Clapp, Gene = — iiieas

Sone roa October 15, 2001 10:57 AM
Stewart Elzsbeth -

To:

BRIEFLY NOTED...Sources say India's finance ministry will also take up with
international lending agencies, including the World Bank and the ADB to delink
the concessional loans from stringent conditionalities like procurement of
goods, services and equipment from the developed countries dominating these
agencies, reports the Hindustan Times.

In a bid to restrict the controversies like Dhabol Power Corporation and CESCo,
the Indian government on Priday announced it would restructure all the 450 power
circles and invest in strengthening the power distribution system during this
fiscal year, reports the Hindustan Times, noting that the World Bank has said
the Indian government needs to play a pivotal role in creating a conducive
environment for power sector reforms.

00500000001907


built for the jeta of the visiting heads of state.

4. Monetary and Finance Code draft published

The Listin Diario has published the draft proposal for a new
monetary and financial code prepared by the Central Bank. The
proposed code would replace the one currently stagnating in the
National Congress. The new version grants the Monetary Board the
flexibility to decide aspects that were written into law in the
past,

5S. Power companies pictured as modern day pirates

To dramatize the plight of power consumers in the Dominican
Republic, the government's High Level Advisory Commission to Reform
the Energy Sector has published a communiqué with a picture of a
pirate landing in the DR. In the communiqué, the commiesion
criticizes that Kevin Manning, general manager of the Itabo
generating company, has retracted hie offer to lower prices to 5.5
cents per kilowatt/hour, The retraction came because government
negotiators awarded the company a 27% increase over the 5.5 cents
per kilowatt/hour the company had been willing to accept. The
commission criticizes that Manning, in his previous post as general
manager for Smith-Enron power generation plant in Puerto Plata had
wanted to bill the state US$65 million to later recognize that the
debt was less than US$26 million.

“Itabo and Mr. Manning, with their attitude, clearly reveal that
they are on the side of those who believe the era of pirates and
leoting corsairs is not over. They believe that our country should
continue to be sacked by those now disguised as energy businessmen.”
The commission urges Dominican businessmen and consumers not to
accept the blackmail and sabotage that is manifested in unjustified
blackouts. It urges Dominicans to stop taking a passive role and
confront a problem that belongs to everyone.

Commission members have criticized Dominican government officers
Cesar Sanchez and Jose Ovalles for their complicity with the
distributors against the welfare of consumers.

Ever since the arrival of the first private power generators during
the Balaguer administration, power companies have taken advantage of
the weaknesses of Dominican government negotiators. In the past,
Consumer interests have not been given priority in the negotiations
of privatigation contracts by the Commission for the Reform of State
Enterprises (CREP) or in the passing of the Electricity Law by
Congress. The Chamber of Deputies then blamed the increase in
advantages gained by the companies to instructions from the
Presidency.

6. Edesur/Edenorte department heads arrested

The head of personne] and the manager of power for Edesur/Edenorte
(Union Penosa) were arrested on Friday, blamed for causing
intentional blackouts. The arrests were in response to major
eriticiem by the CDE after the country endured four total blackouts
this month.

Cesar Sanchez, manager of the Dominican Electricity Corporation

{ ), also publicized his visit to the Haina power generating
station suspected of causing intenticnal blackouts, as reported on
Friday by Ultima Hora.

On Friday, the Superintendency declared a state of emergency in the
energy sector and obligated power companies to stabilize the
service. Power Superintendent Jose Ovalles said afterwards that
there was an improvement in the service.

Meanwhile, President Mejia was interviewed on the matter in Peru
where he had travelled to participate in the Iberoamerican Summit.
He said that declaring the electricity system in a state of
emergency was a “disparate.” (foolish remark)

In his opinion, the electricity crisis will be resolved in the short
term when a 300-megawatt barge in San Pedro de Macoris goes into
service.

00500000001858


Dominican Rep (Document

link: Todd W. Crawford)

I've attached a description of the one WB project that the September MOS says is

in the pipeline.

I haven't figured out how to find the IFC's Monthly Operations

Report on line. Someone else here can probably tell me. However, I think Abby

may know how to find it.

for some time. [(b)(5)]

Dominican Republic

Power

Regarding the WB project below, it'a been in the works

Power Market Developeent: The project's overall objective is to support power
sector reform by establishing a competitive bulk-supply market for electricity.

Specifically, the project seeks to lift transmission constraints that hinder
open access of power generators and to (a) support installation of an Enersy

Control Center (BCC) and Financial Settlement Center (PSC); (b) strengthen and
expand the Interconnected Transmission System; (c) provide technical assistance
to sector policy and regulatory entities and promote rural electrification; and

(d) contribute to separation costs for sector staff. Negotiations are

tentatively scheduled for November 2001. Environmental Assessment Category B. us

$ 90.0 (IBRD). Consulting services will be required to support power sector
reform and regulatory agencies. Implementing agenci
transmission/dispatch component: Corp Dominicana di
Cesar Sanchez, Gen. Administ., Ave. Independencia, esq. Winston Churchill,

Por the
ectricidad (CDE), Ing.

Centro de los Heroes, La Feria, Sto.Domingo, DR, Tel: (809) 533-3807, Pax: (809)
$34-6760, Email: cderd01gcodetel.net.do

Dwooldridge@Worldbank.Org

MbudingtonéWorldbank.Org

Luyen.Transdo
.treas.gov To: Gjohnson3eWorldbank.Org,
eer Terawford@Worldbank.Org,
09/25/2001 Subject: RE: Enron IFC energy project in

Dominican Rep

i‘m assuming this is something you could do quickly with your access to the

03:47 PM

bank's database?

let me know if i need to do anything on my end. thanks.

>
>
>
>

From:
Sent:
To:

--Original Message-----

Conley, Robert
Tuesday, September 25, 2001 3:13 PM
Tran, Luyen; Altheim, Stephen; Demopulos, Abigail

2

00500000000439


.¢
DRF]
November 27, 2001
TO: Norman Carleton
Office Director
Office of Federal Finance Policy Analysis
FROM: Heidilynne Schultheiss
Financial Analyst
Office of Federal Finance Policy Analysis

SUBJECT: Chronology of Enron Events and Recent Financial Turmoil

{((b)(5))

00754

01200000000099


has no assets other than a one-third stake in Azurix, a subsidiary that owns British water utility
Wessex. Enron Treasurer Ben Glisan stated that assets could be sold to pay off the noteholders,
raising at least $2,2 billion, including $1.55 billion in proceeds from the sale of the Portland
General Electric utility. In a worst-case scenario, it could issue as much as $1 billion in stock
(there are currently 850 million shares outstanding), although Enron's share price had declined
75 percent from its high. An analyst estimated that Enron could have close to $9 billion in off-
balance sheet debt, and had been trying unsuccessfully to sell $6 billion in illiquid foreign assets
for years.

On October 24, Enron reported it had $3.35 billion in bank lines of credit, of which $1.75
billion would expire in May 2002 if not renewed. However, analysts still seemed to be
mesmerized by Enron. Goldman Sachs downgraded Enron from its “U.S, Select List” of a few
dozen stocks to its “Recommended List” of 200 stocks. Only Prudential downgraded Enron to a
“sell” rating. Of 17 analysts, 10 still maintained a “strong buy” rating. Critics charged that
analysts had compromised their objectivity, especially since Enron has retained many Wall
Street firms for its offerings and paid a substantial amount of investment banking fees.

On October 25, Mr. Fastow took a “leave of absence” from Enron, and Mr. McMahon
was named CFO, Concers arose regarding a potential destabilizing effect on the energy trading
market, since Enron trades approximately 25 percent of U.S. OTC electricity and natural gas
contracts, particularly through its popular EnronOnline Internet trading platform, The notional
value of its derivatives portfolio was estimated at $21 billion, and there were fears that utilities
and commercial and investments banks could be affected as well. J.P. Morgan Chase was
mentioned, as it advises Enron on asset sales, provides credit to Enron, has the largest derivative
operation of any bank, is a counterparty to Enron in some transactions, and has a large
commodity trading business. Enron's creditworthiness was questioned. Enron's stock price
declined again and it was the most actively trade NYSE stock at nearly 76 million shares,
included some large blocks of 800,000 shares or more reportedly sold by institutional investors.
Share prices for other energy trading companies declined as well, Additional analysts issued sell
recommendations for Enron,

On October 26, Enron drew down $3 billion of its $3.35 billion bank credit lines to
redeem $1.85 billion of outstanding commercial paper that it was unable to roll over, and to
provide it with a cash cushion. Citigroup and J.P. Morgan Chase reportedly each extended at
least $400 million, Enron reportedly was negotiating an additional $1 to $2 billion credit line,
although the banks were insisting on stricter covenants and terms. Fitch placed Enron on review
for a possible downgrade, and S&P changed its credit outlook to negative from stable. Enron's
bonds, although still investment grade, traded at a 770 bp spread to Treasurys, in the same range
as junk bonds, with yields rising above 10 percent, and liquidity was described as poor. The cost
of a default swap rose to 10 from 8 percent of the size of the credit insured. Enron sued
Microsoft over its failed broadband services arrangement. Critics noted that Enron would
receive $254 million in tax benefits in the current House stimulus package.

On October 29, European energy firms reportedly were reluctant to trade with Enron, one
of Europe’s biggest power and gas traders. Some counterparties avoided Enron, and liquidity
was reduced. Its stock hit a five-year low. Moody's downgraded Enron's senior unsecured

? 01182

01200000000538


Kosmides, Ivy

From: Kosmides, Ivy

Sent: Thursday, September 20, 2001 11:51 AM
To: “Peacock, Charles E'

Subject: RE: Appointment

Charlie,

Scag I would like to attend. If Kris's schedule accomodates, then meeting after the
works for me, Let's do it that way. For building clearance, my DOB is {(b)(6)]

(Oe y) social ie {(o)(6)]

--Original Message-----
From: Peacock, Charles E (mailto: PeacockCEé@state.gov)
Sent: Thursd September 20, 2001 11:52 AM
To: ‘Ivy. sado.treas.gov"
Subject: RE: Appointment

He says ENRON'’s creditors are due $31 million in December and unless the
GODR pays up, it will be in default. The company is considering taking the
GopR to international arbitration as per the contract. [(b)(5)]

tf
you want to attend the meeting and then stay on to talk to Kris, that's
fine, Just let me know so I can arrange something else for him at 10:00.
Charlie

--Original Message -----
Prom: Ivy.Kosmides@do.treas.gov (mailto; Ivy.Kosmidesedo,tre:
Sent: Thureday, September 20, 2001 9:57 AM
To; PeacockCE@state.gov
Subject: RE: Appointment

. gov]

Thanks. Did the VP have an agenda? Why don't I attend that meeting, and
then we can stay a little later to discuss anything else on the DR instead
of meeting at 107

oseee Original Message---~-~

Prom: Peacock, Charles & [mailto:PeacockCbestate.gov]
Sent: Thursday, September 20, 2001 8:31 AM

To: ‘Ivy.Kosmidese@do.treas.gov’

Subject: RE: Appointment

Ivy.

John Hardy, the VP at ENRON for governmental affairs, called me yesterday.
He wants to meet with me next week. Since Kris will be in town, I arranged
to do it here on Tuesday at 3:30. You're welcome to attend if you want.
Charlie

eos! Original Message-----~

From: Ivy.Kosmides@do.treas.gov [mailto:Ivy.Kosmides@do.treas.gov)
Sent: Wednesday, September 19, 2001 6:05 PM

To: PeacockCE@state.gov

Subject: RE: Appointment

Thanks, Charlie.

You might ask him to come with information on reserves, and arrears to
Independent power producers if possible. I imagine he will have sore up to

1

00500000001844


{(b)(5))

, 00760

01200000000105


apologies for the in sending this material, | have lost both
assista: Perms anata ouemtuines: ~

will be the tomorrow at 3. His SS# is
rc Tk :

Hi
birth if remind
HENS) brme meetng woud spprecte | menaged t lose Mat ss

00500000001866


Fisher, Peter

From: Schlesinger, Jacob Siacob SciecingerGe cond
Sent: Tuesday, November 27, 2001 1:35 PM

To: ‘Peter Fisher@do.reas.gov’

Peter:

I hope you had a good Thanskgiving. If you've got three minutes, I'd love to
talk on whatever basis is appropriate about Enron, Our folks are very eager
to know what the government sees/thinks, and all our sources point us to you
as the point-person on this

Also, I'd love to try again to set up that lunch. But in the meantime, this
is more pressing.

I'll try to call in a bit, but my number is below if you want to call.

Jake

Jake Schlesinger
office: [(b)( yy

Setts [(b)(6)]

01200000001455


John and | have a brief agenda: 1) we want to update you on Dabho! and 2)
we want fo discuss way in which the USG may become involved in encouraging

market reform a oes aloe cutcl ox cecaenned oee.
ity, we want to ‘on refgorm at the indian that
il be necessary to deliver power to customers other than MSEB,
‘We look forward to meeting you tomorrow.
(See attached file: Dabhot PPA - DC Talking Points.doc) << File: Dabhol PPA - DC Talking Points.doc >>

00500000001873


{(b)(5)}

00500000001960


{(b)(4)]

00500000001869


Sent

eee

Sy: AVERICAN WIND ENEAGY ASSOCIATION; 2029832505; Feb-24-99 6:44PN; Page 5/7
WIND CREDIT EXTENSION SHOULD BE AMENDED
TO PROTECT CALIFORNIA ELECTRICITY CONSUMERS
Support for Wind Energy Tax Credit with Amendment

Congress is considering an extension of the federal production tax credit (PTC) of 1.5 cents per kilowant-hour (kWh).
The following companies and associations support an extension of the credit with an amendment that would belp
easure that California electricity consumers are not adversely impacted:

Pacific Gas & Electric
American Wind Energy Association
Enron Wind Corporation |

nergy
California Public Utilities Commission
Impact om Electric Energy Costs

Pacific Gas & Electric and Southern California Edison have a large number of projects with electric generation
capacity under fixed-price contracts with wind developers. A significant amount of the megawatts under contract have
not yet been developed. The California utilities were required to sign these contracts as part of California's
implementation of the Public Utility Regulatory Policies Act (PURPA). All of these contracts were executed pricr to
1987, contain fixed-price terms that are significantly above curreat market prices, and are a major component of the
utilities’ stranded costs.

Exending the PTC would provide an incentive for wind developers to either “repowerTM the existing megawats of
developed capacity or “build-out” the remaining megawatts of undeveloped capacity. The electricity produced from
these new wind facilities would be purchased by the utilities at the above-market prices set forth in the pre-1987 fixed-
price contracts. Moreover, these new wind facilities would generate substantial quantities of additional electricity chat
the utilities would be obligated to purchase, significantly increasing the cost of electricity to customers, These cost
increases would add to the already beavy burden that Californians are carrying with respect to power purchases
through these pre-1987 fixed-price contracts. Increasing the utilities’ stranded costs is inappropriate and directly
conflicts with the creation of s competitive generation market in California,

In June 1998, California's major electric utilities, major wind generation producers, and associations represeating
independent power producers and the wind industry agreed to language extending the credit. This amendment
{amsched) would effectively limit the amount of electricity that could be sold at above-market prices by wind
generators pursuant to power purchase contracts entered into prior to 1987, Because California was the only state co
have mandated these types of power purchase contracts before 1987, this amendment would affect only California
wind generators. As a cesult, California electricity consumers would be protected from unnecessary costs increases
while ensuring the economic viability of the wind industry.

OFS

' The term “repower” refers to the removal of an old wind turbine and replacing it with anew, more technologically advanced
machine. Although the capacity racing of the wind turbise |s unchanged, whe repowering dramatically increases the amoust of
electricity generated

00900000000373


Gross, Jared

From: Fisher, Peter

Sent: Tuesday, December 11, 2001 4:53 PM
To: Holahan, Betsy

Ce: Gross, Jared

Subject: RE: quotes

I talked to Greg.
t think I worked it out.
lets hope.

----*Original Message-----

Prom: Holahan, Betsy

Sent: Tuesday, December 11, 2001 2:35 PM
To: Pisher, Peter

Cs: Gross, Jared

Subject: RE: quotes

{(b)(5)]

That's my two cents. I'm open to any disagreement on the above thoughts...

Prom: Fisher, Peter

Sent; Tuesday, December 11, 2001 2:25 PM
To: Holahan, Betsy

Cc: Gro Jared

Subject: FW: quotes

any reactions?
{i haven't read yer).

~-*=-Original Message ---~--

Prom: Ip, Gregory [mailto:Gregory.Ip@waj.com)
Sent: Tuesday, December 11, 2001 12:19 PM
To: "peter, fisher@do.treas.gov’

Subject: quotes

Peter - I have some quotes from you we'd like to use in our article. One
group comes from our conversatoin at the bureau in August, which was on the
record, but I show them to you now in case you have any concerns that
they're out of context, outdated or ctherwise problematic. The other quotes
come from our more recent conversation which I agreed to clear in advance.

01200000001551


epdoad 04) 0) 10mg
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00 AeqUIdAON - }99f01g 19MOd || @BSUd

joyqeg JO SMalA [ELV

00500000001893


Enron reportedly was negotiating an additional $1 to $2 billion credit line, although the banks
were insisting on stricter covenants and terms, Fitch placed Enron on review for a possible
downgrade, and S&P changed its credit outlook to negative from stable. Enron's bonds,
although still investment grade, traded at a 770 bp spread to Treasurys, in the same range as junk
bonds, with yields rising above 10 percent, and liquidity was described as poor. The cost of a
default swap rose to 10 from 8 percent of the size of the credit insured, Enron sued Microsoft
over its failed broadband services arrangement. Critics noted that Enron would receive $254
million in tax benefits in the current House stimulus package.

10/28/01 Enron held a special Sunday board meeting to consider investor confidence and
liquidity.

10/29/01 European energy firms reportedly were reluctant to trade with Enron, one of
Europe's biggest power and gas traders. Some counterparties avoided Enron, and liquidity was
teduced. Its stock hit a five-year low. Moody's downgraded Enron's senior unsecured long-
term debt by one notch to Baa2 from Baal, still two levels above junk bond status, citing the
write-downs, equity charges, and partnership investments. It stated that it may downgrade
Enron’s commercial paper P-2 rating as well, making it more difficulexpensive for Enron to
borrow short-term cash. Royal Dutch/Shell reportedly was interested in purchasing Enron, and
had approached it earlier in August. The SEC transferred its inquiry to its Washington D.C.
headquarters.

10/30/01 There were rumors that GE Capital, Berkshire Hathaway or Royal Dutch
Petroleum might buy Enron. Its stock increased 25 percent, rebounding from a nine-year low,

10/31/01 The SEC began formally investigating the Fastow partnerships. Large energy
traders were reported as willing to do business with Enron, but at shorter maturities and using
less complex structures, Trading on EnronOnline was reportedly strong. However, few firms
would accept Enron as a guarantor of credit derivatives, some counterparties in its core energy
markets refused to transact, and two members of the InterContinental Exchange refused Enron's
credit,

1/L/OL Enron received a $1 billion loan from J.P. Morgan Chase and Salomon Smith
Barney, using natural gas pipelines (Northern Natural Gas and Transwestem Pipeline) as
collateral. Proceeds from this secured loan were to be used for debt payments and to supplement
cash reserves, and it could borrow an additional $200 million from other banks. This was
perceived as a desperate attempt to preserve its creditworthiness. It reportedly was unable to
issue commercial paper (at least at lower rates), and two energy companies (Exelon and
Northeast Utilities) restricted business with Enron, Its stock declined 16 percent, and its notes
had declined substantially as well.

1V/S/O1 Fitch downgraded Enron's senior unsecured debt rating from BBB+ to BBB-, one
notch above junk status, citing its liquidity difficulties, crosion of investor confidence, and
substantial diminution of its global investments financed with aggressive off-balance sheet
vehicles, Fitch also lowered Enron's subordinated debt from BBB to BB, its preferred stock
from BBB- to B, and its commercial paper from F3 to F2. It also lowered the senior unsecured

01190

01200000000546


Christopulos, Greg
Wednesday, July 25, 2001 5:06 PM
Sampliner, Gary, ‘tcrawtord@worldbank.org’; 'Recinos, Helen G’; ‘speckig@stale.gov’

Kosmides, Ivy, Sloniewsky, Katerina
RE: MIGA/R2001-0047, Dominican Republic, guarantee to investments in Edenorte and
Edesur

{(b)(5)]

Gary- Please pass e-mails to me. They are still working on my system.

Seta Original Message-----

From: Sampliner, Gary

Sent: Wednesday, July 25, 2001 4:51 PM

To: ‘tcrawford@worldbank.org'; Recinos, Helen G

Ce: Christopulos, Greg; Kosmides, Ivy; Sloniewsky, Katerina
Subject: RE: MIGA/R2001-0047, Dominican Republic, guarantee to
investments in Edenorte and Edesur

((b)(5)]

ocere Original Message-----

From: tcrawford@worldbank.org (mailto:tcrawford@worldbank.org]

Sent: Wednesday, July 25, 2001 4:48 PM

To: Recinos, Helen G

Ce: ‘Gary.Samplinerédo.treas.gov'; ‘Greg.Christopulosédo.treas.gov';
‘Ivy. Kosmides@do. tri .gov'; 'Katerina.Sloniewsky#do.treas.gov’
Subject: RE: MIGA/R2001-0047, Dominican Republic, guarantee to
investments in Edenorte and Edesur

((b)(5)}

"Recinos,

Helen G* To: **Greq.Christopulos@Do.Treas.Gov'
<RecinosiGest <Greg.Christopulos@Do. Treas .Gov>,
ate.gov> "*Katerina.Sloniewskys@Do. Treas .Gov'"

<Xaterina.Sloniewsky@Do. Treas .Gov>,
*'Gary -Sampliner@Do.Treas.Gov'"TM

07/25/2001 «Gary. Sampliner@Do.Treas.Gov>,
** Ivy. Kosmides@Do, Treas .Gov'*
03:86 PM <Ivy. Kosmides@bo. Treas .Gov>,

“*Tcrawfordsworldbank.Org’"
<Terawford@Worldbank .Org>
cc;

:

00500000001837


DEPARTMENT OF THE TREASURY
OASIA/Office of International Investment
4500 Pennsylvania Avenue, N.W.
(Attn: 1440 New York Ave, Room 4201)
Washington, D.C. 20220

TEL: (202) 622-1860
FAX: (202) 622-0391

FACSIMILE
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FROM: TEL:
DATE: PAGES: (including cover)
SUBJECT:

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{(b)(5)]

, 00759

01200000000104


CHRONOLOGY OF ENRON EVENTS

July 1985 Enron was formed as a result of the merger of two troubled gas pipeline firms,
Houston Natural Gas and InterNorth of Omaha, Nebraska, creating and interstate natural gas
pipeline company with 37,000 miles of pipe.

1989 GasBank, the precursor to the North American and European wholesale trading business,
was launched and Enron began trading natural gas commodities, Following the deregulation of
the U.S. natural gas industry, the market had to revise its methods of contracting for gas in the
wholesale market. GasBank allowed producers and wholesale buyers to purchase firm gas
supplies and hedge the price risk of the new spot market simultaneously.

1990 Controversial CFO Andrew Fastow joined Enron.

1993 Enron and CALPERS created the Joint Energy Development Investments LP (“JEDI”) to
make energy investments, An Enron affiliate served as its operator, and Enron and CALPERS
each contributed $250 million. This arrangement allowed Enron to bring in outside equity and
borrow large sums for asset purchases without a revelation on its balance sheet, since restraining
its debt load was critical to maintaining its credit rating and sustaining its tremendous growth.

1997 Fastow became Enron’s CFO,

1997 Enron established its Chewco employce-related entity, run by Michael Kopper, former
Managing Director of Enron North America, with $400 million in capital commitments. Its
purpose was to “purchase from Enron an interest in a defined pool of Enron assets.” Enron and
Chewco reportedly did hundreds of millions of dollars in business, Cheweo's capital
commitments later were quantified as $400 million.

1997 CALPERS sold its interest in JEDI back to Enron for about $375 million, and
simultaneously invested $500 million in JEDI II, a new Enron partnership. Cheweo bought the
JEDI interest formerly held by CALPERS from Enron, possibly with funds borrowed from JEDI
as ascertained from debtor filings with the Texas Secretary of State.

December 1999 Fastow, with the approval of the Enron board, created and managed two
limited partnerships (“related party arrangements”), LIM Cayman LP and the larger LJM2 Co-
Investment LP, possibly with Kopper. Their purpose ostensibly was to “hedge certain merchant
assets and transactions and the fluctuating values of its growing portfolio of assets” (of more
than $100 million), and to enter into “share-settled costless collar arrangements” and “derivative
instruments, including swaps, puts, and collars, which climinated the contingent nature of
existing restricted forward contracts.” LJM raised only $16 million, but LJM2 raised at least
$200 million, Investors included CSFB, Wachovia, GE Capital, and The Arkansas Teachers
Fund. Enron reportedly had been strapped for cash and sought to entice outside investors to
strengthen its balance sheet. The arrangements involved Enron assets, millions of shares of

01185

01200000000541


From: tcrawford@worldbank.org
— Tuesday, September 25, 2001 5:05 PM
‘0:

Ce: abigail.cemopulos@do.treas.gov, ik.org; giohnson3@Qworldbank.org:
eet olny Leven. Trane Noes Oey: gl
robert.coniey@do, .gov; sara. paulson@do.treas.gov, stephen.altheim@do.treas,

Subject: RE: Enron energy easily in Dominican Rep sil gee

Turns out that the IFC doesn't put its IFC's Monthly Operations Report on line.
The paper version shows two items for the DR. One ig a $50 million loan to 4
container port, Caucedo. This project actually appears on an IFC web site that
lists up-coming projects that involve some kind of environmental assessment.
I've attached a brief description of that one below. The other one is a $20
million loan to Banco Popular Dominicano, the purpose of which is not clear.
Both of these investments appear to be in fairly late stages of development /IFC
credit committee review.

Description of Caucedo project:

The Project consists of
construction and operation of a
greenfield container terminal in
a free trade zone on the Caucedo
peninsula about 24 km east of
Santo Domingo, the capital of
the Dominican Republic (DR). The
container terminal will include
a breakwater, dredging of the
berth area and approach, and 600
m of berth space. Containers
will be stored immediately
behind the pier. A full suite of
container services will be
offered. It is expected to be
operational in 2003. The
commercial free trade zone (not
part of the IFC investment) is
expected to consist of cargo
handling operations,
warehousing, and light
manufacturing.

Todd W.
Crawford To:
Luyen.Tran8Do. Treas .Gov,

Robert .Conley@Do. Treas .Gov,

09/25/2001 Sara. PaulsonsDo.Treas.Gov,
Stephen.AltheimaDo.Treas.Gov

04:10 PM ce: Dwooldridge@Worldbank.Org, Gjohnscn3
@¥orldbank.Org, Michele

80112 Epso2 Shannon Budington Eds, Karen Zens Eds,

Abigail .Demopulos@Do.Treas.Gov
Subject: RE: Enron IFC energy project in

1

00500000000438


systemic risk since LTCM, why, or why not. Peter was talking to us (on the
record) in August about this issue. We'd like to follow up on that
discussion, and on things like the report of the Financial stability Forum
on enhanced disclosure that he chaired, to see where he thinks we've made
progress and where more work needs to be done. As I mentioned, we are on a
short deadline but if he can't do it by tomorrow, Thursday would probably
also work.

Thanks.

Greg Ip

Economice Reporter

The Wall Street Journal
202-862-9238 (office)

((b)(6)]

oooee Original Message-----

Prom: Betsy.Holahan@do.treas.gov (mailto: Betsy.Holahanedo.treas.qov]
Sent: Tuesday, December 04, 2001 11:56 AM

To: Ip, Gregory

Subject: Interview Request

Greg,

Can you e-mail me more specifics about the derivatives story you are working
on? What types of things you would like to discuss with Peter, etc. Thanks!

Betsy

01200000001565


@| Todd W. Crawford 02/25/2000 05:25 PM
ae SF

Gem: 80112 EDSO1

Subject: Re: nigeria/enron power contract ‘2)

Mefinda,
I've just seen this. I've forwarded it to Cynthia McCaffrey and Janice Mazur to get thelr reactions.

Todd
"Kimble, Melinda L* <KimbleML2@state.gov> on 02/25/2000 03:46:24 PM

Yr “Kimble, Melinds L" <KimbleML2@scate.gov> on 02/25/2000 03:46:24
~a> PM

Tor Todd W. Crawford ce: "Reid, } Paul"
Subject: nigerta/enron power comuract

Todd: ae you may kriow, ENRON came in to brief AF and EB today on che
problems they are having with their conceact to previde power to Lagoc

Scare: [(b)(5)]

any thoughts you
have in this regard would be welcome, Thanks. Melinda

To: "Kimble, Melinda L" <Kimblemi2@State.Gov>
cc: | “Reid, ] Paul” <Reidip@Suae.Gov>

Cynthia Mecaffrey

Janice L. Mazur Eds

00500000000879


Hart, Anna

From: jacob [Jacob. Schlesinger@wsj,
Sent: fear Scie 38 ose Se Pt cote
To: ‘Peter. ishergedo reas gov

s quick off the record question on new systemic risks...

So now we hear that officials are worried about energy companies and what
their exposure would be (and what repercussions would be) if Enron suffered
another serlous blow. I'd love to talk with you about this. Please call me
at the office at 202-862-6658, or at home at {(b)(6)} or cell at
((>)(6)]

anks,
Jake Schlesinger

01200000001606


00500000001863


Energy Products and the Commodity Futures Modernization Act of 2000
{(b)(5)]

01205

01200000000561


2001 Enron’s 2000 year-end financial statements cryptically described transactions with the
Fastow partnerships, including the transfer from Enron of assets valued at $1.2 billion, including
$150 million in notes payable, 3.7 million restricted Enron shares, and a call option to buy as
many as 18 million Enron common shares in March 2003. Enron also transferred to the
partnerships other assets valued at $309 million, including a $50 million note and “an investment
that indirectly held warrants convertible into common stock of an Enron equity method
investee.” In return, Enron received economic interests in the entities, $309 million in notes
receivable, and $1.2 billion in notes receivable as a “special distribution.” It also mentioned a
series of purchases by Enron of “share-settled options from the entities” on shares of Enron's
common stock.

March 2001 Enron made a $35 million purchase from the Cheweo partnership run by Kopper.
The form and effect of the payment are unclear, It is thought that Enron purchased the balance
of the JEDI entity from Cheweo. Enron then consolidated JEDI's assets and liabilities into
Enron, Its SEC filing indicated that its holdings included 12 million shares of Enron stock, and
that it had paid off about $620 million of JEDI “third-party debt.”

430/01 LJM2 reported that Fastow, and possibly others, realized more than $7 million in
management fees and $4 million in capital increases on an investment of nearly $3 million.
Profits were improved by the carly termination or renegotiation of transactions, The partnership
had raised $394 million and invested in power plants and Enron assets and stock, seeking a 29
percent IRR (reduced from 48 percent) after the decline in the New Power Co, retailer, Large
cash distributions had been made to investors

630/01 Enron reported $33.6 billion in current liabilities and long-term debt, and
attempted to sell off assets to pay down debt.

July 2001 Enron created Marlin Water Trust II, selling $915 million in notes due July 15,
2003. Provisions would require Enron to issue stock to noteholders if it was deemed in default if
its stock price fell below $34.13 for three days and its senior debt was downgraded to below
investment grade.

Late July 2001 Fastow severed his relationship with the LJM2 partnership.

2001? Enron dissolved the Fastow financing vehicles, reacquired the Enron shares, and canceled
the note receivable from the partnership after the value of Enron's stock and its broadband
investments dropped sharply.

T3101 Enron officials were reported to have sold 1.8 million Enron shares valued at
about $106 million, as the stock declined from $83 to $45 per share. CEO Kenneth Lay sold
429,614 shares worth $25.7 million as a result of stock options, leaving him with 2.8 million
shares. In 2000 he had sold $30.7 million; in 1999 he sold $26 million. Kenneth Rice, former
chairman and CEO of the broadband unit, sold $23.7 million, reducing his 1.5 million shares by
456,966. President Skilling sold 160,000 of his 1.9 million shares for $9.8 million. Aggregate
sales by Enron executives totaled 5.8 million shares for $449 million, In 1999, they had sold 3.4

01187

01200000000543


“Recinos,

Helen G" To;
**Greg.Christopulos€Do.Treas.Gov'TM

«RecinosHGest <Greg.Christopulos@de.Treas.Gov>,

ate .gov>

“*Katerina.SloniewskyS$Do.Treas.Gov'"
<Katerina.Sloniewsky@Do. Tr:

"'Gary.Sampliner@Do.Treas.Gov'"

07/25/2001 <Gary.Sampliner@Do.Treas.Gov>,
“' Ivy. Kosmides@Do. Treas .Gov'"
03:56 PM <Ivy.Kosmides@Do.Treas.Gov>,

“' Terawford@Worldbank.Org'*
<TerawfordéWorldbank.Org>

ec:

Subject: RE: MIGA/R2001-0047,
Dominican Republic, guarantee to
investments in Edenorte and Edeaur

I have forwarded your email to our investment office. ((b)(6)]

((b)(5)}

((b)(5)]

eceeal Original Message----~

From: Greg.Christopulosedo.treas.gov
[mailto:Greg.Christopulosédo.treas.gov)

Sent: Wednesday, July 25, 2001 2:05 PM

To: RecinoshgsState.Gov; Katerina.Sloniewskyedo.treas.gov;
Gary.Samplinerédo. gov; Ivy.Kosmides@do.treas.gov;
TCrawford@WorldBank.org

Subject: RE: MIGA/R2001-0047, Dominican Republic, guarantee to
investments in Edenorte and Edesur

((b)(5)]

Gove,

00500000001841


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01200000000732


November 27, 2001

TO: Norman Carleton

Office Director

Office of Federal Finance Policy Analysis
FROM: Heidilynne Schultheiss

Financial Economist

Office of Federal Finance Policy Analysis
SUBJECT: — Chronology of Enron Events and Recent Financial Turmoil

Background

The stock and debt prices and credit ratings on Enron Corp. fell precipitously following
the disclosure of a third quarter loss, possible accounting irregularities, questionable related party
arrangements with company officers, and an SEC formal investigation in October 2001. The
following chronology of events preceding and through the recent financial turmoil at Enron
summarizes publicly available imperfect information for a company renowned for its opacity and
reluctance to disclose information, It was compiled from an assortment of public sources whose
accuracy and completeness cannot be independently verified, and thus must be evaluated
cautiously in that context.

Pre-Turmoil Enron Chronology

Enron was formed in July 1985 as a result of the merger of two troubled gas pipeline
firms, Houston Natural Gas and InterNorth of Omaha, Nebraska, creating an interstate natural
gas pipeline company. Enron first became involved in derivatives transactions in 1989, when
GasBank, the precursor to the North American and European wholesale trading business, was
launched and Enron began trading natural gas commodities. Following the deregulation of the
U.S. natural gas industry, the market revised its methods of contracting for gas in the wholesale
market. GasBank allowed producers and wholesale buyers to purchase firm gas supplies and
hedge the price risk of the new spot market simultaneously. Enron subsequently transformed
itself from a natural gas pipeline company into a more diversified energy company, specializing
in electricity, water, and bandwidth telecommunication markets, as well as risk
transference/derivatives markets. In 1999, Enron launched EnronOnline, the first global web-
based commodity trading site, and Enron subsequently became the world’s largest e-commerce
company. In 2001 it was estimated that 25 percent of OTC energy contracts were transacted by
or through Enron.

In 1990, Andrew Fastow, who would later become its controversial CFO, joined Enron.
At least as carly as 1993, Enron was creating arrangements that allowed it to bring in outside
equity and borrow large sums for asset purchases without revelation on its balance sheet. It is
thought that Enron was attempting to restrain its debt load in order to maintain its credit rating
and sustain its tremendous growth. One such arrangement involved CALPERS.

01178

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00500000001897


to bankrupt Northpoint Communications and other technology investments, and the early
termination of a structured finance arrangement. Excluding the charge, Enron would have met
market expectations, Investors questioned Enron's ability to expand from its successful core
wholesale energy business and its level of transparency. Moody's reviewed Enron for
downgrade. Its debt-to-capital ratio increased to 50 from 46 percent, and it hoped to sell some
assets to reduce it, Enron did not disclose its large reduction in equity in its earnings release, but
instead waited.

On October 17, conflict-of-interest questions were raised regarding limited partnerships
run by Mr. Fastow. The charge related to the early termination of certain structured finance
arrangements was quantified as $35 million, Enron held a conference call with securities
analysts and investors in which it disclosed that its shareholder equity contracted by $1.2 billion
to $9.5 billion as a result of Enron's repurchase of $5 million shares from Fastow (Enron had an
average 913 million shares outstanding in the third quarter) at a lower price and the cancellation
of the partnership note. Enron characterized the reduction as a “result of Enron's termination of
previously recorded contractual obligations to deliver Enron shares in future periods.” An
analyst explained that Enron had promised that a certain amount of Enron's shares would be
worth $1 billion, and when they plummeted and fell below that value, Enron bought them back.
One analyst conjectured that Enron had treated the shares as a buyback, but had never issued
them. The SEC sent a letter to Enron notifying it that it was beginning an informal inquiry.

On October 22, Enron confirmed that it had received a request for information from the
Texas regional office of the SEC regarding its controversial partnerships with Fastow. Analysts
speculated that its Enforcement division was investigating possible violations of securities laws.
The SEC reportedly was reviewing whether the transaction terminations should have been
treated as a balance sheet item or a loss that affected reported earnings (accounting rules specify
that a company’s transaction in its own shares cannot produce profits or losses, whatever the
effect on cash flow); and whether the related-party transactions were properly disclosed under
Rule S-K, where a company must report transactions that exceed $60,000 with “any director or
executive officer.”’ There was speculation that Enron had used the off-balance sheet
transactions to shift losses off its books to avoid an effect on its income statement. Enron's stock
price fell 20 percent and it was the most actively traded NYSE stock with 36 million shares
traded. Concems about Enron’s credit rating emerged. Enron stated that it had properly
disclosed transactions, was cooperating with the SEC, and was confident it would not default, A
class-action suit was filed in U.S. District Court in Houston alleging misrepresentation and
failure to disclose and write down investments, It alleged that Enron insiders sold $73 million of
their holdings during parts of 2000 and 2001.

On October 23, worries arose that Enron might have to issue large amounts of stock in
the next 20 months to noteholders to repay about $3.3 billion in notes ultimately guaranteed by
Enron for certain entities like the Marlin Water, Atlantic Water, and Osprey ventures if certain
trigger events occurred (such as credit downgrades), Marlin owes almost $1 billion in debt and

* However, FAS Statement 57 issued a broader disclosure directive regarding related party
arrangements involving a “material” piece of business between the company and a member of its
management.

4 01181

01200000000537


debt ratings of Enron's pipeline subsidiaries, Northern Natural Gas and Transwestern Pipeline,
from A- to BBB-, whose assets were pledged the previous week to help Enron secure an

additional $1 billion bank facility. All of the Fitch ratings remained at “Rating Watch Negative”
status,

01191

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00500000001891


>

v

veuvVVV

Ce: Crawford, Todd; Budington, Michele; Paulson, Sara;
‘ cbrookinseworldbank.org’
Subject: Enron IFC energy project in Dominican Rep

Two senior reps of Enron met with Bill today on a project funded by IFC
that involves a power purchase agreement [(b)(5)]

on the project.

((b(5)]

The Enron reps plan to meet with State and Carole Brookins

00500000000440


Gross, Jared

From: Gross, Jered

Sent: Tuesday, December 11, 2001 11:44 AM
To: Lakritz, Robb

Subject: RE;

{(b)(5)]

Original Message-
From: Lakritz, Robb
Sent: Tuesday, December 11, 2001 11:33 AM
To; Gross, Jared

Subject: FW:

Who would be the best person to sit in with me on this?
Thanks.

Robb Lakrits

+--+ Original Messag
From: Langdon, Jin Tesiico: jlangdonsAKINGUMP com)
Sent: Tuesday, December 11, 2001 9:33 AM

To: ‘Robb.Lakritz@D0.Treas.gov’

Subject:

Robb....I hope you have found your way back home by now and have readjusted to this time
zone..,.no longer is this easy for me! I would like to visit with you at your convenience
on this credit crunch issue in the energy sector....Moodys and to a lesser extent S&P have
“Enron concerns" with the sector where *Enron issues" simply do not exist. We are
obviously working with the rating agencies in a direct way....however, I would like you to
be aware of these events and to seek any thoughts

which you may have,,,,best regards,,,jcl

The information contained in this e-mail message is intended only for the personal and
confidential use of the recipient(s) named above. This measage may be an attorney-client
communication and/or work product and as such is privileged and confidential. If the
reader cf this message is not the intended recipient or an agent responsib. for
delivering it to the intended recipient, you are hereby notified that you have received
this document in error and that any review, dissemination, distribution, or copying of
this message is strictly prohibited. If you have received this communication in error,
please notify us immediately by e-mail, and delete the original message.

01200000001553


Sent Sy: AWERICAN WIND ENEAGY ASSOCIATION; 2023832505; Feb-24-99 6:43PM; Page 2/7

MEMO

To: Gerry Gerardi
c/o Donna Harrel] (622-1783)

From: Jaime Steve, Legislative Director Ay S
American Wind Energy Association (202-383-2506)

Re: Attendee list for Wind Energy Tax Credit meeting with Ms. Gerri Gerardi / Chris Rizek /
Hudson Milner
Friday, February 26 at | 1:00 a.m.
(Rm. 1312, Main Treasury Bldg.)

Date: February 24, 1999

ATTENDEES
Names bos Organization
1) Jaime Steve [(b)(6)] American Wind Energy Association
2) Robert “Hap” Boyd [(b)(6)] Enron Wind Corp.
3) Michael Pate {(b)(6)] Bracewell & Patterson (for Enron Corp.)

4) Brian Fitzgerald = 4 // prey tte Swidler & Berlin (for FPL Energy, Inc.)

00900000000370


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{(b)(5)]

01200000001423


7. Businessmen lash out against power companies

Businessmen Ignacio Mendez and Campos de Moya of the National
Council of Businesses criticized the Energy Superintendency for
abandoning its role as arbiter and for benefiting only the
distributors of energy. They criticized the complacency of the
institution,

Juan Barcelo, president of the Dominican Association of Exporters
(Adoexpo), said it is difficult these days to distinguish between
generators and distributors “because the distributors have used part
of the capital they were suppose to invest in infrastructure to
install power generators.* Barcelo, Mendez and De Moya all
criticized Resolution 15-01 that penalizes companies for purchasing
power directly from the generators.

Upon the passing of the Electricity Law, the distributors had
already secured from the Chamber of Deputies the increase from one
megawatt to two megawatts of the minimum for companies to disconnect
from the distributors that had been approved by the Senate.
Busineseman Luis Arthur said the General Electricity Law establishes
that power companies have to give consumers two hours of free power
for every hour of unjustified blackout but this is not being
applied,

Mendez and Arthur also criticized the fact that when there is a
problem or breakdown, the electricity companies do not show up to
fix it. Purthermore, Arthur, who owns an electromechanical
engineering firm, said that in the past he could get a new building
connected to power in 15-20 days, Today he says it can take two to
three months because of the inefficiency of the private companies,
especially Edesur and Edenorte. He said that EdeEste (which has the
concession to the East of the country) is working efficiently in
regards to electricity connections.

The businesomen urged the Superintendency to copy the example of the
Dominican Institute of Telecommunications (Indotel) which has a
similar role in the telecommunications sector. They said Indotel is
acting as an arbiter of the system and at the same time defending
consumer rights.

8. Miss Latin America a Dominican

Dominican Claudia Cruz won the 18th Miss Latin America pageant held
at the Bavaro Convention Center over the weekend, She competed
against 20 representativ from Latin America, the United States,
Canada and Spain. Karla Vargas from California won the title Miss
USA Latina and Karla Leclair of Nicaragua was voted aa having the
best traditional costume,

9. Licey has a good weekend

The Licey Tigers defeated the Aguilas del Cibao on Sunday,
whortening the latter's lead to only one game. The Licey won the
game 6-1 in front of 10,000 fans despite the constant threat of
rain, The Estrellas bested the Lions, 8-1, and the Pollos continued
their winning streak defeating the Azucareros 6-3. For the league
standings up to 25 November, see

http: //www.drl.com/daily/news112501.shtml

For a listing of the next scheduled games, see

http: //www.drl.com/baseball/2001-2002 html

SPrerereriererrtrrtiririr irri

DR1 Business Forum with Frederic Emam Zade (Ask Frederic) is at
http: //www.drl.com/business/board/index.cgi
DRI Calendar of Events: http://www.drl.com/daily/calendar.shtml

SORE ERE R EER Ee EERE ERE EEE ER ERROR EERE TEER ESTEE EERE REESE EES aeeeeee

00500000001859


woeeel Original Message----~-

Prom: Peacock, Charles E (mailto:PeacockCE@state.gov]
Sent: Thursday, September 20, 2001 12:54 PM

To: 'Ivy.Kosmides@do.treas.gov"

Subject: RE: Appointment

That's great Ivy. Just plan to arrive a bit before 3:30 at the C St. lobby.
You might be able to get in with your ID. If not, give me a call on
647-4728 and I'l] come down to get you. Charlie

- -Original Message----~-

From: Ivy.Kosmides@do.treas.gov [mailto:Ivy.Kosmides@do.tre
Sent: Thureday, September 20, 2001 12:53 PM

To: PeacockCE@state.gov

Subject: RE: Appointment

-gov)

Charlie,

Thanks, I would like to attend, If Kris's schedule accomodates, then
meeting after the ENRON meeting works for me. Let's do it that way. For
building clearance, my DOB ie [(b)(6)] social is [(b)(6)]

Ivy

weren Original Message
From: Peacock, Charles E [mailto:PeacockCeastate.gov)
Sent: Thureday, September 20, 2002 11:52 AM

To: ‘Ivy.Kosmidesédo.treas.gov'

Subject; RE: Appointment

He says ENRON's creditors are due $31 million in December and unless the
GODR pays up, it will be in default. The company is considering taking the
GopR to international arbitration as per the contract. [(b)(5)]

Tf
you want to attend the meeting and then stay on to talk to Kris, that's
fine. Just let me know so I can arrange something else for him at 10:00.
Charlie

-Original Message-
From: Ivy.Kosmides@do.treas.gov [mailto:Ivy.Kosmides@do.treas.gov)
Sent: Thuraday, September 20, 2001 9:57 AM

To: PeacockCE#state.gov

Subject: RE: Appointment

Thanks. Did the VP have an agenda? Why don't I attend that meeting, and
then we can stay a little later to discuss anything else on the DR instead

of meeting at 10?

cree Original Message-----

From: Peacock, Charles & [mailto:PeacockCEéstate.gov]
Sent: Thursday, September 20, 2001 8:31 AM

To: ‘Ivy.Kosmides@do.treas.gov'

Subject: RE: Appointment

Ivy,

John Hardy, the VP at ENRON for governmental affairs, called me yesterday.
Ke wants to meet with me next week. Since Kris will be in town, I arranged
to do it here on Tuesday at 3:30. You're welcome to attend if you want.
Charlie

o+2-- Original Message-----
From: Ivy,Kosmides@do.treas.gov [mailto:Ivy.Kosmides@do.treas.gov)
Sent: Wednesday, September 19, 2001 6:05 PM

00500000001855


* Prom August:

(regarding how well regulators are equipped to deal with today's financial
products, derivatives, and risk, partly in the context of whether giving
them additional regulations to enforce would be useful })

“We haven't recognized the systemic problem of keeping supervisors skills
sets up to and with skill sets of private sector

(in the context of whether financial institutions are adequately monitoring
their risks, especially in the context of the many voluntary measures
they've undertaken in this regard:)

“Some firms are investing in risk management and are on the cutting edge.
They have competitors who think they're on the cutting edge and they're not.
That gap has widened as much the past 10 years as much as the gap between
(the industry) and supervisors.

From December

When Fisher mentioned the PSF's recommendation of high-low-median
intraperiod reporting of significant positions at an American Bankers
Association meeting recently ((when exactly?}) , "a hundred people looked at
me and shrugged. Progress is slow. Accounting custome change glacially,*

"I'm still unpersuadsed that there was a profoudn public purpose to be
served ... regulating the derivative markets.”

“It's a fair question” whether we should be concerned that nobody regulated
Enron's trading operation. "I don't have enough data on whether or not we
should have been more worried about enrononline.*

Greg Ip

Economics Reporter

The Wall Street Journal
202-862-9238 (office)

{((b)(6))

01200000001552


January 10, 2001

((b)(4)]

00500000001868


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00500000001906


In 1997, Andrew Fastow became Enron's CFO. At least as early as 1997, Enron was
establishing “related party arrangements” or “employee-related entities.” One such arrangement
was the “Chewco” entity run by Michael Kopper, former Managing Director of Enron North

America,

In December 1999, Andrew Fastow, with the approval of the Enron board, created and
managed two limited partnerships related to Enron, LJM Cayman LP and the larger LIM2 Co-
Investment LP, possibly with Kopper. Their purpose ostensibly was to “hedge certain merchant
assets and transactions and the fluctuating values of its growing portfolio of assets” (of more
than $100 million), and to enter into “share-settled costless collar arrangements” and “derivative
instruments, including swaps, puts, and collars, which eliminated the contingent nature of
existing restricted forward contracts.” LJM raised only $16 million, but LJM2 raised at least
$200 million. Investors included CSFB, Wachovia, GE Capital, and The Arkansas Teachers
Fund.

Enron reportedly had been strapped for cash and sought to entice outside investors to
strengthen its balance sheet. The related party arrangements reportedly involved Enron assets,
millions of shares of Enron stock contributed to the structured finance vehicle, and notes
receivable issued by partnership-related entities to Enron. The LJM2 offering document stated
that Mr. Fastow would receive an annual management fee as much as 2 percent, and would be
cligible for profit participation over its ten-year life. The undisclosed general partner was
obligated to invest at least ] percent of the aggregate capital commitments. Subsequent reports
speculated that the arrangements may have been created to retain Mr. Fastow after the exodus of
executives who cashed out large profits on stock options.

In 1999, Enron filed a statement with the SEC that disclosed the Fastow partnership
arrangements, although it was largely overlooked by analysts as they remained exuberantly
optimistic about Enron and its phenomenal growth and carnings prospects. Around this time,
Enron Treasurer Jeffrey McMahon complained to Enron President Jeffrey Skilling regarding
what he perceived to be Mr. Fastow’s conflict of interest. Mr. McMahon was reassigned as bead
of the industrial markets group.

In January 2000, Enron remained a favorite company of market analysts. [t was named
"The Most Innovative Company in America” for the fifth consecutive year and was ranked
number 24 among the "100 Best Companies to Work for in America” in Fortune surveys.
However, in June 2000, The Economist challenged Enron to refute allegations of arrogance,
aggressiveness, opacity, and borderline legality. Enron's reply was viewed by the publication
and markets as nonresponsive.

In September 2000, LJM2 invested $30 million in the “Raptor II” investment, which
involved L.JM2 writing put options that committed LJM2 to buy Enron stock at a set price for six
months. However, in January 2001, LJM2 requested that Enron settle the Raptor III transaction
early, LJM2 received back its $30 million in capital invested plus $10.5 million in profit. This
renegotiation occurred before the large decline in Enron’s stock price, which would have forced
LJM2 to purchase Enron stock at a loss of $8 per share.

2 01179

01200000000535


Kosmides, Ivy

From: Sampliner, Gary

Sent: Wednesday, November 28, 2001 9:15 AM

To: Christopulos, Greg; Demopulos, Abigail; Kosmides, Ivy, Crawford, Todd
Ce: Holloway, Barbara; Jarpe, Rachel; 'StrubleJW @state.gov’

Subject: RE; MIGA #63 Dominican Republic- Banco Santander

[OUTSIDE SCOPE , (b)(5)]

Original Message-----

+ Christopulos, Greg

Sent: Tuesday, November 27, 2001 11:11 AM

To: Demopulos, Abigail; Kosmides, Ivy; Crawford, Todd; Sampliner, Gary
Cc: Holloway, Barbara; Jarpe, Rachel; ‘StrubleJWestate.gov'

Subject: RE: MIGA #63 Dominican Republic- Banco Santander

[OUTSIDE SCOPE , (b)(5)]

~-Original Message-----
Prom: Demopulos, Abigail
Sent: Tuesday, November 27, 2001 10:17 AM
To: Kosmides, Ivy; Crawford, Todd
Ce: Holloway, Barbara; Christopulos, Greg; Jarpe, Rachel;
‘StrubleJWastate.gov’
Subject: RE: MIGA #63 Dominican Republic- Banco Santander

[OUTSIDE SCOPE , (b)(5)]

ooosel Original Message----~

Prom: Koamides, Ivy

Sent: Tuesday, November 27, 2001 10:13 AM

To: Crawford, Todd

Ce: Demopulos, Abigail; Holloway, Barbara; Christopulos, Greg; Jarpe,
Rachel; StrubleJWéstate.gov

Subject: RE: MIGA #63 Dominican Republic- Banco Santander

((b)(5)]

[OUTSIDE SCOPE , (b)(5)]

were Original Message-
From: tcrawford@worldbank.org (mailto: tcrawford#worldbank.org)
Sent: Tuesday, November 27, 2001 9:48 AM

To: Ivy. Kosmides@do.treas.gov

Cc: Abigail.Demopulos@do.treas.gov; Barbara.Holloway@do.treas.gov;
Greg.Christopulosado.treas.gov; Rachel.Jarpe@do.treas.gov;
StrubleJWestate.gov

Subject: RE: MIGA #63 Dominican Republic- Banco Santander

t

00500000001861


{(b)(5)]

$ 01374

01200000000730


Subject: RE: MIGA/R2001-0047, Dominican
Republic, guarantee to
investments in Edenorte and Edesur

I have forwarded your email to our investment office. [(b)(6)]

{()(5)]

{((b)(5)]

ated Original Message--~--

Prom: Greg.Christopulos@do.treas.gov
{eailto:Greg.Christopulosédo.treas.gov)

Sent: Wednesday, July 25, 2001 2:05 PM

To: Recinoshg@State.Gov; Katerina.Sloniewsky@do.treas.gov;
Gary .Samplinerado.treas.gov; Ivy.Kosmides@do.treas.gov;
TCrawford@WorldBank.org

Subject: RE: MIGA/R2001-0047, Dominican Republic, guarantee to
investments in Edenorte and Edesur

((b)(5))]

Helen -- please check with the State inv office. I sent Todd e-mail to
Landberg and Tracton. I think Chrie is on leave.

Thanks.

--+--Original Message-----

From: Kosmides, Ivy

Bent: Wednesday, July 25, 2001 1:36 DM

To; Christopulos, Greg

Ce: Tedd Crawford

Subject: FW: MIGA/R2001-0047, Dominicen Republic, guarantee te
investmenta in Bdenorte and Edesur

Greg... for you,

ooee Original Message----~

From: tcrawfordsworldbank.org [mailto:tcrawford@worldbank.org)
Sent: Wednesday, July 25 pathy 1:37 PM

To: ivy.kosmidesedo.tr
Subject: MIGA/R2001-0047, Deatalaas Republic, guarantee to investments
in Edenorte and Edesur

00500000001838


Enron's 2000 year-end financial statements cryptically described transactions with the
Fastow partnerships, including the transfer from Enron of assets valued at $1.2 billion, including
$150 million in notes payable to Enron, 3.7 million restricted Enron shares, and a call option to
buy as many as 18 million Enron common shares in March 2003. Enron also transferred to the
partnerships other assets valued at $309 million, including a $50 million note and “an investment
that indirectly held warrants convertible into common stock of an Enron equity method
investee.” In return, Enron received economic interests in the entities, $309 million in notes
receivable from the entities, and $1.2 billion in notes receivable as a “special distribution.” The
statements also mentioned a series of purchases by Enron of “share-settled options from the
entities” on shares of Enron's common stock,

In April 2001, LJM2 reported that Mr. Fastow, and possibly others, had realized more
than $7 million in management fees and $4 million in gains on an investment of nearly $3
million, Profits had been improved by the early termination or renegotiation of transactions.
The partnership had raised $394 million and invested in power plants and Enron assets and stock,
seeking a 29 percent IRR (reduced from its previous 48 percent target) after the decline in the
New Power Co, retailer, a provider of electricity and natural gas to households and small
businesses. Large cash distributions had been made to investors. In late July 2001, Mr. Fastow
severed his relationship with the LJM2 partnership. Enron dissolved the Fastow financing
vehicles, reacquired the Enron shares, and nullified the note receivable from the partnership after
the value of Enron’s stock and its broadband investments dropped sharply.

In July 2001, Enron officials were reported to have sold 1.8 million Enron shares valued
at about $106 million, as the stock declined from $83 to $45 per share. CEO Kenneth Lay sold
429.614 shares worth $25.7 million as a result of stock options, leaving him with 2.8 million
shares, In 2000 he had sold $30.7 million; in 1999 he sold $26 million. Kenneth Rice, former
chairman and CEO of the broadband unit, sold $23.7 million, reducing his 1.5 million shares by
456,966. President Skilling sold 160,000 of his 1.9 million shares for $9.8 million. Aggregate
sales by Enron executives totaled 5.8 million shares for $449 million. In 1999, they had sold 3.4
million shares for $123.1 million. The only corporate insider who purchased stock was Fastow,
who bought 10,000 shares at $36.98 each.

In August 2001, Enron President and CEO Skilling left after only six months in that
position, citing personal reasons and the decline in Enron's stock price. Kenneth Lay, chairman
and former CEO, again became Enron’s CEO, Thomson Financial reported that Mr, Fastow's
proceeds from stock options were $4.6 million for the previous 12 months.

fe Enron Turmoil

On October 16, 2001, Enron reported a third quarter loss of $618 million (compared with
year-ago earnings of $292 million), but did not release its balance sheet. The loss occurred
despite 2 59 percent increase in revenue to $47.61 billion, after accounting for a $1.01 billion
charge to write off impaired assets at its Azurix Corp. water services unit and several investment
losses. The charge consisted of $287 million in asset impairments recorded by Azurix, $180
million from restructuring broadband services, and $544 million related to certain investments.
About half of the $544 million charge was attributed to The New Power Co. unit; the other half

f 01180

01200000000536


Enron stock contributed to the structured finance vehicle, and notes receivable issued by
partnership-related entities to Enron, The offering document stated that Fastow would reccive an
annual management fee as much as 2 percent, and would be eligible for profit participation over
its ten-year life. The general partner was obligated to invest at least | percent of the aggregate
capital commitments, Private partnership documents apparently revealed the potential for huge
financial rewards for Fastow. Subsequent reports speculated that the arrangements may have
been created to retain Fastow after the exodus of executives who cashed out large profits on
stock options.

1999 Enron filed a statement with the SEC that disclosed the Fastow partnership arrangements,
although it was largely overlooked by analysts as they remained exuberantly optimistic
about Enron and its phenomenal growth and eamings prospects.

1999 JEDI stated that it had invested $2.1 billion in 63 transactions, indicating that it had
borrowed as much as $1.6 billion.

1999? Enron ‘Treasurer Jeffrey McMahon complained to Enron President Jeffrey Skilling
regarding Fastow’s conflict of interest. McMahon was reassigned as head of the industrial
markets group.

November 1999 Enron launched EnronOnline, the first global web-based commodity
trading site, Enron subsequently became the largest e-commerce company.

January 2000 Enron was named "The Most Innovative Company in America” for the fifth
consecutive year and was ranked number 24 among the "100 Best Companies to Work for in
America" in Fortune surveys.

March 2000 Enron made a brief reference to its new JEDI partner, presumably Chewco, in an
SEC filing.

June 2000 = The Economist challenged Enron to refute allegations of arrogance,
aggressiveness, opacity, and borderline legality. Its reply was viewed as nonresponsive.

September 2000 LJM2 invested $30 million in the “Raptor III” investment, which involved
LJM2 writing put options that committed LJM2 to buy Enron stock at a set price for six months.

12/21/00 Enron successfully lobbied Congress for exemption from regulation for its
Internet trading platform by the CPTC under the CFMA,

January 2001 LJM2 requested that Enron settle the Raptor III transaction carly. LJM2 received
its $30 million in capital invested plus $10.5 million in profit, This renegotiation occurred
before the large decline in Enron's stock price, which would have forced LJM2 to purchase
Enron stock at a loss of $8 per share.

2001 Kopper left Enron to help run the Fastow-related partnerships.

01186

01200000000542


From: Elizabeth K. Stewart
To: Doml3.DOPOS (eichenbergerj), CLAPPG
Subject: cogentrix -Forwarded -Reply

FYI, For over a year, AES, Coastal and Enron have off-and-on engaged us
and/or the EDs office at the World Bank on the woes of the DR energy sector
and on disputed payments and non-payment to IPPs. IFC is involved in the
Smith-Enron project. The World Bank's planned energy sector loan has been on
hold for 2-3 years, due to inadequate forward movement by DR.

>>> Gene Clapp 04/01/99 01:34pm >>>
[OUTSIDE SCOPE , (b)(5)]

cc: Dom13.DOPO6 (paulsons) ,

00500000001343


controversial off-balance sheet debt was unknown. Enron reportedly was unable to sell off
ceriain assets that it had hoped would raise cash. Its debt continued to trade at prices comparable
to non-investment grade debt, and it became more dependent on secured bank lending as other
sources of liquidity dried up.

On November 8, Enron restated its earnings and retroactively consolidated its past
financial performance with several previously off-balance sheet subsidiaries for 1997 through
2001, reducing net income by a total of $591 million. This reduced its 1997 camings by about
$96 million, 1998 earings by about $113 million, 1999 carnings by about $250 million and
2000 earnings by about $132 million. For 2001, it increased first-quarter earnings by $17 million
and second-quarter earings by $5 million, but reduced third-quarter earnings by $17 million. It
was estimated that the consolidation also would increase its debt by about $2.59 billion. Enron
also made public its responses to SEC questions involving the partnerships. Enron fired its
Treasurer, Ben Glisan, and the General Counsel and managing director of one of its divisions,
Kristina Mordaunt, who may have been involved in a partnership.

On November 9, Enron cancelled a meeting with its creditors to apprise them of its
merger and liquidity situation. A possible merger was delayed because of concerns that a
combined Dynegy-Enron entity would receive a lower or junk credit rating. Dynegy and Enron
provided pro forma financial statements to the rating agencies and requested an expedited review
of the transaction, Enron disclosed that the controversial transactions with Mr, Fastow had
earned him $30 million.

. .

Although the preceding chronology is subject to revision and embellishment as more
facts emerge, Enron definitely has suffered a decline in investor and analyst confidence, as well
as declines in its stock and debt prices and credit ratings, availability, and terms (see attached
yraphs). The SEC is investigating possible violations of U.S. securities laws. It reportedly is
reviewing whether the transaction terminations should have been treated as a balance sheet item
or a loss that affected reported earnings and whether the related-party transactions were properly
disclosed. The current speculation is that Enron intentionally used the off-balance sheet
transactions to shift losses off its books to avoid an effect on its income statement. The current
concern is that Enron might have to issue large amounts of stock to noteholders to repay about
$3.3 billion in notes ultimately guaranteed by Enron for certain of its related entities if certain
trigger events, such as credit downgrades, occur, and that the situation could have a destabilizing
effect on the energy and derivative markets that Enron dominates.

Attachments (graphs)

: 01184

01200000000540


Gross, Jared

From: Davis, Michele

Sent: Wesnesday, December 05, 2001 10:57 AM
To: Fisher, Peter, Holahan, Betsy

Cc: Gross, Jared

Subject; RE: WSJ Interview Request

that sounds good to me

cores Original Message-----~-

From; Fisher, Peter

Sent: Wednesday, December 05, 2001 10:34 AM
To: Davis, Michele; Holahan, Betsy

Cc: Gross, Jared

Subject: RE: WSJ Interview Request

did i send or delete a message already?

{((b)(5)]

leita Original Message----~-

Prom: Davis, Michele

Sent: Wednesday, December 05, 2001 9:45 AM
To: Holahan, Betsy; Fisher, Peter

Cc; Gross, Jared

Subject: RE: WSJ Interview Request

Does Peter think there's something useful to say on this topic? What would be the
reaction to whatever he would say?

-----Original Me
Prom: Holahan, Betey

Sent: Wednesday, December 05, 2001 9:26 AM
To: Davis, Michele; Pisher, Peter

Cc: Gross, Jared

Subject: WSJ Interview Request

I asked Greg Ip for more information regarding an interview request he put in for Peter
earlier this week...please advise if this is something worth doing. Thanks.

-+-Original Message---~-~
From: Ip, Gregory (mailto:Gregory.Ipewsj.com)
Sent: Tuesday, December 04, 2001 3:50 PM
To: "Betsy.Holahan@do.treas.gov'
Subject: RE: Interview Request

Betsy -

We're asking the question (in the light of Enron), how much has changed with
respect to the disclosure and regulation of derivatives and other sources of

01200000001564


{(b)(5)]

° 01372

01200000000728


October 13, 1998

MEMORANDUM FOR DEPUTY ASSISTANT SECRETARY SCHUERCH
FROM: Joseph B. Eichenberger
Director
Office of Multilateral Development Banks
SUBJECT: Argentina: IDB financing for Transportadora de Gas del Sur S.A.
ACTION FORCING EVENT:
On Wednesday, October 14, 1998, the IDB Board will consider a proposal for a $75 million A"
loan and a $300 million “B" loan to Transportadora de Gas del Sur S.A. (TGS), an Argentine gas
pipeline company.
RECOMMENDATION:
{(b)(5)]

BACKGROUND:
{(b)(5)}

DISCUSSION:
{(b)(5)]

00500000001956


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00500000001904


2:30 works for me. | have a 3:30 meeting at the State dept on the DR (meeting wi
Post econ officer and Enron (largest power producer) to discuss arrears, etc,

——Onginal Message--—

From: Backes, Steven

Sent: Monday, September 24, 2001 1:26 PM
To: Koamides, Ivy

‘Could we meet tomorrow afternoon? | would like you to explain briefly Jamaia’s
economic situation and review what it is you hope to investigate while you are
there. Maybe around 2;307

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long-term debt by one notch to Baa2 from Baal, still two levels above junk bond status, citing
the write-downs, equity charges, and partnership investments. It stated that it might downgrade
Enron's commercial paper P-2 rating as well, making it more difficult/expensive for Enron to
borrow short-term cash. Royal Dutch/Shell reportedly was interested in purchasing Enron, and
had approached it earlier in August. The SEC transferred its inquiry to its Washington D.C.
headquarters,

On October 30, there were rumors that GE Capital, Berkshire Hathaway or Royal Dutch
Petroleum might buy Enron. Its stock increased 25 percent, rebounding from a nine-year low.

On October 31, the SEC began formally investigating the Fastow partnerships. Large
cnergy traders were reported as willing to do business with Enron, but at shorter maturities and
using less complex structures. Trading on EnronOnline was reportedly strong. However, few
firms would accept Enron as a guarantor of credit derivatives, some counterparties in its core
energy markets refused to transact, and two members of the Intercontinental Exchange, owner of
the International Petroleum Exchange that trades energy derivatives, refused Enron’s credit.

On November 1, Enron received a $1 billion loan from J.P. Morgan Chase and Salomon
Smith Barney, using natural gas pipelines (Northern Natural Gas and Transwestern Pipeline) as
collateral, Proceeds from this secured loan were to be used for debt payments and to supplement
cash reserves, and it could borrow an additional $200 million from other banks. This was
perceived as a desperate attempt to preserve its creditworthiness. It reportedly was unable to
issue commercial paper (at least at lower rates), and two energy companies (Exelon and
Northeast Utilities) restricted business with Enron. Its stock declined 16 percent, and its notes
had declined substantially as well.

On November 5, Fitch downgraded Enron's senior unsecured debt rating from BBB+ to
BBB-, one notch above junk status, citing its liquidity difficulties, erosion of investor
confidence, and substantial diminution of its global investments financed with aggressive off-
balance shect vehicles. Fitch also lowered Enron’s subordinated debt from BBB to BB, its
preferred stock from BBB- to B, and its commercial paper from F3 to F2. It also lowered the
senior unsecured debt ratings of Enron's pipeline subsidiaries, Northern Natural Gas and
‘Transwestern Pipeline, from A- to BBB-, whose assets were pledged the previous week to help
Enron secure an additional $1 billion bank facility. All of the Fitch ratings remained at “Rating
Watch Negative” status,

On November 6, Fitch wamed that it might downgrade Enron’s credit rating to junk
status. Also, former Enron president Skilling reportedly testified before the SEC in Washington,
D.C, pursuant to a subpoena.

On November 7, Enron stock sank to a new low of $7 per share before rebounding on
reports that it was having discussions with Dynegy Inc. regarding at least a $1.5 to 2 billion cash
infusion, and possibly a full merger. A merger would involve the sale of Enron to Dynegy for
about $8 billion in a stock swap (about $10 per share), with a cash infusion of $1.5 billion
initially and $1 billion later provided by ChevronTexaco, which owns 27 percent of Dynegy.
Dynegy would assume Enron's $12.8 billion on-balance sheet debt: the disposition of its

01183

01200000000539


Helen -- please check with the State inv office. I sent Todd e-mail to
Landberg and Tracton. [(b)(6)]

Thanks.

ete Original Message-----

From: Kosmides, Ivy

Sent: Wednesday, July 25, 2001 1:36 PM

To: Christopulos, Greg

Cec: Tedd Crawford

Subject: PW: MIGA/R2001-0047, Dominican Republic, guarantee to
investments in Edenorte and Edesur

Greg... for you.

acene Original Message-- ~~~

Prom: terawford@worldbank.org [mailto:tcrawford@worldbank.org)

Sent: Wednesday, July 25, 2001 1:37 PM

To: ivy.kosmidesedo.treas.gov

Subject: MIGA/R2001-0047, Dominican Republic, guarantee to investments
in Edenorte and Edesur

Ivy - Would you forward this to Greg, please. For some reason, my machine
won't

communicate w/ him today. Don't understand why, as I believe I have his
correct

e-mail address. Thanks. T

Forwarded by Todd W. Crawford/Person/World Bank EDs on 07/25/2001

Todd Ww.

Crawford Tor
Greg. Christopulos@Do.Treas.Gov,
Katerina.Sloniewsky#Do.Treas.Gov,
Stephen.AltheimeDo. Treas .Gov,

07/25/2001 Dirk.Joldersma#Do. Treas .Gov,
RecinoshgeState.Gov

12 PM ces
Barbara.Hol loway@Do. T) Gov, Barbara Geiser

80112 Epsol Subject: MIGA/R2001-0047,

Dominican Republic, guarantee to
investments in Edenorte and Edesur

{(b)(5)}

00500000001842


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00500000001903


FPR O39 "99 111168M COGENTRIX CHARLOTTE P.ie

$405 AToapoint Blvd
Chartome, NC 28273-8110 Cogentrix Energy,
Fax 704-525-0004 Inc.

fsss To GH. >
Geue Clap P aS 2

Elizabeth StewayT

cae -Bloayorcley
Te: Ms. Gay Siis Suva Dowd
Ro: Pages: 2 including cover sheet

co Roger Noriega-Senstor Helms Office Date: 04/09/99

OC Urgent OForReview OPieaseComment [Please Roply C Please Recycle

® Comments:

Tnformasion contaiied In tis facsimile transmission & sively contdential. if you did not recerve all |
Of the pages or received this fax in error, please call (704) 525-3800 ext 639,

Thank you for you cooperation.

00500000001340


{(b)(5)]

7 00758

01200000000103


Powered by List Builder

To unsubscribe follow the link:

http://1b, bcentral.com/ex/manage/subscriberprefs?customerid=7262
&subid=BC64FBC83047406BamsgnumesOl

00500000001860


((b)(5)}

00756

01200000000101


Draft Board Statement
Proposed IDB loan to Transportadora de Gas del Sur S.A.

October 14, 1998

{()(5))

00500000001959


Kosmides, Ivy

From: Kosmides, Ivy

Sent: Tuesday, September 25, 2001 6:39 PM
To: Bryan Gobin (E-mail)

Ce: Gunaratne, Nimini

Subject: IPPs

Importance: High

Brian,

Here is some additional information on the IPP arrears. Mf you have urgent additional questions, | am sure Bob Conley, the
Ceputy director in our MDB office, would be happy to answer them as | will be out unt Oct. 2
({robert.conley@o.treas.gov).

Today, Treasury met with ENRON, one of the large IPPs. | also discussed the arrears issue with Kris Urs, the econ officer
at post for State.

ENRON’s Issue

They would like Treasury assistance to urge IFC to defend project in the OR
* Corporacion Domicana Electricidad (100% SOE) CDE is running arrears to IPPs including $25 mn to ENRON
* Bond issue backed by USG guarantee will be called in December if action not taken
* GODR is unwilling to honor contract and come to a solution with IPPs

Background

{(o)(5)]

00500000001853


Clapp, Gene

From: Rao, Geetha
Sent: Tuesday, January 23, 2001 9:37 AM
To: Grewe,

Cec: Radelet, Steve

Subject: RE: India/Dabhol Meeting

((b)(5)]

Cable #029799 Dec 08
Cable #032693 Dec 13
Cable #034319 Dec 15
Cable #044561 Jan 09

—~-Original Message

From: Grewe, Maureen

Sent: ‘Tuesday, January 23, 2001 8:55 AM

To: Rao, Geetha; Milis, Marshall; Sameliner, Gary; Christopuios, Greg; Capp, Gene
Cer Radeiet, Steve

Subject: RE: India/Dabhol Meeting
Please note the following article from this morning's press summary:
US Envoy: India's Enron Project Key To Foreign investment

2

Mis, Marshall; Sampliner, Gary; Christopulos, Greg; Clapp, Gene

00500000001871


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To: PeacockCESstate.gov
Subject: RE: Appointment

Thanks, Charlie.

You might ask him to come with information on reserves, and arrears to
Independent power producers if possible. I imagine he will have more up to
date info than I do.

oces- Original Message
From: Peacock, Charles E [mailto:PeacockCréstate.gov)
Sent: Wednesday, September 19, 2001 5:18 PM

To: ‘ivy-.kosmides@do.treas.gov'

Subject: Appointment

Ivy.

This is to confirm the meeting with Kris Urs from the Surry) 7} Santo
Domingo for t Tuesday, the 25th at 10:00. Kris’ DOB is and his
SSN is [ei » I might come with him so my detaile aut Sy) [(b)(6)]
ssn {(b)( ) Thanks. Charlie

00500000001856


DRAFT

November 27, 2001
TO: Norman Carleton
Office Director
Office of Federal Finance Policy Analysis
FROM: Heidilynne Schultheiss
Financial Analyst
Office of Federal Finance Policy Analysis

SUBJECT: Chronology of Enron Events and Recent Financial Turmoil

{(b)(5)]

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00500000001892


million shares for $123.1 million, The only corporate purchaser was Fastow, who bought 10,000
shares at $36.98 each,

August 2001 Enron President and CEO Skilling left after only six months in that position,
citing personal reasons and the decline in Enron's stock price. Kenneth Lay, chairman and
former CEO, again became Enron's CEO.

8/31/01 Thomson Financial reported that Fastow's proceeds from stock options were $4.6
million for the previous 12 months.

10/16/01 Enron reported a Q3 loss of $618 million (compared with year-ago carnings of
$292 million), but did not release its Q3 balance sheet. The loss occurred despite a 59 percent
increase in revenue to $47.61 billion, after accounting for a $1.01 billion charge to write off
impaired assets at its Azurix Corp. water services unit and several investment losses, The charge
consisted of $287 million in asset impairments recorded by Azurix, $180 million from
restructuring broadband services, and $544 million related to certain investments. About half of
the $544 million charge was attributed to The New Power Co. unit, a provider of electricity and
natural gas to households and small businesses; the other half to bankrupt Northpoint
Communications and other technology investments, and the early termination of a structured
finance arrangement. Excluding the charge, Enron would have met market expectations.
Investors questioned Enron's ability to expand from its successful core wholesale energy
business and its level of transparency. Moody's reviewed Enron for downgrade. [1s debt-to-
capital ratio increased to 50 from 46 percent, and it hoped to sell some assets to reduce it. Enron
did not disclose its large reduction in equity in its earnings release, but instead waited.

10/17/01 Conflict-of-interest questions were raised regarding limited partnerships run by
CFO Fastow, The charge related to the carly termination of certain structured finance
arrangements was quantified as $35 million. Enron held a conference call with securities
analysts and investors in which it disclosed that its shareholder equity contracted by $1,2 billion
to $9.5 billion as a result of Enron's repurchase of 55 million shares from Fastow (Enron had an
average 913 million shares outstanding in Q3) at a lower price and the cancellation of the
partnership note. Enron characterized the reduction as a “result of Enron's termination of
previously recorded contractual obligations to deliver Enron shares in future periods.” An
analyst explained that Enron had promised that a certain amount of Enron's shares would be
worth $1 billion, and when they plummeted and fell below that value, Enron bought them back.
One analyst conjectured that Enron had treated the shares as a buyback, but had never issued
them. The SEC sent a letter to Enron beginning an “informal inquiry.”

10/22/01 Enron confirmed that it had received a request for information from the Texas
regional office of the SEC regarding its controversial partnerships with Fastow. Analysts
speculated that its Enforcement division was investigating possible violations of securities laws.
The SEC reportedly was reviewing whether the transaction terminations should have been
treated as a balance sheet item or a loss that affected reported carnings (accounting rules specify
that a company's transaction in its own shares cannot produce profits or losses, whatever the
effect on cash flow); and whether the related-party transactions were properly disclosed under
Rule S-K, where a company must report transactions that exceed $60,000 with “any director or

01188

01200000000544


{(b)(5)}

00500000001958


executive officer” (although FAS Statement 57 issued a broader definition involving a “material”
picce of business between the company and a member of its management). There was
speculation that Enron had used the off-balance sheet transactions to shift losses off its books to
avoid an effect on its income statement. Enron's stock price fell 20 percent and it was the most
actively traded NYSE stock with 36 million shares traded. Concems about Enron’s credit rating
emerged, Enron stated that it had properly disclosed transactions, was cooperating with the SEC.
and was confident it would not default. A class-action suit was filed in U.S. District Court in
Houston alleging misrepresentation and failure to disclose and write down investments, It
alleged that Enron insiders sold $73 million of their holdings during parts of 2000 and 2001.

10/23/01 Worries arose that Enron might have to issue large amounts of stock in the next
20 months to noteholders to repay about $3.3 billion in notes ultimately guaranteed by Enron for
certain entities like the Marlin Water, Atlantic Water, and Osprey ventures if certain trigger
events occurred (such as credit downgrades). Marlin owes almost $1 billion in debt and has no
assets other than a one-third stake in Azurix, a subsidiary that owns British water utility Wessex.
Enron Treasurer Ben Glisan stated that assets could be sold to pay off the noteholders, raising at
least $2.2 billion, including $1.55 billion in proceeds from the sale of the Portland Gencral
Electric utility, In a worst-case scenario, it could issue as much as $1 billion in stock (there are
currently 850 million shares outstanding), although Enron's share price had declined 75 percent
from its high. An analyst estimated that Enron could have close to $9 billion in off-balance sheet
debt, and had been trying unsuccessfully to sell $6 billion in illiquid foreign assets for years.

10/24/0) Enron reported it had $3.35 billion in bank lines of credit, of which $1.75 billion
would expire in May 2002 if not renewed. However, analysts still seemed to be mesmerized by
Enron. Goldman Sachs downgraded Enron from its “U.S. Select List” of a few dozen stocks to
its “Recommended List” of 200 stocks. Only Prudential downgraded Enron to a “sell” rating,
Of 17 analysts, 10 still maintained a “strong buy” rating. Critics charged that analysts had
compromised their objectivity, especially since Enron has retained many Wall Street firms for its
offerings and paid a substantial amount of investment banking fees.

10/25/01 Fastow took a “leave of absence” from Enron, and McMahon was named CFO.
Concerns arose regarding a destabilizing effect on the energy trading market, since Enron trades
approximately 25 percent of U.S. OTC electricity and natural gas contracts, particularly through
its popular EnronOnline Internet trading platform. The notional value of its derivatives portfolio
was estimated at $21 billion, and there were fears that utilities and commercial and investments
banks could be affected as well. J.P. Morgan Chase was mentioned, as it advises Enron on asset
sales, provides credit to Enron, has the largest derivative operation of any bank, is a counterparty
to Enron in some transactions, and has a large commodity trading business. Enron's
creditworthiness was questioned. Enron’s stock price declined again and it was the most actively
trade NYSE stock at nearly 76 million shares, included some large blocks of 800,000 shares or
more reportedly sold by institutional investors. Share prices for other energy trading companies
declined as well. Additional analysts issued sell recommendations for Enron.

10/26/01 Enron drew down $3 billion of its $3,35 billion bank credit lines to redeem $1.85
billion of outstanding commercial paper that it had problems rolling over, and to provide it with
acash cushion, Citigroup and J.P, Morgan Chase reportedly each extended at least $400 million,

01189

01200000000545


Clapp, Gene

heey ote January 22, 2001 3:14 PM.
To: Ce silos, Greg: Grewe, Maureen; Mills, Marshall: Sampliner, Gary: Clapp, Gene
Subject: RE: India/Dabhol Meeting

We will go ahead and have the meeting on Wednesday January 24 at 3 pm. This time works
for Greg as well. Thanks, geetha

secee ‘Original Message-----

From: Christopulos, Greg

Sent: Monday, January 22, 2001 3:04 PM

To: Rao, Geetha; Grewe, Maureen; Mills, Marshall; Sampliner, Gary;
Clapp, Gene

Ce: Radelet, Steve

Subject: RE: India/Dabhol Meeting

Is there a chance this meeting can be moved up an hour or so?

islets Original Message-----

Prom: Rao, Geetha

Sent: Monday, January 22, 2001 3:02 PM

To: Grewe, Maureen; Mills, Marshall; Sampliner, Gary; Christopulos,
Greg; Clapp, Gene

Ce: Radelet, Steve

Subject: FW: India/Dabhol Meeting

Attached is background material for the Enron meeting on Wednesday. Pls. note Mr. John
Hardy will also be attending,

~+---Original Message
From: Tom.Briggs@enron.com [mailto:Tom.Briggs@enron.com)
Sent: Monday, January 22, 2001 1:54 PM

To: geetha.raosdo.treas.gov

Subject: India/Dabhol Meeting

My apologies for the delay in sending this material. J have lost both my
ar tant and my temp so I am a bit overwhelmed.

on ‘dy will be attending the meeting tomorrow at 3. His SS# is
re:

and birthdate is DIS) eg you could remind me of the

of the meeting I woul ve it. I managed to lose that as

well.

John and I have a brief agenda: 1) we want to update you on Dabhol and 2)
we want to discuss way in which the USG may become involved in encouraging
market reform necessary to extract value out of our generating asset.
Specifically, we want to focus on refgorm at the Indian federal level that
will be necessary to deliver power to customers other than MSEB.

We look forward to meeting you tomorrow.
(See attached file: Dabhol PPA - DC Talking Points.doc;

00500000001865


Stewart, Elizabeth K.

From: Rao, Geetha

Sent: Monday, February 05, 2001 1:06 PM

To: Samopliner, , Grewe, Maureen; Mills, Marshall; Christopulos, Greg; Clapp, Gene; Stewart,
Elizabeth K.; . James iid

Ce: Radelet, Steve

Subject: RE: India/Dabhol Meeting

John Hardy from Enron left a message this momit to inform us that Enron ts planning on calling the GO! guarantee for

the MSEB’s missed payments tomorrow. {(b)(5)]

00500000001518


opdood 043 07 s0m0g
YIMCAIOHSVA

0 JeqUIaAON - Ayji9e4 SeBOY ONT

joyge

q 40 SMAIA [elev

00500000001894


Prom: Elizabeth K. Stewart
To: Dom13.DOPO8 (CLAPPG), SILLSG
Subject: may i get a readout of your meeting with the world bank on the

dr and the -Reply

[OUTSIDE SCOPE , (b)(5)}

>>> Gay Sills 03/29/99 12:57pm >>>
power sector before our 4pm tomorrow. via lan is fine. do you have a view
on what line do we want to take with these people?

ce: christopulos

00500000001350


Clapp, Gene

sor Thera sens 23, 2001 8:55 AM

To: Rao, Geetha, Mils. Marshall Sa Ch :
pre! ceene 8 impliner, Gary; Christopulos, Greg: Clapp, Gene
Subject: RE: India/Dabhol Meeting

Please note the following article from this morning's press summary:
US Envoy: India's Enron Project Key To Foreign Investment

BOMBAY (AP)--U.S. Ambassador to Incia Richard Celeste wamed Monday that
foreign investment in India would falter because of pressures that
threatened to derail the $3 bilion Enron Corp. (EN. D power project

“It regrettably feeds the concern among American and other foreign investors
that India remains a jess-than-reliable destination for their investment

collars,” Celeste toki an audience of business leaders, politicians and
hongovernment agencies in Bombay, India's financial hub.

India’s largest-ever investment has been in trouble since December
empl sephora ete, eect pombe i eeueted, said it
would review a power-purchase agreemen! energy 9 in Corp.
een era ena ph arith
in Peer te Eatich Enos indian

aneaey net will sell electricity to the state.

The first ‘@ power plant of 740 megawatts, already has been

wanda the second phase of 1-44 iregawrane ls ccorehed ke

completion by end 2001

Depreciation of the Indian rupee and cost of naphtha used to generate

high
the 7
wat ae aan senate he Lad pelle med phe rupees a

Enron has said it saw no current need to renegotiate the tariff and maintained that a transition from naphtha to liquefied
natural g&s would reduce the tariff.

ot eaner 8, steep nelrhierbendcety ae Hed
reign investors wil be afc by the

He sat) despte permerahips in softwere and information , US,

investors were of india because of political pressures at the and
jen business bes wih Ind

Stressing Boones & srecee en buspase des India, Celeste focused on

the Enron project and asked that “The Dabhol power plant remain a symbol of

American investment in India and not a symbol of the impediments that
‘Stil hinder even greater foreign direct investment.”

Gopyriaht Mg 2001 Ont Bow Jones ane Company. See:

——

eet Marshal. Samplner, Gary; Christopulos,

Co
Pa et ‘ndia/Dabhol Meeting

Attached is background matenal for the Enron meeting on Wednesday. Pis. note Mr. John Hardy will also be attending.

From: | pooner [mailto:Tom. Briggs @enron.com)
1

00500000001874


Kosmides, Ivy

From: Kosmides, Ivy

Sent: Tuesday, September 25, 2001 12:08 PM

To: Schuerch, William; Paulson, Sera; Demopulos, Abigail
Ce: Backes, Steven

Subject: Enron mtg today at 1:30 pm

Importance: High

| just spoke to Mr. Hardy of ENRON regarding the meeting agenda for today.

issue
Hardy would like Treasury assistance to urge IFC to defend project in the DR
* Corporacion Domicana Electricidad (100% SOE) CDE is running arrears to IPPs including ENRON (total DR
arrears close to $140 mn)
* Bond issue backed by USG guarentee will be called in December if action not taken
Background

[(b)(5))

00500000001850


((b)(5)]

((b)(6)]

questions/inetructions.

Many thanks.
Todd

80 please be sure you copy her with

00500000001843


FPR @9 °99 11516AM COGENTRIX CHARLOTTE reve

' SZ Cogentrix

Sogeah Eee ne

f Arrenpoin’ Boulewssd
Charkoete, WC 28275-4110
704525-3600
Foe POSS238405

April 8, 1999

Ms. Gay Sills

Director

Office of Intemational Investment
Department of Treasury

1500 Pennsylvania Ave. NW
Washington, DC 20220

Dear Mr. Drucker:

I wanted to take the opportunity to thank you for agreeing to meet with us last week to discuss ov. +
in the Dominican Republic. We continus to make progress in finalizing our remaining contracts, s1.- .
forward to a financial closing in August or September.

‘As Imentioned during our discussions, we feel that the Fernandez Administration is continuing to mal‘e
great strides in reforms, which will provide a safe, equitable climate for foreign investment The
competitive solicitation under which our project Was initsted, along with the structure of our power
purchase agreement and State Guarantee are evidence of these changes. With our financing structure
dependent an support from both the IADB and OPIC, we need the continued support of the U.S.
Government with regard to our investment in the Dominican Republic. We hope we can continue to

. count on that support.

L will continue to keep you updated periodically as to our project. In the meantime, please feo! &«
me anytime if you have any questions.

Sincerely,

trl

Steven J. Doyon, P.E.
Vice President
Business Development

ce: Roger Noriega - Senator Helms OfSce

00500000001341


From: Matthew_Gardner@{(b)(6)}

Sent: Thursday, January 17, 1:47 AM
To: Pat.Cave@do.treas.gov

Subject: Re: New Information [Virus Checked}
Internet HTML (1

Congrats. See what you can do about this Enron thing, will you!

Matt

Pat.Cave@do.treas.gov on 01/17/2002 11:43:39 AM

To: w26-all@wharton.upenn.edu
ee: (bee: Matthew Gardner/PA/ARS/US/AON)
Subject: New Information [Virus Checked}

Dear Class:

I have started a new job. Please change your contact information.

Pat

J. Patrick Cave

Deputy Assistant Secretary

Financial Institutions and GSE Policy
Department of Treasury

Room 2420 Main Treasury Suilding
202-622-0430; 202-622-2027 fax

pat .cavetdo,treas.gov

01200000001652


{(b)(5)]

2 00755

01200000000100


Kosmide:

From: OR1 [news@dr1.com]

Sent: Monday, November 26, 2001 12:42 PM

To: Kosmides, Ivy

‘Subject: DR1 Daily News - Monday, 26 November 2001

DOMINICAN REPUBLIC ONE
http: //wew.dr1.com
The best internet resource for information on the Dominican Republic

Henn ne eneeeee eerrerrer rete)

DR1 Daily News -- Monday, 26 November 2001

teen eeeeeeeee Prreereririr iit d

NYC mayor-to-be expected today

International Socialists’ annual meeting

XII Iberoamerican Summit 2002 in Bavaro

Monetary and Finance Code draft published

Power companies pictured as modern day pirates

. Edesur/Edenorte department heads arrested
Businessmen lash out against power companies

" Latin America a Dominican

Licey has a good weekend

WOT He UN Ee

PPrereeeettrtiririri ti itir iri iris
There are many different ways to see the Dominican Republic.
Then there's the BEST WAY, renting a car and driving around.
Click on the link for some great special offers!

http: //dr1.com/catrack/out .php?http://dr1.com/specials- html

1. NYC mayor-to-be expected today

Mayor-elect of New York, media tycoon Michael Bloomberg, is expected
teday in Santo Domingo. He will be the guest of the Dominican
government and will meet with President Hipolito Mejia and relatives
of victims of American Airlines flight AAS67 at the National Palace
at 1:30 pm. He will also receive the keys to the city of Santo
Domingo at a 3 pm event at the Palacio Consistorial in the Colonial
City. Travelling with Bloomberg are New York assemblyman Adriano
Espaillat, New York congressman Charles Rangel and counsellors
Miguel Martinez and Guillermo Linares.

2. International Socialists’ annual meeting

The Annual Council of the International Socialist Organization meets
in Santo Domingo this week at the Santo Domingo Country Club.
President Hipolito Mejia and the Prime Minister of Portugal, Antonio
Guterres (who io also world president of the 180) will be present
for the opening. The ruling party, the PRD, is a member of the ISO.
The working sessions will take place today and tomorrow. One hundred
forty one delegates from five continents will focus on terrorism,
the struggle against poverty, strengthening democracy and social
justice.

3. XII Iberoamerican Summit 2002 in Bavaro

The Dominican Republic will host the XII Ibercamerican Summit in
November 2002 in Bavaro. Minister of Foreign Relations Hugo
Tolentino Dipp said the summit will be austere but elegant. The
Bavaro Convention Center will be the center of the meetings and
statesmen will be lodged in Punta Cana-Bavaro area hotels. The
hosting of the convention in Bavaro will also spare Santo Domingo
from traffic bottlenecks that have accompanied past summits.

The only major investment to be made is at the Punta Cana
International Airport where additional parking space needs to be

1

00500000001857


Ivy - Would you forward this to Greg, please. Por some reason, my machine
won't

communicate w/ him today. Don't understand why, as I believe I have his
correct

e-mail address. Thanks, T
ereee Forwarded by Todd W. Crawford/Person/World Bank EDs on 07/25/2001
01:36 PM

Todd W.

Crawford To:

Greg.Christopulos®Do. Treas .Gov,
Katerina.Sloniewsky@Do.Treas .Gov,
Stephen.AltheimeDo.Treas.Gov,

07/25/2001 Dirk. JoldersmaSDo.Treas.Gov,
Recinoshg@State.Gov

12:00 PM ce:
Barbara.Holloway@Do.Treas.Gov, Barbara Geiser

8011 Epso1 Subject: MIGA/R2001-0047,

Dominican Republic, guarantee to
investments in Edenorte and Bdesur

{(b)(5)]

{(b)(6)} so please be sure you copy her with
questions/instructions-

Many thanks.
Todd

00500000001839


[OUTSIDE SCOPE , (b)(5)]

((b)(5)]

Ivy. Kosmides@do
,treas.gov To: Abigail .Demopulos@Do. Treas .Gov,
Strublejwestate.Gov,
Terawford@Worldbank.Org,
Greg. ChristopulosSDo. Treas .Gov,

11/27/2001 Rachel .Jarpe@Do. Treas .Gov
09:36 AN cc: Barbara .Holloway@Do.Treas.Gov
Subject: RE: MIGA #63 Dominican Republic~

Banco Santander

I'm including Rachel Jarpe, our Research Assistant, on this chain as she
will be working on the Caribbean with me.

Thanks.
> seeee Original Message-----
From: Demopulos, Abigail
Sent: Tuesday, November 27, 2001 9:35 AM
To: Kosmides, Ivy; ‘John W Struble (E-mail) * (E-mail); Crawford, Todd;
Christopulos, Greg
Ce; Holloway, Barbara
Subject: MIGA #63 Dominican Republic- Banco Santander

[OUTSIDE SCOPE , (b)(5)]

Thank you,

Abby Demopuloa
622-8811

>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
»
>
>
>
>
>
>
>
>
>
>
>
>

00500000001862


Enron Talking Points

{(b)(5)]

01200000001342


{(b)(S)]

; 01371

01200000000727


Kosmides, Ivy

From: tcrawford@worldbank.org

Sent: Wednesday, July 25, 2001 5:27 PM

To; Gary.Sampliner@do.treas gov

Ce: Greg Christopulos@vo .treas gov; Ivy.Kosmides @do.treas.gov,
Katerina. Sloniewsky@do.treas.gov; RecinosHG@state.gov

Subject: RE: MIGA/R2001-0047, Dominican Republic, guarantee to investments in Edenorte and
Edesur

[(b)(5)]

Gary. Samplinerédo
.treas.gov To: Terawford@wWorldbank.Org,
Recinoshg@State.Gov

eer Greg.Christopulos@Do.Treas.Gov,
Ivy .Kosmides@Do.Treas.Gov,

07/25/2001 04:51 Katerina, Sloniewsky@Do. Treas Gov

eM Subject: RE: MIGA/R2001-0047, Dominican
Republic, guarantee to

investments in Edenorte and Edesur

((b)(5)]

-Original Me ge -
From: torewtordence abenks org [mailto:tcrawford@worldbank.org)

Sent: Wednesday, July 25, 2001 4:48 PM

To; Recinos, Helen G

Cc: ‘Gary.Samplinerédo.treas.gov'; 'Greg.Christopulos@do.treas.gov';
‘Ivy. Kosmides@do.treas.gov'; ‘Katerina.Sloniewsky@do.treas.gov'
Subject: RE; MIGA/R2001-0047, Dominican Republic, guarantee to
investments in Edenorte and Edesur

{((b)(5)]

00500000001840


Bitsberger, Timothy

From: Wiedman, Mark

Sent: Friday, December 21, 2001 11:35 AM
To: Bitsberger, Timothy

Subject: RE: Enron Talking Points

Peter sat me down yesterday and toki me exactly how he likes to do speeches, 10 re-work it with Norman to get 4 into
that form and then forward it to you.

ow Original Message=—

From: Bitsberger, Teno

Sent: Friday, December 21, 2001 11:31 AM
To: ‘Wiedman, Mark

Subject: RE: Enron Taliong Points
can you please review and make comments to me first

== Onginal Message-—

From: Carleton, Norman

Sent: Friday, December 21, 2001 9:47 AM
To: Batsberger, Timothy; Wiedman, Mark
Ce: Schuitheiss, Hedilyrine; Nickoloft, Peter
‘Subject: Enron Talking Points

<< File: Enron talking points.doc >>

Attached are draft Enron talking points for Peter Fisher.

01200000001341


LS
DEPARTMENT OF THE TREASURY
WASHINGTON, D.C

SECRETANY OF THE TACASURY

{(b)(5)]

01200000001431


DEPARTMENT OF THE TREASURY
Washeergton

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00800000000811


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01200000000102


date info than I do.

occas Original Measage-----

: Peacock, Charles & (mailto: PeacockCkastate.gov)
Wednesday, September 19, 2002 5:18 PM

To: ‘ivy, kosmides@do.treas.gov'

Subject: Appointment

Ivy,

Beery is to confirm the meeting with Kris Ura from the emba: is ig) Santo
ngo for next Tuesday, the 25th at 10:00. Kris! DOB isl )(6)] BIAS

pia is | b)\(6 )) I might come with him so my details are: DOB: (

ss¥ [(b) th) Thanks. Charlie

00500000001845


{(b)(5)}

01200000001343


Kosmides, Ivy

From: Kosmides, Ivy
Sent: Tuesday, October 02, 2001 5:20 PM
To: “Peacock, Charles E'; Kosmides, tvy
Ce: Conley, Robert
Subject: RE: Appointment
Importance: High
Do you have email for him?
‘Thanks .
ecoee Original Message--~ ~~
k, Charles E [mailto:PeacockCEastate.gov]

» September 26, 2002 8:33 AM
To: 'Ivy.Kosmides@do.treas.gov’

Cc: "Robert .Conley@do,treas.gov’

Subject: RE: Appointment

USAID has a large program in the DR which I will not even begin to try to
describe, Its budget is some $23 million/year. You should contact Richard
Steelman at USAID if you need details. His number is 712-0518. Charlie

weees Original Messaqge-----

From: Ivy.Koemides@do.treas.gov [mailto:Ivy.Kosmides@do, treas.gov}
Sent: Tuesday, September 25, 2001 6:23 PM

To: PeacockCEestate.gov

Ce; Robert .Conleyado.treas.gov

Subject: RE: Appointment

We just met with Enron. Pretty bleak. Could you find out what US AID has
going on in the DR? Please copy Bob Conley in your reply.

Thanks,
Ivy

+--+ Original Messaqge-----

From: Peacock, Charles E [mailto:PeacockCEgstate.gov)
Sent: Tuesday, September 25, 2001 9:29 AM

To: ‘Ivy. Kosmides@do.treas.gov'

Subject: RE: Appointment

Ivy.

John Hardy, VP for Global Finance, can be reached at [(b)(6)] He's the
guy who is coming here today. Are you still attending that meeting?
Charlie

sccee Original Message-----

Prom: Ivy.Kosmides@do.treas.gov {mailto:Ivy.Xoumides@do.treas.gov)
Sent: Monday, September 24, 2001 5:32 PM

To: PeacockCE@state .gov

Subject: RE: Appointment

Charlie,

Do you have contact information for the Enron group? They have also
scheduled a meeting here with DAS Schuerch and his office needs it.
Thanks,

ivy

00500000001854


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00500000001898


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01200000000731


From: Rao, Geetha
Sent: Monday, January 22, 2001 3:01 PM
To: Grewe, Maureen; Mills, Marshall; Sampliner, Gary; Christopulos, Greg; Clapp, Gene
Subject: FW: India/Dabhol Meeting
Duthet PA - 06

Tanurom.. Attached is background material for the Enron meeting on Wednesday. Pls.
note Mr. John Hardy will also be attending.

Sela Original Message-----

From: Tom.Briggs@enron.com [mailto:Tom.Briggs@enron.com)
Sent: Monday, January 22, 2001 1:54 PM

To: geetha.rao@do.treas.gov

Subject: India/Dabhol Meeting

Geetha,

My apologies for the delay in sending this material. I have lost both ay
regular assistant and my temp so I am a bit overwhelmed.

fohn xdy will be attending the eting tomorrow at 3. His SS# is
(b)(6) and birthdate is ((o6)] Tf you could remind me of the

‘eae of the meeting I would appreciate it. I managed to lose that as
well.

John and I have a brief agenda: 1) we want to update you on Dabhol and 2)
we want to discuss way in which the USG may become involved in encouraging
market reform necessary to extract value out of our generating asset.
Specifically, we want to focus on refgorm at the Indian federal level that
will be necessary to deliver power to customers other than MSEB.

We look forward to meeting you tomorrow.

(See attached file: Dabhol PPA - DC Talking Points.doc)

00500000001867


Kosmides, Ivy

From: Kosmides, Ivy

Sent: Monday, September 24, 2001 2:05 PM
To: Backes, Steven

Subject: RE:

Precludes us meeting on Jamaica, then. The issue is, | am guessing, to do with the DR arrears to foreign Independent
Power Producers (Enron being the largest)--- total is roughly $120 mn for OR, I'm trying to get more info on it for ICERC
review and Bryan Gobin (FBNY).

Pr aes Se hen
Sent ‘Morey, Seplember 24, 2008 2:02 PH
To: Kesmides, Ivy
Subject: RE:

2:30, Has something to do with investment there. Enron called me end | said either | or you would sit in on the

j

-----Original Message---—

From: Kosmides, Ivy

Sent: Monday, September 24, 2001 1:50 PM
To: Backes, Steven

Subject: RE:
What time and why?

I was going to meet with the DR economist anyway, but since they were meeting with Enron, | decided to sit in
and talk to State when the mtg ended.

~Onginal Message--~
From: Caches, Steven
Sent: encay, September 24, 2001 1:47 4
To: Kosmides, Ivy
Subject: RE;

Bill Schuerch,

cae meer.

From: Kosmides,

Sent: Monday, Benikeak 2001 1:46 PM
To: Backes, Steven

Subject: RE:
WES?
~-Onginal Message-—
From: Backes, Steven
Sent: Monday, September 24, 2001 1:46 PM
To: Kosmides, Ivy
Subject: RE:

Enron is coming over here tomorrow to meet with WES.

--—Original Message-——-

From: Kosmides, Ivy

Sent: Monday, September 24, 2001 1:38 PM
To: Backes, Steven

Subject: RE:

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00500000001957


From:
To:
Subject:

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4/5/99

cer

Elizabeth K. Stewart
clappg, christopulos, bloomgardend

DR Country Assistance Strategy - on WB Board for May 11

eichenbergerj,sillsg

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BOMBAY (AP)—-U.S. Serbeeseces bo leek Fechend Coreete Werned ordey tat
foreign investment in India would falter of poRical pressures
Preterce te ered the $3 ition Enron Come ) power project.

“It regrettal Seeds the conoem among Arvarioas ard other fereign inveaiora
that Incia Terrains a lees-inan-rokablo cessriston forthe if investment
dollars,” Celeste told an audience of business leaders, politicians and

ongovernment agencies in Bombay, India’s financial hub.

India's largest-ever investment has been in trouble since December

sere iaanaraan tat wi Slant Crean Comm,
review a powe’ energy

Maharashtra considers the power rates being charged are are esorbaant

The agreement si in 1895 details the rote st which Enron's indian
subsidiary, the Power Co., will sell electricity to the state.

The ‘s @ power of 740 megawatts, already has been
cotorbned inn he second pose ol 1444 magnate echoed

completion by end 2001
Depreciation of the Indien and tof used to generate
electricity caused the power r gene Gonerelod ty tus Even prclectic ah naees

unit as INR1 Seta wnan tes Goal
ae "go agreed on was signed six years ago

Enron has said it saw no current need to renegotiate the tariff and maintained that a transition from naphtha to
natural gas would reduce the tariff,
cleste, ‘an apppintee of former U.S. President Bill Clinton, said he
discussions, but

both sides would find a solution in ‘cautioned x
“perceptions American n investors will be affected by the
challenge to Dabhol and how Ks rescived a
in software and information US,
wasters wore wary thd because of plc prose lhe and

State level that had slowed the econo:

Stressing the need to s1 then business bes India, Celeste focused on
the Enron project and asked that "The Dabhol ce pple pi frag bd ical
successful Amercan investment in India and net a symbol of fe impediments that
Still hinder even greater foreign direct investment”

Copyright (c) 2001 Dow Jones aad Company, ine.
Revered Sy ReWsEOGELAN. 122101 7:23 PM

From Bao, Geena Message——
To: Gtewo, Maurer 22, 2001 3:01 PM
To: Seve its, Marshall; Sampliner, Gary, Christopulos,
Co: ‘Save
Sm India/Dabhol Meeting

Attached is background material for the Enron meeting on Wednesday, Pls. note Mr. John Hardy will also be
attending.

From. fom: Tom Briggs@enron,
Sort Monday. nay 2.2 2001 154M ie

Sutjec IndiaSeohot Mesng

Geetha,

apologies for the delay In sending this material. i have leet bot
aniemennesi $0 | am a bit overwhelmed. sad

(ok Tpeting foenorrow st 3 bey A UN
) AL berate VO). oucouaromin met he

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From: Bitsberger, Timothy

Sent: Wednesday, December 19, 2001 11:18 AM
To: Carleton, Norman, Wiedman, Mark
Subject: enron

we need something by the time people leave on fnday, organize i how you want. but i do want a couple of things.
1. the message
2. facts/examples showing these things happen

personally, j think an issue rehash, though helpful, is not needed. [(b)(5)]

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