FYI
---------------------- Forwarded by Elizabeth Sager/HOU/ECT on 08/19/99 04:43 
PM ---------------------------
   
	Enron Capital & Trade Resources Corp.
	
	From:  Cynthia Sandherr @ ENRON                           08/13/99 04:48 PM
	

To: Joe Hartsoe/Corp/Enron@Enron
cc: Elizabeth Sager/HOU/ECT@ECT, Steven J Kean/HOU/EES@EES, Christi L 
Nicolay/HOU/ECT@ECT, James B Fallon/HOU/ECT@ECT, Joe 
Hillings/Corp/Enron@Enron 
Subject: Re: TVA authority  

Joe:  I do not know if you have contacted I.G. George Prosser yet.  
Apparently,  the Hill & Knowlton bad press is all over today's local valley 
papers.  I spoke to two Hill contacts today who advise that if George Prosser 
appears at all reluctant to proceed,  please let me know and these Hill 
contacts will contact him directly to advise him to go forward as they are 
willing to lend him their political support.


Cynthia Sandherr
08/11/99 08:49 PM


To: Elizabeth Sager/HOU/ECT@ECT, Joe Hartsoe/Corp/Enron@Enron
cc: Steven J Kean/HOU/EES@EES, Christi L Nicolay/HOU/ECT@ECT, James B 
Fallon/HOU/ECT@ECT, Joe Hillings/Corp/Enron@Enron (bcc: Cynthia 
Sandherr/Corp/Enron)
Subject: TVA authority

Craven Crowell's authority to act without a full TVA board is limited by 
federal statutory authority to only carrying out "administrative functions."  
He is explicitly prohibited from carrying out "policy functions" without the 
other board members in place.  We know who the Administration intends to 
nominate for the two board vacancies, however, these candidates can only be 
officially nominated and confirmed by Congress sometime after Congress 
reconvenes on September 8th at the earliest.

Since I know you would like an immediate fix to your TVA control area issue, 
during the month of August you might pursue TVA's policy actions against our 
control area in violation of federal statute.  (In the meantime, however,  I 
am continuing to work the Appropriations strategy (best possible resolution 
date October 1, 1999) and the Authorization strategy (best possible 
resolution date October 7, 2000.))

Currently, the TVA Inspector General George Prosser who can be reached at  
(423) 632-4120 is in hot pursuit of Mr. Crowell.  He has successfully had 
legislation introduced to curb Mr. Crowell's authorities, and soon will issue 
a report (sure to receive much front page negative publicity) that Mr. 
Crowell "lied" to Congress by failing to disclose a TVA $100,000 monthly 
publicity retainer with Hill & Knowlton to a House Congressional Oversight 
Committee.  Ironically, this retainer was to help Mr. Crowell obtain 
favourable earned media.

We believe  the I.G. could easily be persuaded to pursue the wrong-doing 
caused by Mr. Crowell in developing TVA policy in the absence of a board.  If 
he pursues the case, he would likely immediate reinstate our positions during 
the investigation so as not to cause further harm, plus he could require TVA 
to pay damages if he successfully proves his case.  Regardless, this 
investigation would cause nasty publicity for TVA.

I have discussed with Joe Hartsoe what materials he may wish to provide the 
I.G. in order to help him make our case that this action "created policy."  I 
have also given Joe Hartsoe a listing of all of TVA's industrial customers 
likely curtailed during the heat wave.  We should contact a few of these 
industrials in order to also ask them to intervene against TVA's policy 
action on our control area.  These industrials could also claim monetary 
damages from being wrongfully curtailed by a policy that arguably reduced the 
amount of available power in the region.  

The down side is Mr. Crowell could pursue "administrative" retributions 
against Enron activities.