----- Forwarded by Richard B Sanders/HOU/ECT on 12/01/2000 08:00 AM -----

	MBD <MDay@GMSSR.com>
	09/29/2000 06:26 PM
		 
		 To: James D Steffes <James_D_Steffes@enron.com>, Richard Shapiro 
<rshapiro@enron.com>, Mary Hain <Mary_Hain@enron.com>, Vicki Sharp 
<vsharp@enron.com>, Richard B Sanders <Richard_B_Sanders@enron.com>, Jeff 
Dasovich <Jeff_Dasovich@enron.com>, Mona L Petrochko <mpetroch@enron.com>, 
"'Sandi McCubbin Enron SF'" <smccubbi@ees.enron.com>, "'Sue Mara at Enron 
SF'" <smara@ees.enron.com>, "'skean@enron.com'" <skean@enron.com>
		 cc: "'gfergus@brobeck.com'" <gfergus@brobeck.com>
		 Subject: Political Issues Raised at Meeting with CPUC re subpoenas issued to 
Enron



Today, Friday, Gary Fergus of the Brobeck firm and I met with Attny. Harvey
Morris of the CPUC to negotiate an extension of time for responding to the
five subpoenas issued to Enron affiliates and Portland General.   We
negotiated both an extension for initial responses (two weeks) plus an
opportunity to submit a proposal for a significant reduction in the scope of
the request for production of documents.   This will include a further
extension for other documents that are to be produced, as well as a
reservation of rights to object to the production of other documents.  We
are working in close contact with Richard Sanders and the EPMI legal team in
Portland on further refining both responses and potential objections.

However, in light of recent communications between the Governor's office and
senior Enron officials, and the prospect of additional such communications,
Both Gary and I wanted to report an unusual aspect of the negotiation with
the CPUC.   At the beginning of the meeting, as we were indicating the
overall burden of the request, the CPUC attorney indicated the extreme
pressure the Commission was under to "get to the bottom" of what was
happening in the California power markets.  He also recited that "many
parties have pledged their cooperation in this investigation to the
Governor".  He then proceeded to state that parties who delayed providing
responses and raised objections to the requests for production instead of
cooperating would "be placed on a list of non-cooperative parties" which
would be made available to the Governor and legislators and that such
parties would have to bear the consequences of such actions.

This rather explicit threat is, in my experience, unprecedented at the CPUC.
I also know the attorney in question well enough to know that he would never
invoke political reprisals on his own, and was obviously instructed to do so
by CPUC Pres. Lynch or her senior staff.  Both Gary Fergus and I responded
that such a threat was both improper and disturbing for a party simply
trying to exercise its legitimate rights to adjudicate burdensome discovery
requests, but there was no attempt to withdraw the threat.  This comment
speaks volumes about the pressure which the CPUC President feels to achieve
a politically acceptable result in this matter.  Those senior Enron
officials in communication with the Governor should be made aware of this
incident.

Mike Day