Scott asked me to forward you our latest election update. We have been 
writing these since late October when we predicted a 276-262 Bush win in the 
electoral college and even highlighted potential delays connected to the 
overseas military vote in Florida, but no one could have predicted this mess!

Cordially,

Robert Johnston
Manager, Political and Sovereign Risk
Enron Global Markets
x39934
---------------------- Forwarded by Robert Johnston/HOU/ECT on 11/28/2000 
05:48 PM ---------------------------


Robert Johnston
11/28/2000 11:20 AM
To: Mike McConnell/HOU/ECT@ECT, Gary Hickerson/HOU/ECT@ECT, Jeffrey A 
Shankman/HOU/ECT@ECT, Joe Gold/LON/ECT@ECT, Mark Schroeder/LON/ECT@ECT, Vince 
J Kaminski/HOU/ECT@ECT, John L Nowlan/HOU/ECT@ECT
cc: William Stuart/HOU/ECT@ECT, Jeff Kinneman/HOU/ECT@ECT, Michelle D 
Cisneros/HOU/ECT@ECT, Pushkar Shahi/HOU/ECT@ECT, Paul Pizzolato/HOU/ECT@ECT, 
John Greene/LON/ECT@ECT, Ellen Su/Corp/Enron@Enron, Steve 
Jacobellis/NA/Enron@Enron, Eric Scott/HOU/ECT@ECT, Kristin Walsh/HOU/ECT@ECT, 
Trena McFarland/NA/Enron@Enron, Scott Tholan/Corp/Enron@Enron, Kristin 
Walsh/HOU/ECT@ECT, John A Cote/HOU/ECT@ECT, Cynthia 
Sandherr/Corp/Enron@ENRON, Chris Long/Corp/Enron@ENRON, Jeffrey 
Keeler/Corp/Enron@ENRON, James D Steffes/NA/Enron@Enron, Shane 
Dallmann/LON/ECT@ECT, Aaron Armstrong/LON/ECT@ECT, Jurgen Hess/LON/ECT@ECT, 
Martina Angelova/LON/ECT@ECT, J Christopher Champion/HOU/ECT@ECT, Jim 
Roth/EU/Enron@Enron, Richard Shapiro/NA/Enron@Enron William 
Stuart/HOU/ECT@ECT, Jeff Kinneman/HOU/ECT@ECT, Michelle D 
Cisneros/HOU/ECT@ECT, Pushkar Shahi/HOU/ECT@ECT, Paul Pizzolato/HOU/ECT@ECT, 
John Greene/LON/ECT@ECT, Ellen Su/Corp/Enron@Enron, Steve 
Jacobellis/NA/Enron@Enron, Eric Scott/HOU/ECT@ECT, Kristin Walsh/HOU/ECT@ECT, 
Trena McFarland/NA/Enron@Enron, Scott Tholan/Corp/Enron@Enron, Kristin 
Walsh/HOU/ECT@ECT, John A Cote/HOU/ECT@ECT, Cynthia 
Sandherr/Corp/Enron@ENRON, Chris Long/Corp/Enron@ENRON, Jeffrey 
Keeler/Corp/Enron@ENRON, James D Steffes/NA/Enron@Enron, Shane 
Dallmann/LON/ECT@ECT, Aaron Armstrong/LON/ECT@ECT, Jurgen Hess/LON/ECT@ECT, 
Martina Angelova/LON/ECT@ECT, J Christopher Champion/HOU/ECT@ECT, Jim 
Roth/EU/Enron@Enron, Richard Shapiro/NA/Enron@Enron, Clayton 
Seigle/HOU/ECT@ECT 
Subject: Election Update 11/28


Summary:

Vice President Gore believes he has won the state of Florida and the 
election, and is determined to see
through the raft of legal challenges now launched in Florida state courts. 
Texas Governor Bush doesn't really
care what Gore thinks and is moving on several fronts (including possible 
early cabinet appointments)
to press his increasingly obvious public opinionadvantage.

1. Gore Strategy

Gore and his campaign leaders are watching the Bush strategy and refusing to 
accede to the carefully
crafted sense of "inevitability." "This all fades in a nanosecond if we win 
Florida," one Gore campaign adviser
told us. Gore is still hoping to prevail in one of three legal challenges 
that could make a
difference: the "dimpled chad" recount for Palm Beach and Miami-Dade 
Counties; the "absentee
ballot" fraud suit in Seminole County, and; the "butterfly ballot re-vote" 
scenario for Palm Beach.

In order for Gore to gain the Presidency, these decisions would still have to 
produce enough votes for Gore 
to overtake the 537 vote Bush lead (unlikely in Dade, possible in Palm Beach) 
and then be held up by the US 
Supreme Court.  Of course, the US Supreme Court could simply uphold the 
certification and render the Florida cases
 moot (unless Bush decides to drop the Supreme Court action- see below).

The Seminole County case is regarded as overblown because first, the Voter 
Identification Number
was not required under Florida law only by the local election board and 
second, the Republicans only
had access to the ballots before they were mailed out.

Gore well understands that pursuing these cases in Florida court is losing 
him steady ground in the court of
public opinion. As we wrote yesterday, that opinion is steadily turning 
against Gore's crusade and Bush
plans to do everything in his power over the next few days to accelerate that 
turn. Polls from last night,
before Gore spoke, indicate the vice president's position is continuing to 
erode. The percentage of
Americans who say they are willing to wait "at least a little while longer" 
to resolve this issue has
dropped sharply from 51% last week to 37% last night, while the percentage 
who say Gore should
concede has risen from 46% to 56% in the same series of polls.

2. Bush Strategy

As early as today Bush transition officials tell us he could start naming his 
cabinet and make a
new decision on his US Supreme Court challenge. One thing to keep firmly in 
mind, although the
press is full of Andrew Card news today, the real power of the Bush throne 
will be Vice President
Cheney. He is emerging as the great hope for Bush staffers who are already 
growing frustrated
with the lack of focus and disorientation of Bush's "Texas league" inner 
circle.

In the meantime, don't expect Bush to do anything but seek to accelerate the 
trend in the polls breaking against Gore. 
On one front, Bush is considering a proposal to drop his Supreme Court appeal 
before oral
arguments are heard this Friday. Although he would position this decision as 
a "peace offering" to Gore,
the real reasons are far more self-serving. In the first place, Bush no 
longer gets anything from the Court
(unless Gore wins on one of his new lawsuits, and even then Bush could 
re-file with the Court for relief), but
Gore could get an affirmation that recounts should be conducted; that would 
be a huge victory in the public
opinion arena for the vice president. In the second place, Bush realizes that 
the looming Supreme Court
battle gives Gore what little public relations "cover" he has to pursue all 
the other court battles in Florida --
as long as the election remains undetermined because of Bush's lawsuit, Gore 
can justify asking the
American public to hang on a little longer.

3. Bush Cabinet Appointees Imminent?

But Bush is moving on another front, and he is now expected to name at least 
some of his senior cabinet
appointments as early as this week. The names he is considering are all 
people who have agreed to serve in
his cabinet and whom he has long since chosen to serve. Naming some of the 
new Bush cabinet members
in public, Bush officials believe, would increase the voters' sense that this 
will be a moderate administration
of household names they can trust. That is why the transition team wants to 
announce Colin Powell as
Secretary of State, Condoleeza Rice as National Security Advisor and Sam Nunn 
as Defense Secretary as
soon as possible, even though Nunn is playing hard to get. There is a 
complication to the strategy since
Powell wants to avoid becoming a political pawn and Nunn cannot afford to be 
part of this strategy right now,
since enraged Democrats would lynch him for "treason." What Bush wants, of 
course, is a pre-set senior
foreign policy team made up of two African-Americans and a Democrat. 

Only one economic team decision has been made. Bush will name Larry Lindsey 
to one of the top
three economic jobs in the new administration (Treasury Secretary, National 
Economic Council
Director or head of the Council of Economic Advisers) and we expect Lindsey 
to run much of the new
administration's economic policy from whatever slot he eventually occupies. 
Think of this as the Bob Rubin
model. Rubin did not serve as Treasury Secretary during the first Clinton 
period, but ran things from within
the White House.