable for independent reasons
(such as the need to raise money for an emergency expenditure) are no
exception. Even the appearance of an improper transaction must be
avoided to preserve the Company's reputation for adhering to the high-
est standards of conduct
Material Information. Material information is any information that a rea-
sonable investor would consider important in a decision to buy, hold, or
sell stock: in short, arty information which could reasonably beer
to affect the price of the stock. If you are considering buying or selling a
security because of information you possess, you should assume such
information is material.
Examples.. Common examples of information that will frequently be
regarded as material are: projections of future earnings or losses; news of
a pending or proposed merger, acquisition, or tender offer; news of a signif-
icant sale of assets or the disposition of a subsidiary; changes in dividend
policies or the declaration of a stock split or the offering of additional
securities; changes in management, significant new products or discoveries;
impending bankruptcy or financial liquidity problems; and the gain or loss
of a substantial customer or supplier. Either positive or negative informa-
tion may be material. The foregoing list is by no means exclusive.

  EC 38015895.1

EXH012-03046


=============
Page 8 of 58
=============

Twenty-Twenty Hindsight If your securities transactions becor.in the
subject of scrutiny, they will be viewed after-the-fact with the benefit of
hindsight. As a result, before engaging in any transaction you should
carefully consider how regulators and others might view your transaction
in hindsight.
  Transactions By family Members. The very same restrictions apply to
your family members and others living in your household. Employees
are expected to be responsible for the compliance of their rranediate
family and personal household.
  M Wing formation To Others. Whether the information is proprietary
information about the Company or information that could have an
impact on our stock prices, employees must not pass material non-public
information on to others; this is called tipping. The above penalties may
apply, whether or not you derive any direct benefit from anther's
actions.

When Information Is Public. Information is "non-public" until it has
been disseminated in a manner making it available to investors generally.
This is typically satisfied by distribution cf such information b-. mre'ne
of a press release. However, even after such information is released to
the press, you should wait a period of time (at least one business day
and often two or three business days) before trading or disclosing such
information to others. Again, it is a good idea to exercise caution and
wait a longer period of time following the release of material information
than you might first consider warranted.

EC 3801 5896





EXH012-03047


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Page 9 of 58
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Company Assistance

No set of specific rules will be adequate in every circumstance. Any
person who has any question: about specific transactions may obtain
additioial guidance from wine Overturf, Deputy Corporate Secretary
and Director of Stockr older Relations, at (713) 853-6062. who will consult
with Company counsel as appropriate. Remember, however, the ultimate
responsib iity for adhering to the Polity Statement and avoiding improper
transactions rests with you. In this regard. it is imperative that you act in
good faith and use your best judgment.






  EC 38015896.1

EXH012-03048


=============
Page 10 of 58
=============


  Employees of Enron Corp., its subsidiaries, and its affiliated companies
(collectively the "Company") are charged with conducting their business
affairs in acco:dan,_e with the'' highest ethical standards. An employee shall
not conduct himself or herself i-h a manner which directly or indirectly
would be det,imertal to the best interests of the Company or in a manner
which would bring to the employee financial gain seF arately derived as a
direct consequence of his ,r her employment with the Company. Moral as
well as legal obligations will be fulfilled openly, promprly, and in a manner
which will reflect pride on the Company's name.
  Products and services of the Company will be of the highest quality
and as represented. Advertising and promotion will be truthful, not
exaggerated or misleading.
  Agreements, whether contractual or verbal, will be honored. No bribes,
bonuses, kickbacks, lavish entertainment, or gifts will be given or
received in exchange for special position, price, or privilege.
  Employees will maintain the confidentiality of the Company's sensitive
or proprietary information and will not use arch 'formation for their
personal benefit.
  Relations with the Company's many publics - customers, stockholders,
governments, employees, suppliers, press, and bankers - will be
conducted in honesty, candor, and fairness.
  Employees will comply with the executive stock ownership requirements
set forth by the Board of Directors of Enron Corp., if applicable.

Laws and regulations affecting the Company will be obeyed. Even
though the laws and business practices of foreign nations may differ
from those in effect in the United States, the applicability of both foreign
and U.S. laws to the Company's operations will be strictly observed.
Illegal behavior on the part of any employee in the performance of
Company duties will neither be condoned nor tolerated.

EC 38015897 r _
9



EXH012-03049


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Page 11 of 58
=============

Information Security Policy

Trade Secrets and Confidential Information

You may have access to or become aware of confidential and/or propri-
etary Information of the Company - that is, information relating to the
Company's business which is not generally pr publicly known. This
information includes but is not limited to:

  Internal telephone lists and directories; bid, trading, and financial
data; planned new projects and ventures; advertising and marketing
programs; lists of potential or actual customers and suppliers; wage
and salary or other personnel data; capital investment plans; changes
in management or policies of the company; suppliers' prices; and
other trade secrets.
The term "trade secret" means any type of information that has indepen-
dent economic value because it is not generally known or publicly ascer-
tainable by proper means and the owner has taken reasonable measures
to keep it confidentiaL

The Company's confidential or proprietary information could be very
helpful to suppliers and the Company's competitors, to the detriment'
of the Company. To help protect the Company's interests, business units
have established and implemented computer and electronic security
measures to ensure that employees have the means to communicate
domestically and internationally in a secure fashion. Employees should
follow these guidelines:

No employee may use, either for his/her own personal benefit or
for the benefit of others, Company information that is not publicly
known;

EXH012-03050


   No employee should disclose trade secrets or proprietary or confiden-
tial information to other employees or outsiders, except as required
in the rnndlurt of tha Cmmnanv'c hncinncw


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Page 12 of 58
=============

 Dispose of documents containing the Company's confidential
or proprietary information with care so as to avoid inadvertent
disclosure; and

 Guard against inadvertently disclosing such information in public
discussions where you may be overheard and in discussions with
family members o; friends.

Information about Others

Our employees have a duty and legal obligation to respect the
confidentiality rights of others. In the normal course of doing business,
it is common to acquire information about other companies and current
or potential customers, suppliers, or competitors. You should respect
the proprietary nature of this information and not use it or reveal
it to others.

e

In 1996, the U.S. Congress passed the Economic Espionage Act which
provides significant criminal penalties for persons who engage in the
theft of trade secrets.

In addition, the Economic Espionage Act prohibits you from acquiring
confidential or proprietary information (including technology) about
other companies through improper means, such as deceit, misrepresenta-
tion, or receipt of information illegally acquired by a third party, or from
present or former employees who are not authorized to disclose it.

EC 38015898

  11
ru

EXH012-03051


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Page 13 of 58
=============

Safety

Employees of the Company have a responsibility to comply with all
applicable laws and regulations regarding the safe design, construction, 1
maintenance, and operation of Company facilities. It is the responsibility
of every employee to perform his or her work and conduct the
Company's operations in a safe manner. Employees should be awarc
that health and safety laws may provide for significant civil and criminal
penalties against individuals and/or the Company for failure to comply
with applicable requirements. Accordingly, each employee must comply
with all applicable safety and health laws, rules, and regulations, includ-
ing occupational safety and health standards.

t


  EC 38015898.1
12 ------ - -

EXH012-03052


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Page 14 of 58
=============


  All information, ideas, concepts, improvemenus, discoveries, and employee
inventions, whether patentable or not, which am conceived, made,
developed, or acquired by an employee, individually or in conjunction
with others. during the employce'c employment by Enron Corp., its
sabsidiarics, and it, affiliat' d companies (collectively the "Compan)")
(whether during business hours or otherwise and whether on the
Company's premises o- otherwise) which relate to the Company's
business, products, or services shall be disclosed to the Company and
are ar,d shall be the sole and exclusive property of the Company.

For this purpose, the Company's business, products, or services, include,
without linuration, all such infonnation relating to corporate opportuni.ie.,,
research, financial and sales data, pricing and trading terms, evaluati.ms,
opinions, interpretations, acquisition prospects, the identity of customers
or their requirements, the identity of key contacts within the customer's
organizations (or within the organization of acquisition prospects), or
marketing and merchandising techniques, and prospective names and
marks.

Moreo% er, au documents, drawings, memoranda, notes, records, tiles,
correspondence, drawings, manuals, models, specifications, computer
prg' ams, E-mail, voice mail, electronic databases, maps, and all other
writings or materials of any type embodying any of such information,
ideas, concepts, improvements, discoveries, and inventions are and shall
be the sole and exclusive property of the Company.

If, during employee's employment by the Company, employee creates
any original work of authorship fixed in any tangible medium of expres-
sion which is the subject matter of copyright (such as videotapes, written
presentations on acquisitions, computer programs, E-mail, voice mail,
electronic databases, drawings, maps, architectural renditions, models,
manuals, brochures, or the like) relating to the Company's business,
products, or services, whether such work is created solely by employee
or jointly with others (whether during business hours or otherwise and
whether on Company's premises or otherwise), employee shall disclose
such work to Company.
  EC 38015899 13

EXH012-03053


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Page 15 of 58
=============

The Company shall be deemed the author of such work if the work is
prepared by employee in the scope of his or her employment; or, if the
work is not prepared by employee within the scope of his or her employment
but is specially ordered by the Company as a contribution to a collective
work- as a part of a me'ion picture or other audiovisual work, as a translation,
as a supplementary work, as a compilation, or as an ins`ructional text,
then -he work shall he consikered to be work made for sire and the
Company shall be the author of the work. If such work is neither
prepared by the employee within the scope of his or her employment
nor a work specially ordered and is deemed to be a work made for hire,
then employee hereby agrees to assign, and by these presents does
assign, to the Company all of employee's worldwide right, title, and
interest in and to such work and all rights of copyright therein.
As a result of employee's employment by the Company, employee may
also from time to time have access to, or knowledge of, confidential
business information or trade secrets of third parties, such as customers,
suppliers, partners, joint venturers, and the like, of the Company. Each
employee also agrees to preserve and protect the confidentiality of such
third party confidential information and trade secrets to the same extent,
and on the same basis, as the Company's confidential business information
and trade secrets.
These obligations of confidence apply irrespective of whether the infor-
mation has been reduced to a tangible medium of expression (e.g., is
only maintained in the minds of Company's employees) and, if it has
been reduced to a tangible medium, irrespective of the form or medium
in which the information is embodied (e.g., documents, drawings,
memoranda, notes, records, files, correspondence, manuals, models
specifications, computer programs, E-mail, voice mail, electronic
databases, maps, and all other writings or materials of any type.)
Each employee agrees to act with honesty, candor, and fairness with
respect to competitors and third parties and to comply in all respects
with applicable laws prohibiting the misappropriation of trade secrets,
copyright infringement, or use of counterfeit or spurious trademarks.
Under no circumstances will any activity be authorized or undertaken

  14

--------

  EC 38015899.1 '

EXH012-03054


=============
Page 16 of 58
=============

by an employee which violates the federal Economic Espionage Act, the
federal Copyright Act, the federal Trademark Counterfeiting Act, or any
other applicable domestic or foreign laws.

More specifically, all employees must recognize that the term "trade
secret" means any type of information that has independent economic
value because it is not generally known or publicly ascertainable by
proper means and which the third party owns and has takerr reasonable
measures to keep confidential.

An employee will not knowingly:
(1) take, carry away, or obtain a third party secret without authoriza-
tion or obtain a third party trade secret by fraud or deception;
  (2) copy, download, mail, deliver, send, transmit, or communicate
a third party trade secret without authorization; or
  (3) receive, buy, or possess a third party trade secret knowing it has
been stolen or obtained without authorization.

Further, if an employee uses trade secrets of a :comer emp:oyer without
the former employer's permission, this conduct violates the federal
Economic Espionage Act. An employee will not willfully infringe for
purposes of commercial advantage or private financial gain a third
party's copyright in a work by copying the work, distributing copies
of the work, using the work to prepare derivative works, or in the case
of some works, to publicly display or perform the work.

An employee will not intentionally traffic in goods or services using
a counterfeit or spurious trademark. All employees should be aware
that a violation of applicable domestic or foreign laws, particularly the
federal Economic Espionage Act, the federal Copyright Act, or the federal
Trademark Counterfeiting Act, may result in the imposition of significant
civil and criminal penalties for the Company as well as for the individual
employees.

The federal Economic Espionage Act, which also applies to conduct that
benefits any foreign government, foreign instrumentality, or foreign

EC 3809 5900 i s

EXH012-03055


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Page 17 of 58
=============

agent, provides for criminal fines for the Company of up to $10 Million
and criminal fines for an employee of up to $500,000 and up to 15 years
imprisonment. The federal Copyright Act provides for criminal fines
for an employee of up to $250,000 and up to 5 years imprisonment for
the first offense. The federal Trademark Counterfeiting Act provides for
criminal fines for the Company of up to $1 Million and criminal fines
for an employee of up to $250,000 and up to 5 years imprisonment
for the first offense.

i

If an employee has any questions concerning the meaning of the laws, the
employee should contact the Company's General Counsel.

Upon signing the Certificate of Compliance, an employee acknowledges
and agrees that:

  1. the business of the Company is highly competitive, and its
strategies, methods, books, records, and documents, its technical
information concerning its products, equipment, services, and
processes, procurement procedures and pricing techniques, and
the names of and other information (such as credit and financial
data) concerning its customers and its bus;ness -Affiliates all com-
prise confidential business information and trade secrets which
are valuable, special, and unique assets which the Company uses
in its business to obtain a competitive advar Cage over its competi-
tors;

  2. the protection of such confidential business information and trade
secrets against unauthorized disclosure and use is of critical
importance to the Company in maintaining its competitive position;
  3. he or she will not, at any time during or after his or her employ-
ment by the Company, make any unauthorized disclosure of any
confidential business information or trade secrets of the Company,
or make any use thereof, except in the carrying out of his or her
employment responsibilities hereunder,
  4. the Company shall be a third party beneficiary of the employee's
obligations under this policy; and

  16

-- - - - - - - - - - -

  EC 38015900,1

EXH012-03056


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=============

5. he or she agrees to act with honesty, candor, lnd tairness with
respect to competitors and third parties, and to ccmply in all
respects with applicable laws prohibiting the misappropriation
of trade secrets, copyright infringement, or the use of counterfeit
or spurious trademarks.

All documents, drawings, memoranda, notes, records, files, correspondence,
manuals, models, specifications, computer programs, E-mail, voic i mail,
electronic databases, maps, and all other writings or materials of any
type made by, or coming into possession of, employee during the period
of employee's employment by the Company which contain or disclose
confidential business information or trade secrets of the Company shall
be and remain the property of the Company. Upon termination of
employee's employment by the Company, for any reason, employee
promptly shall deliver the same, and all copies thereof, to the Company.


  EC 38015901
47

EXH012-03057


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=============

Policy on Use of Communication Services and Equipment



The term "Communication Services and Equipment" as used in this
Policy and the accompanying Procedures shall mean any and all commu-
iuications rysterrs c'r equipment ovmed or possessed by Enron Corp., its
divisions, subsidiaries, aria its Lffiliated and related companies (the
"Company"), or used hi connection with the Company's business,
including but not iimiLed to, telephones, facsimile machines, computers, a
computer modems, special long-distance services, cellular phones, voice i
mail, pagers, _lectronic mail, mail and delivery services, storage means t
of all types for the physical or electronic storage of the Company's
information or data, transaction services, or any other services of any
nature whatsoever in connection with any communica ion systernr r.Fces-
sary or desirable to promote the conduct of the Company's business.

General application of this Policy and
the accompanying Procedures

Ti-is P'lic: and the axompaying ]"rccedures apply to all eanployees,
third party contractors, guests, licensees, or invitees of the Company who
utili_e, possess, or have access to the Company's Communication Services
and Eruipment (cumulatively referred to herein as the "Users' of the
Company's Communication Services and Equipment).

General Policy of the Company with respect to its
Communication Services and Equipment

It is the general policy of Company:

 To provide or contract for effective Communication Services and
Equipment for use by the Company in connection with its business;

 To preserve and protect the confidentiality of the information and
data of the Company and its customers and contractors;

  18

EC 38015901.1

EXH012-03058


=============
Page 20 of 58
=============

To preserve and protect the legal privileges provided by the law
with respect to attorney/client communications, work product,
and investigations of the Company and its customers and
contractors; and

 To operate and maintain the Company's Communication Services
and Fquipment in a manner that is in full compliance with the law.

Limits on expectations of privacy

All Users of the Company's Communication Services and Equipment are
advised and placed on notice that

The United States government, and the various State and local
governments, may monitor contemporaneous communications
of all types (including communication by telephone, facsimile
machine, computer modems, special long-distance services, cellular
phones, voice mail, pagers, electronic mail, mail, and other
delivery services) or access stored communications, data, or
information of all types, subject to the protections of the Fourth
Amendment of the United States Constitution, which generally
requires the issuance of a court order or warrant. Moreover,
the United States government, and the various State and local
governments, may monitor contemporaneous oral, wire, or
electronic communications of all types subject to federal statutes
such as First Amendment Privacy Protection Act and the
Omnibus Crime Control and Safe Streets Act as amended
by the Electronic Communications Privacy Act of 1986.

2. The Federal Rules of Civil Procedure and the rules of civil procedure
for almost all States permit requests for production of documents
that are likely to lead to the discovery of relevant evidence. Both
the Federal Rules of Civil Procedure and the Texas Rules of Civil
Procedure specifically allow the discovery of electronically main-
tained data. For example, Rule 34 of the Federal Rules of Civil
Procedure and Rule 166b(2)(b) of the Texas Rules of Civil

EC 38015902 19

XH012-03059


=============
Page 21 of 58
=============

It

  Procedure permit the discovery of data compilations from which
information can be obtained, translated, if necessary, by the
respondent through detective devices into reasonably readable
form.
3. There should be no expectations of privacy whatsoever with
respect to communications sent to or received from public
electronic bulletin boards or public electronic communications
systems such as the Internet.

4. Under the regulations of the United States Postal Service, any
mail addressed to a non-governmental organization, including
but not limited to corporations, firms, sole proprietorships, part-
nerships, joint ventures and associations, or an individual, such
as an official, employee, contractor, client, agent, etc, by name or
title at the address of the organization, shall be delivered to the
organization. This is also true with respect to mail addressed in
this manner to former officials, employees, contractors, agents,
clients, etc. Moreover, mail addressed in this manner but bearing
the term "personal" is no different from :)the-- mail and shat' be
delivered by the United States Postal 3 mice to the Company. For
example, the United States Postal Service will deliver each of the
following to the offices of the Company:
Sam Smith Sam Smith Sam Smith
Enron Corp. 1400 Smith Personal and-Confidential
1400 Smith Street Houston, Texas 77251 P.O. Box 1188
P.O. Box 1188 Houston, Texas 77251
Houston, Texas 77251

All such mail belongs to the Company until such time as the
Company determines that the information contained in the mail
does not pertain to the business of the Company. The Company
shall have the right to open the mail if there is some question
as to its deliverability and/or forward the mail to a superior
or Company designated recipient if the person to whom the
mail is addressed is no longer with the Company or is ill or
on extended leave.

  20


  EC 38015902.1

EXH012-03060


=============
Page 22 of 58
=============

Moreover, all incoming or outgoing mail containing information
owned by the Company is the property of the Company and the
Company has the right to open any Company mail in order to
protect its business interests or to prevent illegal conduct.

The Company reserves the right to openly and on a continuous
basis monitor the contemporaneous communications of certain
of its functions, such as the monitoring of the telephones used in
connection with certain training functions and the telephones on
the floors in which certain of its traders operate. There should be
no expectation of privacy by anyone with respect to communica-
tions conducted on those telephones.

The Company reserves the right to monitor on a contemporaneous
basis communications transmitted by or stored within its
Communication Services and Equipment in the ordinary course
of the Company's business to ensure that no improper, illegal, or
criminal activities or being conducted. Such monitoring shall be
effected in accordance with the provisions of the Omnibus Crime
Control and Safe Streets Act as amended by the lect.ronic
Communications Privacy Act of 1986 and only if authorized
by an officer of the Company.

The Company reserves the right to delete or d stroy any and all
communications, including E-mail and voice mail messages, stored
in the Company's Communication Services and Equipment. As a
general rule, the Company's Communication Services and
Equipment is not backed-up and should, therefore, be thought
of as a very temporary storage media. If a machine failure in the
Company's Communication Services and Equipment occurs, all
messages and data could be lost Therefore, Users must not consider
E-mail and voice mail messages to be permanently stored by the
Company. On the other hand, the Company also reserves the right
in its discretion to maintain any .and all communications, including
E-mail and voice mail messages, transmitted by or stored within
the Company's Communication Services and Equipment Users
therefore also should take care that the messages they transmit or
store comply with all of the Company's policies and with the law.

EC 38015903 2

EXH012-03061


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=============

The Company reserves the right to access E-mail messoggs, voice
mail messages, data, or information stored on the Company's
computers or other electronic devices or media owned or
controlled by the Company or comprising the Company's
Communication Services and Equipment. Therefore, there should
be no expectation of privacy with respect to such stored `
E-mail messages, voice mail messages, data, or informa iicn.

9. Because all of the Company's Communication Services and
Equipment are the property of the Company, the Company
reserves the right to monitor its Communication Services and
Equipment in order to ensure that its property is being properly
and legally used.
10. Users do not have a personal privacy right in any data o, informa-
tion created, received, or sent on the Company's Communication
Services and Equipment. Any data or information transmitted or
stored on the Company's Communication Services and Equipment,
whether or not they relate or pertain to the Company's business,
gccds, orservices, ma}-be accessed by the Company Any e-ri 'nye'
or contractor who elects to utilize the Co nr,&ny's Con-a. ra,Iication
Services and Equipment to transmit or store data or information
recognizes that the Company may access and monitor such data
or information and has no obligation to continue to store such data
and information.
  Ownership and confidentiality of information

1. All of the Company's Communication Services and Equipment are
the property of the Company. Any and all communication, data,
or information created, received, or sent on the Company's
Communication Services and Equipment are the property of
Company. Users have no right, title, or interest in such
Communication Services and Equipment or in any communications,

  22

EXH012-03062



=============
Page 24 of 58
=============

data, or information created, received, or sent on the Company's
Communication Services and Equipment All means of identifying
communications, such as the use of domain names on the Internet
or other networks or systems, that embody or use the Company's
image, names, or marks (such as an Internet domain name
incorporating Enrwn./om) shall belong to the Company.

This I'o1:cy ar,d the accompanying rrocedures do not modify in
any way the Company's policy that the Company is and remains
the owner of all information created by the Company's employees
during their employment by the Company that relates to the
bsincss, goods, or services of the Company, irrespective of
where such information is stored or maintained, e.g., in electronic
form on the hard drives of the Company's computers, in elocc tronic form in servers maintained by the Company as part of its
network, or in diskettes or computers purchased by the
Company that are possessed by the employees.

  3. This Policy and the accompanying ;Procedures do not modify in
any, ay tlic Co,np..ny'.L rc:iqy that User remain obligated to
protect the coniidentialiry of the Company's information irrespec-
tive of where such information is stored or maintained, e.g., in
electronic form on the hard drives of the Company's computers,
in electronic form in servers maintained by the Company as part
of its network, or in diskettes or computers purchased by the
Company that are possessed by the employees.
The right to use the Company's Communication Services and
Equipment is at the will of the Company and is conditioned on
continued compliance with the Company's rules and policies

Users are allowed to utilize the Company's Communication
Services and Equipment only at the will and discretion of the
Company. The Company has the right to prohibit Users from
utilizing the Company's Communication Services and
Equipment at any time for any reason.

  EC 38015904
  x3

XH012-03063


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Page 25 of 58
=============

2 Moreover, the Users' right to use the Company's Communication
Services and Equipment is conditioned on acceptance of the
terms of this Policy and the accompanying Procedures as well
as continued compliance with this and all of the Company's
other ruics and policies.

Acceptance, dicciptirtary action, interpretation,
and modification

Employment by the Company, agreement by a contractor to do business
with the Company, or use of the Company's Communication Services
and Equipment by a User, constitutes acceptance of and consent to the
terms of this Policy and the accompanying Procedures.

Improper use of the Company's Communication Services and
Equipment may result in discipline, up to and including termination.



Questions about interpretation of this Policy and the accompanying
Procedures should be referred to the Company's Human Resources
Department, the Law Department or the Information Services
Department.

r
  24

  s
. ----'EC 3801~gpA 1

XH012-03064


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=============

Procedures for Use of Communications Services and Equipment

  Purpose
To set forth the procedures for the use of the Company's Communication
Services and Equipment in accordance with the Policy.
  General application of this Policy and the accompanying
Procedures

  This Policy and the accompanying Procedures apply to all Users of the
Company's Communication Services and Equipment.
} Requirements for the use of the Company's Communication Services and
' Equipment

The Company's Communication Services and Equipment should
be used for Company purposes only. Employees should limit use
of the Company Communication Services and Equipment for
personal purposes to those circumstances where such personal
use enhances such employee's efficiency durir g affice hours or
otherwise does not detract from such employee's activities on
behalf of the Company. When personal usage is unavoidable,
employees must properly log any user charges and reimburse the
Company for them. However, whenever possible, personal com-
munications that incur user charges should be placed on a collect
basis or charged directly to the employee's personal credit card or
account. Users may not use the Company's Communication
Services and Equipment for non-Company businesses, such as
"moonlighting" jobs.

Users should not utilize the Company's communications systems
to send or receive private, personal messages they do not wish
monitored or accessed by the government, third parties, or the
Company.

Users shall refrain absolutely from any activity that may cause
harm or damage to the Company's Communication Services and
Equipment or any communications, data, or information transmitted by or stored within such Communication Services
and Equipment. EC 38015905 25

EXH012-03065


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=============

4. Users may not use the Company's Communication Services and
Equipment for or in connection with any illegal or criminal activity
Users may not use the Company's Communication Services and
Equipment for any activity which violates any company policy.
For example, Users may not use the Company's Communication
Services and Equipment to copy, duplicate, or use software that is
not properly licensed or the use of which infringes the copyright
of a third party. Users may not use the Company's Communication
Services and Equipment to infringe third party intellectual
  property rights. Accordingly, Users should download information i
and software from the Internet and other public or third party
systems into communications systems and equipment only '
when such downloads do not infringe on third party copyrights
  or intellectual property rights.
  5. No confidential or proprietary information of the Company and
no privileged communications (e.g., attorney/client communica-
tions) may be transmitted via public electronic communication
systems unless the transmissions are properly encrypted and no
third party copyright or intellectual property rigius are violated.
  6. Users may not use the Company's Communication Services and
Equipment to forward messages without a legitimate business
purpose under circumstances likely to lead o embarrassment of
the sender or to violate a clearly expressed desire of the sender to
restrict additional dissemination.

Users may not connect incompatible equipment to the Company's
Communication Services and Equipment Users may not use in
the Company's Communication Services and Equipment any
software that is infected with a virus. If any such software is
found to be infected with a virus, users will immediately alert
those who have received a copy, and work with their systems
management to remove the virus.

All employees and contractors must recognize and always keep
in mind that whatever they reduce to a tangible form and main-
tain in their physical or electronic files may possibly, under the

  26

  ----- ------
  EC 38015905.1

Fytn17-nInAA


=============
Page 28 of 58
=============

appropriate circumstances, be discovered by third parties in
litigation. Employees and contractors are cautioned that all such
documents must comply with the Company's policies with
respect to the protection of confidential information, the Company's
policies with respect to the protection of privileged commi.nicationr,
and the Company's document retention policies.
9. Users may not use the Company's Communication Services and
Equipment for "chain" letters.
10. Users should keep the number of messages and data stored in the
Company's Communication Services and Equipment under control,
and purge old Communication Services and Equipment messages
and data regularly.
11. Employees should exercise care so that no personal correspon-
dence appears to be an official communication of the Company.
Personalized Company stationery and business cards may only
be issued by the Company and may only be used in connection
with Company business. Employees may not use the Company's
address for receiving personal mail or use Company stationeryv or
postage for personal matters.
  PASSWORDS

Users should change their passwords .t least quarterly, every 91, lays
Passwords should be no shorter than six characters and should be a
mixture of alpha, special, and numeric symbols so that the password
code is difficult for others to determine using "password cracking" software.

Passwords should not contain any codes, names, words, or phrases that
someone familiar with the owner might associate with that person and
thereby have an advantage in cracking the code and using it illegally.

Passwords are not to be shared by two or more people. Each User should
have a unique code that only they know.

EC 3809 5906

  z7

EXH012-03067


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=============

Files containing User account names, log on codes, and passwords (i.e.
security files) in Company Communication Services and Equipment
should be examined at least weekly for persos who no' onger work
for the Company, and their access authority immediately removed.
Users who ha' a r.: t used their access identification code and password
for longer than 90 con`' udvc. calendar days should have their need for
continued access reviewed at least monthly.

All Company Communication Services and Equipment That allow
persons to connert to the service or equipment from a remote location
(dial-up access) shoidd require all Users to authenticate themselves
through the use of passwords or other types of technology, such as vuice
recognition systems, that ensure the person is who they say they are



Whenever possible, all remote access Company Communication Services
and Equipment should have a preset maximum number of attempts to
authenticate the remote User, e.g. 3 attempts. Failure to successfully
remotely authenticate within three attempts should result in that access
session beirg terminated, or forwarded to a Company security officer for
verit4caticn of the renuestrng party.

MONITORING COMMUNICATION SERVICES
AND EQUIPMENT ACCESS

All Company Communication Services and Equipment should be
designed/equipped to accurately and quickly determine and log all
attempted or successful intrusions of the system or network by someone
not authorized to use that system or network. Any such "hacker"
attempts should be immediately investigated and measures taken quickly
to prevent that type of unauthorized access in the future.

  EC 38015906.1

-XH012-03068



=============
Page 30 of 58
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INTERNET SECURITY POLICY: SCOPE OF
USE OF ELECTRONIC MEDIA AND SERVICES

Introduction - General Application of This Policy

This Internet Security Policy d afines roles, responsibilities, and policies for
tha Compan 's employees, agents, and contractors using the Company's
communications facilities to access third party electronic media and ser-
vices such as the Internet.
As an advanced technology company, we increasingly use and exploit
electronic forms of communication and information exchange. Company
employees, agents, and contractors may have access to one or more
forms of electronic media and services, computers, a-mail, telephones,
voicemail, fax machines, external electronic bulletin boards, wire services,
on-line services, and the Internet.
The Company encourages the use of these media and associated services
because information technology is part of our business, because they
make communication more efficient and effective, and because they are
valuable sources of information about vendors, customers, new products,
and services. However, Company-provided access to electronic media
and services (e. g. an Internet account) are the Company's property, and
their purpose is to facilitate Company business.
With the rapidly changing nature of electronic media, and the
"netiquette" which is developing among users of external on-line
services and the Internet, this Internet Policy cannot lay down rules
to cover every possible situation. Instead, this Internet Policy expresses
the Company's philosophy and sets forth general principles to be applied
to use of electronic media and services. This Internet Policy applies to all
Company employees, agents, and contractors using electronic media
and services which are: accessed on or from Company premises; accessed
using Company computer equipment, or via Company-paid access
methods,, and/or used in a manner which identifies the individual with
the Company collectively, and individually, such individuals will be
referred to as "Internet Users".

EC 38015907 29

=XH012-03069


=============
Page 31 of 58
=============

Use of Company-provided access to the Internet is intended to be primar-
ily for the Company's business-related purposes. Internet access is moni-
tored, and actual web-site connections are recorded. Excessive use of
Company-provided access to the Internet for non-business-related pur-
poses will result in loss of access privileges.
  Procedures. Guidelines, And Restrictions

Accounts and Account Passwords

  (a) You are responsible for the security of your account password(s)
and will be held responsible for all use or misuse of your account.
You must maintain secure passwords to your account. Internet
Users accessing the Internet over a Company network may be
required to use an ID and password at the firewall (in addition to
their usual LAN sign on). Passwords are machine generated and
will be changed every thirty days. You must follow all directions
of the Company's system administrators with respect to security of
passwords and take reasonable precautions against unauthorized
access.

  (b) Remote login to the Company network is prohibited unless permis-
sion to do so is granted. Do not remotely log into (or otherwise
use) any workstation or computer not designated explicitly for
public logins over the Company network- even if the configura-
tion of the computer permits remote access - unless you have
explicit permission from the owner and the current user of that
computer to log into that machine.

  (c) Access to selected Internet hosts or networks which the Company
designates as inappropriate may be denied. You may not use any
account set up for another user and you may not attempt to find out
the password of a service for which you have not been authorized,
including accounts set up for other users.

  (i) File Transfer Protocol "FM" may be used to initiate
transfer of data from/to specified Company hosts and
from/to selected Internet hosts. Initiation of F P sessions
to Company hosts from the Internet is prohibited.
  30

  a
EC 38015907.1

EXH012-03070


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=============

(ii) Access to `network news" is allowed with restrictions.
The Company will apply filters as appropriate to block
certain news groups.

(iii) Access to the "World Wide Web" is permitted.
Inappropriate sites may be blocked from the Company
network.

(iv) All services not explicitly allowed are prohibited. Use of
games or other non-work related objects over the
Internet is prohibited.

(d) Network services and World Wide Web sites can and do monitor
access and usage and can identify at least which company - and
often which specific individual - is accessing their services. Thus,
accessing a particular bulletin board or Website leaves Company-
identifiable electronic "tracks" even if the Internet User merely
reviews or downloads the material and does not post any message.
As a general rule, all Internet use should be conducted with this in
mind so as to always portray the Company as a reputable compa-
ny and to maintain its reputation and goodwill.

Intended Uses

Electronic media and services are primarily for Company business use.
All Company systems and related equipment are intended for the commu-
nication, transmission, processing, and storage of Company-authorized
information. Limited, occasional, or incidental use of electronic media
(sending or receiving) for personal, non-business purposes is under-
standable and acceptable -- as is the case with personal phone calls.
However, Internet Users need to demonstrate a sense of responsibility
and may not abuse the privilege.

EC 38015908

  37

EXH012-03071


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Page 33 of 58
=============

Assuring Ethical and Legal Uses



(a) Electronic media may not be used for knowingly .zansmittir~g,
retrieving, or storing any communication which is (i) discriminato-
ry, harassing, or threatening (ii) derogatory to any individual,
  (iii) obscene, (iv) defamatory or threatening, (v) a "chain'etter" or
junk mail, (vi) untrue or fraudulent, or (vi) illegal or against
Company policy or contrary to the Company's interesc, or for
personal profit.

(b) In downloading any material from the World Wide Web or by
FTP transfer, or in distributing any material by a-:nail or Fl?
transfer, you must bear in mind any proprietary or intellectual
property rights of third parties in the material. You must not and
may not copy material where such copying would infringe the
proprietary or intellectual property rights of third parties. Such
infringement is an offense which may render you liable for civil
claims and, where appropriate, may also be a criminal offense.
(c) You may not download or store any material from the World
Wide Web, or received b1, e-mzil or by FTP transfer, ~, ii;tribi:te
any material by FIT transfer or by e-mail, which is indecent or
obscene.
(d) No e-mail or other electronic communications may be sent which
attempt to hide the identify of the sender, or represent the sender
as someone else or from another company. Whenever Users send
e-mail, User name, User ID, and the Company's name are includ-
ed in each e-mail message. Internet Users are solely responsible
for all electronic mail originating from their user id. When using
the Company's e-mail facilities, the following are prohibited: (i)
forgery or attempted forgery of e-mail messages; and (ii) reading,
deleting, copying, or modifying the e-mail of others.
(e) Employees must respect the confidentiality of other people's
electronic communications and may not attempt to (i) "hack"
into third party systems, (ii) read other people's logins or "crack"
passwords, (iii) breach computer or network security measures,

32



  EC 38015908.1

EXH012-03072


=============
Page 34 of 58
=============



  or (iv) intercept or monitor elcctroruc file` or communications
of other employees or third parties, except by explicit direction
of Company management.
  (f) Many software programs and computer data, and related materials
such as documeniatio', axe owned by individual users or other
companies, and are protected by copyright and other laws,
together witr- licenses and other cortrac'ual arrangements.
Anyone obtaining electronic access to another company's or
individual's materials must respect all rights (including
copyrights) therein, and may not copy, retrieve, modify, disclose,
examine, rename, or forward such materials except as permitted
by the person owning the data, software programs, and/or otlier
materials. Such restrictions include:
  (i) copying programs or data;
(ii) reselling programs or data;
  (iii) us; ng programs or data for non-Company business
purposes;

  (iv) using programs or data for personal financial gain;
(v) using programs or data without being one of the
licensed individuals or groups; and
  (vi) publicly disclosing information about software
programs without the owner's permission.
FAILURE TO ABIDE BY THESE RESTRICTIONS MAY SUBJECT
EMPLOYEES TO CIVIL AND/OR CRIMINAL PROSECUITON.

EC 38015909

  33
  L

EXH012-03073


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Page 35 of 58
=============

Consent to Monitoring

Electronic information seated and/or communicated by an Internet User
using e-mail, word processing, utility programs, spreadsheets . voicemail,
telephones, hnternet/Brlletin Board System (BBS) access, etc. may
be monitored by the Company and the Company reserves the right
to monitor asp-dally with resFt _t to the following.

(a) 111e Company routinely monitors usage patterns for both voice
and data communications (e.g., number called or site accessed;
call length; times of day when calls were initiated). Reasons include
cost analysis/allocation and the management of our gateway
  to the Internet.

4

(b) The Company also reserves the right, in its discretion, and the
employee upon signing the Certificate of Compliance consents
to such action from the Company to review and disclose any
electronic files and messages (including e-mail) and usage to
the extent necessary to ensure that electronic media and services
are being used in compliance with the law and with this and
  other Company policies. The Company may also find it necessary
to monitor the system for signs of illegal or unauthorized entry.
Accordingly, the Company reserves the right, in its discretion,
and the undersigned hereby consents to such action by the
Company, to intercept and disclose any electronic files and
messages (including -mail) at any time with or without prior
notification to the users or owners of such files or resources.
  The undersigned hereby waives any right to privacy in such
electronic files.

(c) Employees should therefore understand that electronic communica-
tions are not totally private and confidential Sensitive or confidential
information should be transmitted by more secure means.

  34

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- ----
  EC 38015909.1

EXH012-03074


=============
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=============

Assuring Proper Use of The Company's System Resources

Electronic media and services should be used in an efficient and economical
manner and not in a way that is likely to cause network congestion or
significantly hamper the ability of other people to access and use the
Company's computer systems. Any software that is designed to destroy
data, provide unauthorized access to the Company's computer systems, or
disrupt computing processes is prohibited.

Confidentiality and Encryption

In accordance with the Policy on Use of Communication Services and
Equipment, Internet Users will maintain the confidentiality of the
Company's confidential and/or proprietary information and will not use
such information for their personal benefit. Any messages or information
sent by an Internet User to one or more individuals via an electronic
network (e.g., bulletin board, on-line service, or Internet) are statements
identifiable and attributable to the Company. While some users include
personal "disclaimers" in electronic messages, it should be noted that
there would still be a connection with the Company, and the statement
might still be legally imputed to the Company. All communications sent
by employees via a network must comply with this and other Company
policies and may not disclose any confidential and/or proprietary
Company information.

To ensure the Company's continuous access to information on the
Company's computer systems, no Internet User shall use personal hard-
ware or software to encrypt any e-mail, voicemail, or any other data
stored in or communicated by the Company's computer systems, except
in accordance with express prior written permission from the Company's
management. Should an Internet User have a need to use security mea-
sures to encrypt any e-mail, voicemail, or any other data stored in or
communicated by the Company's computer systems, such user should
contact the appropriate information systems personnel to assist in and
facilitate such encryption. The Company will retain the encryption keys
for all encrypted data stored in or communicated by the Company's

EC 38015910 '35


F

EXH012-03075


=============
Page 37 of 58
=============

computer systems, except in accordance with express prior written
permission from the Company's management. There may be a need for
the Company to access an Internet User's system or files when he/she
is away from the office, therefore, Company management, at their discre-
tion, may request that authorized systems personnel reset the password
of an Internet User who uses any security measures on an Company-
supplied PC, Macintosh, UNDO workstation, or any other Company-
supplied workstation for Company use if required.



To meet the Company's public disclosure responsibilities as required
by the Securities and Exchange Commission and to ensure that we are
communicating a consistent message, public disclosure restrictions y
  pp'.y
to interactions over the Internet as well as any other methods of commu-
nications. Any employee found to be abusing the privilege of Cc ni2any.
facilitated access to electronic media or services will be subject to corrective
action up to and including termination, risk losing Internet User privi-
leges, and/or having the privilege removed for himself/herself and pos-
sibly other employees.

Any unauthorized attempts to pene-ate :+- su 'ert Company ccmput: r
5) st,n is , vil' be thoroughly znd promptly investigated and resolved on a
case-by-case basis. If circumstances warrant, such attempts will be vigor-
ous,y pursued and prosecuted to the full extent of the law.


  EC 38015910.1
36

EXH012-03076


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=============

Governmental Affairs and Political Contributions

The Company's official policy concerning all governmental, political, and
public matters in which the Company has an interest will be determined
and announced by the Executive Committee of Enron Corp.'s Board of
Directors. No alteration of or deviation from such official policy wit be
made without the approval of the Chairman of the Board and Chief
Executive Officer of Enron Corp.
The Company employs governmental relations and public policy
personnel who are assigned the responsibility of fulfilling its corporate
public affairs responsibility, communicating with public bodies and
officials pertaining to the Company's position on public policy questions,
and maintaining the goodwill and understanding of public officials.
Communications of the Company's position to public officials or bodies
by personnel of the Company and its subsidiaries must be coordinated
with the governmental relations and public policy personnel at corporate
headquarters.
The Company may also provide factual information to employees and
stockholders concerning the impact on the Company of specific issues,
legislation, and other governmental, political, and public matters. Such
communications must be approved by the Chairman of the Board and
Chief Executive Officer of Enron Corp. or the President and Chief
Operating Officer of Enron Corp.
To establish restrictions with regard to corporate participation in the
political system as imposed by law, the following guidelines will be
followed

1. No funds, assets, or services of the Company will be used for politi-
cal contributions, directly or indirectly, unless allowed by applicable
foreign and US. law and approved in advance by the Chairman of
the Board or President of Enron Corp.

2. Company contributions to support or oppose public referenda or
similar ballot issues are permitted, with advance approval of the
Chairman of the Board or President of Enron Corp.

EC 38045911 37

EXH012-03077


=============
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=============

3. Employees, if eligible under applicable foreign and US. law, may
make political contributions through legally established Company
sponsored and approved political support funds. Any such personal
contribution is not a deductible expense for federal or other applicable
income tax purposes and is cwt eligible for reimbursement by the
Company as a business expense. Political action committees ape
permitted under ;.1.S. law.

e

Under no circumstances will any activity be authorized or undertaken
by an employee which violates the provisions of the Foreign Corrupt
Practices Act, federal and state election laws, bribery, or other applicable
domestic or foreig t laws.

The Company encourages its employees, management, and stockholders
to exercise their voting rights and take an active interest and participate
in public affairs at local, state, and national levels.

Employees, regardless of their Company position, are free to express their
views on public affairs matters through political or non-political measures
of their choice and engage in partisan political activities. Employees should
conduct themselves in contacts with others so as to maze clear that the
views expressed are their own and not those of the Company.

38

----------------- - -------------
EC 38015911,1

FYHn1 2-n3n7


=============
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=============

^umwo ...4Pr Rnnlicable foreign and US. law, may Consulting Fees, Commissions, and Other Payments

Agreements with consultants, agents, or representatives must be
jn writing ana must state the services to be performed, the iee basis,
amounts to be p ud, and other material terms and conditions, and the
'orm and content must be approved by the Company's legal counsel
and with respect tc foreign consiLants, agents, or rpresenratives by
the Company's Vice Chain ian, Mr. Jack Urquhart Payments must bear
a reasonable relationship to the value of the services rendered, must
be completely documented and recorded, and must not violate the
provisions of the Foreign Corrupt Practices Act or any other applicable
law, including, without limitation, those relating to bribery. Payments
will be made by check or wire transfer in accordance with the following
procedure:
1. In any lawful currency in the country where the services are
performed; and
2. To the person directly or to the person's bank account in the country
where :he sen `,e:: am performed; provided,'icwcver, that paym'r+t
may oe maua other than in hhe place of performance with the approval
of Company legal counsel.
When payments are requested to be made in any manner, currency, or
place other than in accordance with the above procedure, the person who
has made such request shall be advised that such payments shall not be
made except upon notification to the governments of both the country
of residence and the country where the services are performed, unless
Company legal counsel determines that such notice is not required by
law and is not otherwise advisable under the circumstances. Such
notification shall be made to both governments even though the requested
manner of payment does not apparently violate applicable domestic or
foreign law. Notification with respect to the requested manner of payment
should normally be made to the tax, finance, or other governmental
authorities, as shall be appropriate under the circumstances.

EC 38015912

  39

EXH012-03079


=============
Page 41 of 58
=============

The Company policy discourages but does not prohibit customary expe-
diting payments to low-level employees of foreign governments, properly
recorded in the Company's books, which are not excessive in amount
and which meet the following criteria:

1. The making of such payments is an established and well-recognized
practice in the area.

2. Such payments are to expedite or assure performance of a routine gov-
ernmental action (such as obtaining customs clearances, visas, and
work permits) to which the Company or the Company's employee is
clearly entitled.

3. The payment does not violate any provisions of the Foreign Corrupt
Practices Act or any applicable law, including, without?imitatioit, those
relating to bribery

It

40


  EC 38015912.1

EXH012-03080


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Compliance with the Foreign Corrupt Practices Act

The United States Foreign Corrupt Practices Act (the "Act") applies
to the Company in its worldwide operations as well as individually to
all Company employees who are United States citizens, nationals, or
residents with respect to their worldwide activities. The Act prohibits
the corrupt offer, payment or gift of money or anything of value to a
foreign governmental official or employee or to any foreign political
candidate or party for the purpose of influencing any act or decision of
a governmental body in order to obtain or retain business or to direct
business to any person. The Act also prohibits the offer, payment or gift
of money or anything of value to any third party with knowledge that
all or a portion of such money or thing of value will be transferred to a
governmental official or employee or political candidate for the prohibited
purposes. The Act contains certain narrow affirmative defenses to its
prohibitions.
The Act provides for criminal and civil penalties. Criminal sanctions of
up to $2,000,000 per offense can be imposed on the Company and fines
of up to $100,000 per offense and imprisonment for up to 5 years can be
imposed on individuals convicted of violating the Act. Company policy
requires strict compliance with the Act.
Due to the broad nature of the Act's prohibitions, it may be implicated by
a wide range of activities in addition to direct bribery of a foreign official.
For instance, arrangements with foreign joint venture partners, foreign
agency or sponsorship arrangements, and any direct dealings with,
including lavish entertainment of, foreign governmental officials or
employees may raise issues under the Act.
Any questions with respect to the application of the Act to any proposed
activity by the Company should be referred immediately to Company
legal counsel.

EC 38015913

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EXH012-03081


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Compliance with Antitrust Laws

All employees of the Company are expected to comply fully with all
applicable federal, state, and foreign antitrust laws. Whenever any doubt
exists as to the legality of any action or arrangement, such transa thon
must be submitted to Company legal counsel for prior approval and
continuing review. Both the spirit and the letter of antitrust laws are to be
followed, so as to avoid creating any unlawful restraints on competition
or the appearance of any unlawful restraints.

In the United States, certain types of agreements with third party
persons, including competitors, suppliers, or customers, are unlawful
per se under federal antitrust law. That is to say, such agreements are
automatically in violation of such laws, regardless of the agreement's
commercial reasonableness, its purpose, or actual effect on competition.
Other agreements with competitors or customers, although not unlawful
per se, may be unlawful under the antitrust "rule of reason."

Formal or informal arrangements with actual or potential competitcrs
(a broadly defined group) which limit or restrict cnmpetiticr may
constitute per se violations. Such unlawful agreements include those
which: fix, stabilize, or control prices (also a broadly defined term which
includes not only price but any element of price such as credit terms,
discounts, freight rates etc.) or terms or conditions of sale; allocate
products, markets, customers, or territories; boycott customers or
suppliers; or limit or prohibit a party form carrying on a particular
commercial enterprise. To assure compliance with antitrust laws,
Company employees are not to enter into any discussion or arrangement
with an actual or potential competitor which could result in any such
per se violation. Further, since the existence of an unlawful agreement
may be inferred from the mere exchange of competitively sensitive
information between competitors, absent prior review and approvalby
Company counsel that such actions are lawful no employee shall give to
or accept from a competitor any information concerning prices, terms,
and conditions of sale, or any other competitive information.

42

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-EC 38015913.1

EXH012-03082


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Certain types of restrictive understandirge between a customer and sup-
plier are also deemed to be anticompetitive and may be per se antitrust
+ violations. Some such agreements are dearly per se illegal, such as an
agreement between a supplier and a distributor setting the distributor's
minimum resale prices. Others may be per se illegal if the party imposing
the agreement has market power, such as an agreement imposing a
requirement of reciprocal dealing, (for example, an agreement that one
party bLys goods trori another only u- tie understanding that the second
party will buy goods from the first), or tying a customer's right to buy
one product or service to the obligation to buy another. These possible per
se illegal arrangements muse not be agreed to or discussed with a cus-
tomer, absent prior review and approval by Company counsel that the
arrangement is lawful.
  Agreements that do not unambiguously injure competition (i.e., that are
not per se illegal) are analyzed under the antitrust rule of reason. Under
the antitrust "rule of reason" test, a court determines whether a particular
agreement acts as an "unreasonable" restraint on trade and thus is anti-
competihve and unlawful. Such a determination is bared on a particular
set of facts and circumstances, including the terms of die agreement, the
purposes, the relationship of the parties, and the probable effects on com-
petition. Since the circumstances surrounding any arrangement change
from time to time, it is essential that agreements which could potentially
cause an unreasonable restraint on trade be subject to continuing review by
Company legal counsel.

Unilateral action by the Company (in other words, conduct not involving
an agreement) may also violate the antitrust laws. Any transaction or
practice that would appear to result in the Company gaining a monopoly
in a particular line of business in a particular market or geographic area,
or which indicates an intent to drive a competitor out of business or to
prevent a competitor from entering a market, should therefore be avoided
and discussed with Company legal counsel.

Also, discriminating pricing can violate a complicated antitrust statute
known as the Robinson-Patman Act.

EC 3801 5914

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EXH012-03083


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The sznctions resulting from violations of the antitrust laws can be
severe, both as to corporations and as to individuals; they include both
criminal penalties and civil treble damages. Whenever arty question
arises as to the significance or application of antitrust laws, Company
legal cowtel moist be consulted, and any agreements with possible
antitrust implications shall be made only with prior approval of
Company legal counsel.

International operations may be subject to antitrust laws of either the
United States or foreign countries, so employees should be aware of
the implication of any such laws to Company transactions.

Advice should be sought in respect of equivalent requirements under
other applicable jurisdictions, including the European Commission.




  EC 38015914.1

EXH012-03084



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Page 46 of 58
=============

Compliance with Environmental Laws

Employees of Enron Corp., its subsidiaries, and its affiliated companies
(collectively the "Company") must conduct Company operations in
compliance with all applicable environmental laws and regulaticas
including those of other countries which have jurisdiction over Company
activities. These laws are designed to protect the environment in which
we live and work, human health, wildlife, and natural resources.
Environmental laws either prohibit or severely restrict the release of
pollutants to the air, land, surface water, and groundwater. They contain
numerous waste management requirements. They impose on owners
and operators of most types of facilities the duty to protect the envf:on-
ment by requiring them to obtain permits for certain emissions, to repcr'
releases and spills of materials which may cause pollution, and to create
and maintain certain records. The Company is committed to environmental
protection, and it expects employees to abide by the letter and the spirit
of these laws. Employees who do not follow environmental rules and
regulations shall oe subject to appropriate disciplinary action.

Those 'e p,es.ble for the conctructici and the operation of Company
facilities must ensure that the Company has the necessary environmental
permits i nd clearances for these activities and that the Company complies
with the terms and conditions of its permits. These individuals are charged
with the responsibility of ensuring that the Company makes all required
environmental reports and maintains, at the appropriate location, all
required environmental records. Employees must consider the environmental
consequences of all aspects of Company operations and proposed
changes .o our operations.

  One of the major environmental laws of the United States may have
significant legal and economic consequences for companies which fail
to consider the environmental aspects of proposed transactions. The
Comprehensive Environmental Response, Compensation and Liability
Act (CERCLA, commonly known as "Superfund") was passed to
provide a means for cleaning up abandoned waste disposal sites and for

  EC 38015915 -
45

EXH012-03085


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responding to environmental emergencies. CERCLAimposes sweeping
liability (i) on those who sent hazardous substances to sites that may be
cleaned up under CERCLA, (ii) on those who owned or operated these
sites when hazardous substances were sent there, (iii) on those who
transported hazardous substances to these sites, and (iv) on those who
now own or operate these sites. These four classes of persons are potentially
responsible for the entire cost of cleaning up the site. Employees must
attempt to avoid actions which would increase the Company's Superfund
liability Those who are responsible for disposing waste offsite should
ensure that the disposal facility is well managed by a reputable firm.
Those who engage in real estate transactions of any nature, particularly
acquiring property rights, should make all appropriate inquiry about
environmental conditions at the property before completing the real
estate transaction.
Environmental regulations change constantly both in the United States
and abroad. Those who are responsible for environmental compliance
should make every effort to stay abreast of changes to regulations which
affect the Company and to plan accordingly for the implementation of
regulations which have been proposed.
Environmental audits may be used to verify compliance with environmental
regulations. The US. Environmental Protection Agency and the Department
of Justice encourage the performance of periodic, internal environmental
audits to ensure compliance with regulatory requirements. The Company
likewise encourages those in charge of operations to conduct periodic
environmental audits of Company facilities.
The Company encourages the efforts of employees to minimize the
quantity of waste generated by Company operations and to recycle
waste which is produced. Innovative waste minimization not only
protects the environment by reducing the volume of waste generated,
it may also result in reduced operating costs for the Company.
All employees should be aware that the violation of environmental laws
may result in the imposition of significant civil and criminal penalties for
the Company as well as for individual employees. Many of the laws that
apply to the Company's operations in the US. provide for civil penalties

46


  384154
VIC

EXH012-03086


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Page 48 of 58
=============

' in the amount of $25,000 per violation, and they make each day of violation
a separate offense. Criminal penalties for environmental violations may
be as much as fifteen (15) years imprisonment per violation. Severe criminal
and civil penalties for environmental violations may also be imposed in
other countries in which the Company conducts its business.

Advice should be sought with respect to requirements and powers of
enforcement agencies in jurisdictions outside of the United State;.

EC 38015916

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-XH012-03087


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Investments and Outside Businoss Interests
of Officers and Employees



Employees of the Company have injuired from time to time as to the
propriety of their association with, or the investment of their personal
funds in, business enteaprses similar in character to certain activities of
the Company. In response, the Company has established certain princi-
ples for the guidance of officers and emp~oyees with respect to personal
business and investment interests.

The primary consideration of the employment of every full-time (regular
as well as temporary) officer and employee should be the fact that the
employer is entitled to expect of every such person complete loyalty to
the best interests of the Company and the maximum application of skill,
talent, education, etc., to the discharge of job responsibilities, without any
reservations whatever. Therefore, it follows that no full-time officer or
employee should:

(a) Engage in any outside activity or enterprise which could interfere
in -n-, ;,-y with rvb psrformance,
(b) Make investments or perform services for his or her own or
related interest in any enterprise under any circumstances where,
by reason of the nature of the business conducted by such
enterprise, there is, or could be, a disparity or conflict of interest
between the officer or emplo; ee and the Company; or
(c) Own an interest in or participate, directly or indirectly, in the
profits of any other entity which does business with or is a
competitor of the Company, unless such ownership or participation
has been previously disclosed in writing to the Chairman of the
Board and Chief Executive Officer of Enron Corp. and such officer
has determined that such interest or participation does not
adversely affect the best interests of the Company.

  Notwithstanding any provision to the contrary in this Policy on
Investments, securities of publicly owned corporations which are
regularly traded on the open market may be owned without disclosure
  if they are not purchased as a result of confidential knowledge about
48


  EC 38015916.1

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the Company's operations, relations, business, or negotiations with such
corporations.
if an im'estment of personal funds by an officer or employee in a venture
cr enterprise will riot entail personal services or managerizz1 attention,
and if there appear' to be no conflict or disparity of interest involved,
the following procedure nevertheless shall be follower if all or any part
of the busin'ss of me venture or enterprise is identical with, or similar
or directly related to, that conducted by the Company, or if such business
consists of the furnishing of goods or services of a type utilized to a
material ertent by the Company:
  (a) The officer or employee desiring to make such investment st.al.'
submit in writing to the Chairman of the Board and Chief
Executive Officer of Enron Corp. a brief sumwaryy of relevant
facts; and
(b) The Chairman of the Board and Chief Executive Officer of Enron
Coi p. shall consider carefully the summary of relevant facts,
  and if he concludes that there appears to he no probability of
.imp conflict of inter,st aris:no out of the proposed investment, .
the officer or employee shall be so notified and may then make
the proposed investment in full reliance upon the findings of
the Chairman of the Board and Chief Executive Officer of
  Etiron Corp.
In the event the Chairman of the Board and Chief Executive Officer
of Enron Corp. should desire to make such an investment, he may
do so only upon approval of the majority of a quorum of the Executive
Committee of the Board of Directors of Enron Corp., other than himself,
at any regular or special meeting of such Committee.
Every officer and employee shall be under a continuing duty to report,
in the manner set forth above, any situation where by reason of economic
or other interest in an enterprise there is then present the possibility of a
conflict or disparity of interest between the officer or employee and the
Company. This obligation includes but is not limited to (1) any existing

EC 38015917
  49

=XH012-03089



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=============

personal investment at the date of promulgation of this policy, (2) any
existing personal investment at the time of employment of any officer
or employee by the Company, and (3) any existing personal investment,
whether or not previously approved, which may become in conflict with
the provisions of this policy because of changes in the business of the
Company or changes in the business of the outside enterprise in which
investment has been made.

In the event of a finding by the Chairman of the Board and Chief Executive
Officer of Enron Corp. (or by the Executive Committee of the Board of
Directors of Enron Corp., if applicable) that a material conflict or disparity
of interest does exist with respect to any existing personal investment of
an officer or employee, then, upon being so notified, the officer or
employee involved shall immediately divest himself or herself of such
interest and shall notify the Chairman and Chief Executive Officer of
Enron Corp. (or the Executive Committee, if applicable) in writing that
he or she has done so.

'e

  so



  EC 38015917.1 -

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Responsibility for Reporting

The Company has established a reporting system that allows officers,
employees, and other agents of the Company to report violations of any
of the Policies set forth in this booklet, or other Company policies, as well
as any suspected criminal conduct by any officer, employee, or agent of
the Company relating to the performance of his or her duties.
Upon observing or learning of any such violation or criminal conduct,
employees should report the same by writing a letter describing the
suspected violation or criminal conduct with as much detail as possible
and sending the letter to:
  Enron Compliance Officer
  CONFIDENTIAL - Conduct of Business Affairs
P O. Box 1188
  Houston, Texas 77251-1188.
Employees may also report the same by telephoning the Office of the
Chairman of the Company at (713) 853-7294 or sending ccmail addressed
to the Office of the Chairman. If an employee places the call from his or
her extension, or an outside line, the message will be completely anony-
mous. Similarly, ccMail addressed to the Office of the Chairman will
also be completely anonymous.
The employee may (but is not required to) sign the letter or ccMail.
Anonymous letters and anonymous ccMail will be investigated and
acted upon in the same manner as letters and ccMail which contain a
signature. All letters and ccMail should contain as much specific detail
as possible to allow the Company to conduct an investigation of the
reported matter.
All letters, ccMail, and telephone calls submitted shall be kept in
confidence and acted upon only by designated objective Company
personnel unless disclosure is required or deemed advisable in
connection with any governmental investigation or report, in the
interest of the Company, or in the Company's legal handling of the
matter. The Company will not condone any form of retribution upon

EC 38015918 51

=XH012-03091


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=============

any employee who uses the reporting system in good faith to report sus-
pected wrongdoers, unless the individual reporting is one of the viola-
tors. The Company will not tolerate any harassment or intimidation of
any employee using the reporting system.



52


  EC 38015918.1

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Complianc Administration

R

It is a condition of employment that each employee a:cept the responsi-
bility of complying with the foregoing policies. The Company will
require each employee of the Company to complete and submit a
statement in a form designated by the Company pertaining to such
employee's complianre with the policies set forth in this booklet.
The Company reserves the right to request any employee to
complete and submit such statement at any time or as frequently
as the Company may deem advis^.ble.

The Chairman of the Board and Chief Executive Officer of Enron
Corp. may from time to time at the Chairman's discretion delegate
any of the responsibilities to be fulfilled by the Chairman as herein-
above set forth. Such delegation may be made to any executive
officer of the Company.

An employee who violates any of these policies is subject to discipli-
nary action including but not limited to suspension or termination of
employmcni, and such other action, in:Iu.:irg legal action, as the
Company believes to be appropriate under the circumstances.

EC 38015919

  53

EXH012-03093


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=============

Notes



  54
J


i
  EC 38015919.1
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Notes

EC 38015920

  55

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Notes


1

EXH012-03096



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Page 58 of 58
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EC 38015921

Guun1 7_n4nQ7