From:  Cynthia Sandherr                           01/11/2000 05:16 PM
	

Rick:  Per your request, please find the one page description of how the 
Washington D.C. office prioritizes both human and financial resources while 
fitting within the Enron budget process.   I have attached our 1999 
activities report which illustrates the process described below.  

Congress operates in a two year cycle while the Administration operates in a 
four or eight year cycle.  Thus, it is necessary for our prioritization to 
focus on the long term.  Within the context of the Congressional and 
Administration's Calendars, our office determines and communicates doable 
priorities based upon the environment in which we operate.  In addition, we 
actively work behind the scenes and commit resources to affect and change 
this environment.

 On an annual basis, we communicate federal legislative and global 
opportunities which we believe affect our operations via briefings to Steve 
Kean, who along with our assistance, submits our proposed goals to the Enron 
Management Committee,  Global CEO's , individual operating company heads and 
heads of key divisions.  Many dialogues and briefings occur resulting in goal 
adjustments and additions.  During this dialogue, we advise on possible new 
corporate strategies based upon political realities and communicate necessary 
resources required in order to achieve the legislative successes.  

Once this vetting process is complete (December-January timeframe), and the 
Management Committee prioritizes the federal Corporate goals, we submit our 
budget and assure this budget directly correlates to the necessary resources 
(both human and financial) detailed and allocated to meet these priorities.  
(Note:  the budget process usually occurs in the August-October timeframe).  
On the financial side, we keep current as to the rates and the expertise 
available on the market, as well as, track potential conflicts of interest.   
It's our job to know our environment and to lay out strategy.  On an annual 
basis, we adjust our resources which can include dropping some issues, 
reassigning personnel, hiring or letting go necessary outside counsel, etc.  

We remain mindful that in order to achieve legislative success, it is 
necessary to follow long-term planning so as to allow for us to build 
credibility, keep important political relationships viable and, ultimately, 
place us in the best possible political position to achieve success. 

Our budget does its best to recognize that the Congressional process can be 
unpredictable and that Congress reacts to fast occurring events and public 
reaction.   It is rare when we have not foreseen some form of a potential 
issue; thus, we always operate within budget.  An example of a contingency 
issue would be India setting off a nuclear device, a possibility we had 
accounted for yet could not possibly exactly predict nor could we predict the 
fall-out and precise Corporate impact.  However,we were still able to budget 
for possible permutations for such an occurrence and make adjustments as 
needed in order to meet our goals and stay within our budget.  Based upon the 
experience of the people in our office, we have been very successful in 
anticipating these type of occurrences.

Our report details our 1999 results and projects Enron priorities for 2000 
although neither the President's State of the Union address which outlines 
the Executive Branch's legislative agenda for 2000 nor the Republican 
Congressional response and 2000 Congressional legislative agenda has as of 
yet been delivered nor finalized.