IN: A little humor to keep us smiling in these troubled times: Make sure to read the last one. *************************************** Social Studies: Some Useful Definitions Feudalism You have two cows. Your lord takes some of the milk. Fascism You have two cows. The government takes both, hires you to take care of them and sells you the milk. Applied Communism You have two cows. You must take care of them, but the government takes all the milk. Capitalism You have two cows. You sell one and buy a bull. Your herd multiplies, and the economy grows. You sell them and retire on the income Enron Venture Capitalism You have two cows. You sell three of them to your publicly listed company, using letters of credit opened by your brother-in-law at the bank, then execute a debt/equity swap with an associated general offer so that you get all four cows back, with a tax exemption for five cows. The milk rights of the six cows are transferred via an intermediary to a Cayman Island company secretly owned by the majority shareholder who sells the rights to all seven cows back to your listed company. The annual report says the company owns eight cows, with an option on one more. - No Balance Sheet provided with the release.

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OUT: Useful Definitions

IN: The approval process initiated in 1998 for all meeting and event expenditures in excess of $5,000 has enabled Enron Americas to better assess the business value of events, accurately track our activities and save money. These events include customer and employee meetings, and trade shows. EA has made some modifications to the process, which are described in this memo. The $5,000 threshold remains in effect for all customer events. However, the threshold for approval for employee meetings and events has been lowered to $500, and some additional requirements must be met prior to approval. Please be sure to follow the procedures described below for all meetings and events, so we can continue to successfully manage these events. 1) Prior to making any commitments to customers or vendors, all customer events with anticipated costs in excess of $5,000, and all employee events with anticipated costs in excess of $500 must be reviewed by the Enron Americas Public Relations department and approved by the Enron Americas Office of the Chairman 2) The PR department will handle the site search and hotel contract negotiations for all such events. Once this is completed, the PR department will work with you to plan and produce your event in its entirety; or they can provide as much or as little assistance as you require. The PR department will be responsible for helping you achieve the best value for your program and EA. 3) A completed expenditure request form (see attached) and supporting documentation is required for each event. Employee meetings require a detailed agenda as part of the event documentation prior to approval. Please submit the completed expenditure request form and documentation to the PR department at EB 3642, or work with PR department employees to complete the form. 4) After PR review, the expenditure will be submitted to the EA Office of the Chairman for final approval. Additionally, the PR department can assist in the procurement of tickets for various local sporting events and concerts. If you have any questions regarding this process, would like assistance planning an event, or need tickets for a Houston event, please contact Dorie Hitchcock in the PR department at (713) 853-6978. Thank you for your cooperation.

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OUT: Meeting and Event Expenditure

IN: ENA can confirm the transaction on our "omnibus confirmation" with one or two minor changes (Joe: please call me). Also, ENA sent a draft ISDA Master Agreement to Puget Sound Energy on 3/9/99. If you anticipate more financial trading, please let me know as we should pursue execution of the ISDA Master Agreement. Thanks. Sara

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OUT: Puget Sound Energy

IN: Jean/Cris, As a follow-up to our meeting last week, I reviewed the Gallup closing documents and I spoke to Gerald Nemec today regarding whether Enron Corp. issued a financial guarantee to ECHO (funded by Natwest/Equity Investor, Patty Melcher) to compensate for the risk from closing to the start of operations. Gerald Nemec and Mark Knippa both confirmed that Enron did not issue a financial guarantee, even though the project closed prior to the start of operations. At the time of closing, construction was about 2/3 complete and the legal documents were in place stating a definitive start date. The definitive start date ensured that funds would flow regardless of whether the facility was operational. Essentially, TW was on the hook for the annual payment, etc. beginning on the start date outlined in the legal agreement. The investors were comfortable with the project's progress at the time of closing and they basically were willing to take TW/Enron credit risk without a financial guarantee. Let me know if you have any other inquiries. Thanks, Lisa

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OUT:
Project Gallup