Sara:

In answer to your question, Harvard makes and expects to get the
representation from its counterparts that they are financial institutions
under FDICIA because of the additional argument  we think it offers a
non-defaulting counterparty for netting and setting off obligations. The
regulation says that a party may rely on the representation of its
counterparty in determining whether or not FDICIA applies, giving it the
rights created by FDICIA to net and set off the obligations created under
the swap contract.

Harvard makes the rep, and it seems that Enron should be able to because

we "engage in financial contracts as a counterparty on both sides of one or
more financial markets" and we believe we meet one (or both but only one is
required to make the rep) of the following financial tests

 1. had contracts with a total gross dollar value of at least
$1billion in notional principal with counterparties that are not its
affilitates and
 2.  had total gross mark-to-market positions of at least $100
million in one or more financial contracts with counterparties that are not
its affiliates.

This rep has been made for some time in all relevant trade documentation and
is therefore a matter which is well known by senior management.I hope that
this addresses your concerns in this regard. Please do not hestitate to call
if you should have further questions.

The relevant regulation is found in Title 12 of the Code of Federal
REgulations Chapter II Federal Reserve System Subchapter A Board of
Governors of the Fed... Part 231 Netting Eligibility for Financial
Institutions Regulation EE.

Thanks

Kim Noble