Six Meetings Cited Between Enron Corp. And Officials of Bush Energy Task Force
The Wall Street Journal, 01/09/2002

Democrats squeeze information from White House on Enron-Cheney meetings
Associated Press Newswires, 01/09/2002

Enron reps met 6 times with Cheney, staff / Letter to L.A. congressman likely to increase controversy
The San Francisco Chronicle, 01/09/2002

Big Banks Seeking Enron's Energy-Trading Business
The New York Times, 01/09/2002

USA: UPDATE 1-Enron gets bids for trading operations.
Reuters English News Service, 01/08/2002

Enron favours Sempra Energy to buy its metals trading group - sources
AFX News, 01/08/2002

Philippine Min Expects Enron Pwr Pacts Buyout By End-Jan
Dow Jones Asian Equities Report, 01/09/2002

Unresolved Problem: Interview With Terry Keenan
Fox News: The O'Reilly Factor, 01/08/2002

Recession-Proof? Hot Texas Deal Climate Could Chill
American Banker, 01/09/2002

Caught Off Balance Bond sleuths were ahead on Enron. Now they have their sights on three others.
Fortune Magazine, 01/21/2002

Analysts' Ratings: Gas Utilities
Dow Jones Professional Investor Report, 01/09/2002

____________________________________________________________________________

Six Meetings Cited Between Enron Corp. And Officials of Bush Energy Task Force
By Tom Hamburger
Staff Reporter of The Wall Street Journal

01/09/2002
The Wall Street Journal
A4
(Copyright (c) 2002, Dow Jones & Company, Inc.)

WASHINGTON -- Enron Corp. executives met six times last year with officials of the Bush administration's energy task force, though they did not talk about the energy company's finances, Vice President Dick Cheney's office said in a letter to Capitol Hill. 
One of the meetings included a 30-minute session between the vice president and Enron Chief Executive Kenneth Lay that had been previously disclosed. In addition, Enron officials met in large and small group meetings with the task-force staff. Two of the meetings occurred after the staff completed writing its report, including one as late as Oct. 10 -- days before Enron began its rapid slide into bankruptcy court.
"None of these meetings included a discussion of the financial position of the Enron Corporation," David Addington, the vice president's legal counsel, wrote in a letter Thursday to Rep. Henry Waxman of California, ranking Democrat on the House Government Reform Committee. 
Mr. Addington, who was responding to a request from Mr. Waxman for information on Enron's contacts with members of the energy task force, provided few details. He suggested all of the meetings were consistent with the Energy Policy Development Group's plan to conduct "meetings with a broad representation of people potentially affected by the Group's work." 
Nonetheless, these newly disclosed contacts are likely to become grist for further congressional inquiry as half a dozen committees plan oversight hearings into the failure of the giant energy-trading company. Next month, the Senate Government Affairs Committee expects to open hearings on Enron. Committee Chairman Joseph Lieberman (D., Conn.) said at a news conference last week that he wanted to explore, among other things, whether Enron influenced administration energy policy. 
The letter produced a swift response from Mr. Waxman, who wrote the vice president yesterday asking for more detail. The first response, he said, "raises additional questions about the extent to which Enron may have influenced the administration's energy policies or provided information about its own operation." For example, Mr. Waxman noted that the day after Mr. Cheney met privately with Mr. Lay, the vice president stated his opposition to electricity price caps in California, a position that Enron had espoused previously. 
Mr. Waxman said the response did not provide names of participants other than the vice president, nor did it mention the subject of the meetings, any requests for policy changes and copies of any documents or e-mail communications between Enron and the administration. 
White House spokeswoman Claire Buchan said task force members conducted the meetings to learn as much as possible about energy issues. The meetings, she said, were held by the staff with "many, many groups across a broad range of interests to insure they had a thorough understanding" of the topic. She said that the White House was committed to cooperating with members of Congress reviewing the Enron situation "provided they are not pursuing open-ended investigations or fishing expeditions." 
Enron, the nation's biggest marketer of electricity and natural gas, filed for bankruptcy-court protection following a crisis of confidence among its investors. The problems have resulted largely from Enron's dealings with private partnerships, run by some of its own executives. The company saw its market value plunge recently to about $540 million from more than $77 billion last year.

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	

Democrats squeeze information from White House on Enron-Cheney meetings 

01/09/2002
Associated Press Newswires
Copyright 2002. The Associated Press. All Rights Reserved.
Democrats squeeze information from White House on Enron-Cheney meetings 
WASHINGTON (AP) - Because of Enron Corp.'s sudden bankruptcy, congressional Democrats have won their first victory in a nine-month effort to squeeze information from the Bush White House on its ties to the energy industry. 
For the first time, the White House is acknowledging that Enron representatives met six times with Vice President Dick Cheney or his aides on energy issues last year, most recently in mid-October just before the investing public realized the company was heading for disaster. 
Since last April, Cheney had fended off congressional requests for the identities of business executives and lobbyists who met with the White House as the administration formulated its pro-industry energy plan. 
The picture changed when Rep. Henry Waxman, D-Calif., began pressing the White House about last month's crash of Enron, whose CEO, Ken Lay, is among President Bush's biggest political supporters. 
The vice president's office said the last Enron meeting with a Cheney aide was Oct. 10, just six days before the first in a series of public admissions by the company about its true financial condition that sent it careening into bankruptcy court.

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	

NEWS
Enron reps met 6 times with Cheney, staff / Letter to L.A. congressman likely to increase controversy
Carolyn Lochhead
Chronicle Washington Bureau

01/09/2002
The San Francisco Chronicle
FINAL
A.3
(Copyright 2002)

Vice President Dick Cheney or his aides met six times with Enron Corp. executives while the administration crafted its energy policy, Cheney's office revealed in a letter made public yesterday, fueling criticism over the energy company's White House influence. 
The letter to Rep. Henry Waxman, D-Los Angeles, from Cheney counsel David S. Addington, came after a standoff that has threatened to escalate into a court battle.
But rather than quell the furor, the letter's limited disclosures appeared likely to lend ammunition to critics seeking to link Enron's Dec. 2 bankruptcy to the administration. Waxman called the letter helpful but insufficient. 
"The vice president has given us a letter with some of the information we requested about the energy task force," Waxman told The Chronicle yesterday. "I think that's useful to have, but it only gives us some answers, and I think we need a lot more." 
Until now, the administration has refused repeated congressional requests to disclose whom the Cheney-led task force met with to form its energy policy. Comptroller General David Walker is expected to make a decision later this month on whether to sue to request the task force's internal documents. 
Enron, once the nation's seventh largest corporation, collapsed in a mire of dubious financial maneuvers, dealing a major blow to thousands of employees and stockholders and sparking an uproar on Capitol Hill. 
Eight separate congressional investigations into the company's business dealings have started, and many Democrats vow extensive probes into Enron's relationship to the administration, especially former Enron chief executive officer Kenneth Lay's close ties to President Bush. Lay was a longtime Bush fund-raiser, and he and Enron were major contributors to Bush's presidential campaign. 
"Enron was a major player in the energy issue, we saw them actively involved in California, and we need to find out what influence they had over the administration's energy policy and whether people in the administration knew what was going on in Enron before its collapse," Waxman said. "This is going to be an ongoing investigation of a major financial catastrophe." 
The letter from Cheney's counsel released by Waxman's office, which is dated Jan. 3, said Lay had met with Cheney April 17 for a half hour. The letter said the two had discussed "energy policy matters, including the energy crisis in California, and did not discuss information concerning the financial position of Enron Corp." 
The letter responded to Waxman's Dec. 4 request for Cheney to "release information about secret contacts your energy task force had with Enron Corporation. . . . In light of Enron's financial collapse, it is important to know whether Enron communicated pertinent facts about its financial situation to the task force." 
Addington noted that Cheney had revealed the meeting with Lay in a May 17 interview on the television program "Frontline." 
Bush appointed the Cabinet-level task force, called the National Energy Policy Development Group, to develop the administration's energy policy, which leaned heavily toward boosting supplies, including the controversial proposal to open the Alaska National Wildlife Refuge to drilling. The task force was formed Jan. 29, issued its report in early May and shut down Sept. 30. 
The letter said the group's support staff had met with "a broad representation of people potentially affected by the group's work," including energy companies, environmental advocacy groups, regulators, unions, researchers and other parties. 
But top environmental groups had complained bitterly that they were shut out of its deliberations. 
"We had one meeting with the vice president a month after the report was released," said David Hawkins, director of the National Resource Defense Council's climate center, which has also filed a lawsuit to force the task force to hand over documents. 
"I know that the environmental groups' leadership asked repeatedly for a meeting with the vice president before the plan was released, and we never got that meeting," Hawkins said, adding that they had been allowed one meeting with the task force staff. 
The letter released yesterday by Waxman's office said Enron representatives had met with the task force's executive director twice, on Feb. 22 and March 7. The staff met April 9 with representatives of two dozen utilities, including Enron. 
Two more meetings with Enron took place after the report was released, the letter said, including an Oct. 10 meeting with the former task force executive director, who had moved to the vice president's staff. The letter said neither meeting had any discussion of Enron's financial position. 
Addington played down the meetings, noting that Cheney had met with Lay only once and disclosed the meeting on television in May, and that none of the meetings had discussed the company's finances. 
Critics were unmoved, however, saying the administration was continuing to stonewall. 
"This is one of these things where just hiding the information continues to make the story worse and worse," Hawkins said. "And dribbling it out by saying, 'OK, we'll tell you some of the people we met with such as Enron,' leaves the question, . . . why can't they tell us about meetings with other industry representatives?" 
The vice president's office did not return requests for a response.

PHOTO; Caption: Vice President Dick Cheney led a task force to establish energy policy. 
Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	

Business/Financial Desk; Section C
Big Banks Seeking Enron's Energy-Trading Business
By JONATHAN D. GLATER

01/09/2002
The New York Times
Page 4, Column 3
c. 2002 New York Times Company

Several financial institutions and companies, including Citibank, UBS and BP, have indicated a serious interest in buying the energy-trading business of the bankrupt Enron Corporation, according to people involved in setting up an auction of the business. Each company was required to put up a $25 million deposit to bid for all or part of the operation, according to court documents. 
An Enron spokeswoman, Karen Denne, would not comment on the number of bidders or their identity. ''All we're saying is that we received multiple bids,'' she said.
There were conflicting reports from different sources yesterday of additional interested buyers, and one lawyer whose client will be involved in the auction said that other companies might submit bids even though the official deadline had passed. The auction is scheduled to take place tomorrow. ''We have the ability to be flexible,'' the lawyer said. 
Trying to buy a piece of Enron is not as surprising as it may sound, according to analysts who follow energy trading and Enron's business. What is valuable in a trading operation, according to one analyst whose firm is involved in the bankruptcy proceedings, is not just the tangible assets -- the computers, proprietary software and other necessary tools of trading -- but the experience of its employees. And surprisingly few employees have left the trading operation of Enron North America, a subsidiary. 
More than 500 employees remain, including researchers, traders and analysts whose job it is to determine what the price of a given transaction should be, Ms. Denne, the Enron spokeswoman, said. ''There has been a real effort to keep that business intact so that Enron would retain some of the benefits of that business,'' she said. 
Part of that effort included payments of millions of dollars to keep crucial employees, including some natural gas and electricity traders, both before the collapse of Enron's merger with Dynegy and soon before the company sought bankruptcy protection. Those payments, which were criticized by creditors at the time, may have bolstered the value of the trading business. 
''Forget about having all these physical assets,'' said Peter Rigby, director of utilities, energy and project finance for Standard & Poor's. ''It's a very knowledge-dependent business.'' 
An energy trading business at its simplest sells energy commodities, like gas or electricity, at a specific time, Mr. Rigby said. But the business becomes more complicated for a market maker like Enron, which matches buyers and sellers of commodities, as well as hedging products that allow companies, utilities or other entities to protect themselves from fluctuations in the prices of energy products. Some traders might watch the weather in different parts of the country to anticipate energy needs, for example. 
Where the experience becomes valuable, though, Mr. Rigby said, is in understanding more of the complexities of energy markets -- the times of peak use in different markets in different time zones, the location and capacity of power plants in different regions and potential matches of buyers and sellers. 
''You've got to know about markets; you've got to know about the weather; you've got to know about power markets and fuel markets,'' he said. 
But determining how much that experience is worth is another question -- complicated, Enron's lawyers say, by the fact that bids are taking the form of ownership stakes in a joint venture that would also operate the trading business. Potential buyers propose the percentage of the joint venture they would own, the lawyer said; the advantage to the trading business is the financial credibility that it would have as a result of financial backing from outside Enron. 
A committee of Enron's creditors and company executives will meet with bidders this week to try to improve the offers that have been made. A winning bid could be approved as early as Friday by the bankruptcy court.

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	

USA: UPDATE 1-Enron gets bids for trading operations.

01/08/2002
Reuters English News Service
(C) Reuters Limited 2002.

NEW YORK, Jan 8 (Reuters) - Two banks have submitted bids for a controlling stake in Enron Corp.'s dormant energy trading business, moves that may allow the once-dominant business to revive in coming weeks, people familiar with the company's plans said Tuesday. 
Enron, which declared bankruptcy on Dec. 2, received bids from Citicorp Inc. and UBS Warburg for a majority stake in the Houston-based energy trading operations. But a third financial institution that previously expressed interest, J.P. Morgan Chase & Co. declined to submit a bid by last night, the deadline for bids for the Enron assets, these people said.
Citicorp, UBS Warburg and J.P. Morgan declined to comment on any interest in Enron assets. 
Analysts said its difficult to value the once-powerful trading operation that has virtually shut down, hobbled by worries over Enron's murky finances. The assets being auctioned make up the bulk of Enron's wholesale services business, which generated $94.9 billion in 2000, with $2.2 billion in revenue. 
John Olson, an analyst with Houston-based Sanders Morris Harris, estimated the trading business stake could go for $1 billion to $1.5 billion, since "this thing is going to have to crawl before it can walk." 
However, Robert Chambers, analyst with Lehman Brothers, said he anticipated bids of no more than $100 million, since he said Enron is basically auctioning off only "people, computers and software, but not the book," referring to contracts that Enron had forged before its bankruptcy. 
"Chances of getting a $2 billion auction bid are impossible, given that they are not selling the book," said Chambers. He acknowledged being "bearish" on Enron, but said there is still Enron, particularly its distressed bonds, which he values at 35 cents on the dollar, even though they are trading at 24 cents. 
Another analyst, who asked to remain unnamed, said the operation could command a value of 10 times earnings, or about $10 billion, and any valuation depends on "a big caveat of whether this trading operation will come back." 
In addition to the banks, British oil giant BP Plc also said it may be interested in the Enron operations, once the world's biggest trader of contracts for natural gas and other energy commodities. 
BP said it had submitted a bid of $25 million for a small portion of Enron's assets, including some back office functions and information technology assets. A spokesperson for the London-based company it said it may be interested in other assets but declined to elaborate. 
Enron has all but shut down its Houston-based trading operations while it seeks a financial backer that could guarantee contracts for the myriad commodities that it has traded. Enron trading operations generated the bulk of its $101 billion in revenue in 2000. 
Previously, Citicorp, J.P. Morgan and UBS Warburg had expressed interest in this role, according to people familiar with the company's plans. 
The company is slated to decide on Thursday whether to accept a bid. Enron lawyers previously stated that the company is not looking for cash bids, but rather an ownership stake of up to 51 percent. The stake would give the bidder cash flow from the operations, but it would agree to guarantee contracts. 
Any bid for the trading operations must be approved by Judge Arthur Gonzalez of the Southern District of New York bankruptcy court, which is overseeing Enron's Chapter 11 bankruptcy case. 
Enron is offloading the trading operations to generate cash to pay off as much as $40 billion in debt. 
Enron collapsed after disclosures of hidden debt in off-balance sheet transactions destroyed investor confidence in the Houston-based company. Enron's advisors have made it a priority to revive the trading operations, which have all but stalled in the wake of the bankruptcy filing.

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	

Enron favours Sempra Energy to buy its metals trading group - sources

01/08/2002
AFX News
(c) 2002 by AFP-Extel News Ltd

LONDON (AFX) - Enron Corp favours the San Diego-based Sempra Energy as an acquirer of its metals trading arm over other interested parties Glencore, the Swiss commodities trader, HSBC, and Goldman Sachs, sources told AFX News. 
"Enron considers Sempra to be the best bidder because it wants the business and the people while other parties just want the positions," the source said.
"The preference of Enron's bankruptcy committee is to find a buyer who is willing to take the people as well as the positions," the source said. 
In this way, Enron would also avoid employee severance costs, he said. 
Sempra director of media relations David Klein said the company is interested in certain assets of Enron, "which would be complementary to our business." 
However, those interests have not been identified to the public, Klein said. 
Yesterday, Enron company sources told AFX News that Enron has already agreed to sell its metals trading arm to Sempra. 
Klein would not comment on the report in line with company policy regarding market rumours. 
Enron was expected to formally announce the winning suitor of its metal business before Christmas, but a decision was delayed because of difficulties in unravelling the group's complex corporate structure, according to a Financial Times report last week. 
However, the deal was completed as early as before Christmas and details are now being formalised, Enron sources said. 
The London-based business would also include operations in the US, the source said. 
Enron could not be contacted at the time of reporting. 
Shares of Enron closed the trading day up 5 cents to 73 cents, while Sempra rose 15 cents to 25.14 usd. 
blms/gc

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	

Philippine Min Expects Enron Pwr Pacts Buyout By End-Jan

01/09/2002
Dow Jones Asian Equities Report
(Copyright (c) 2002, Dow Jones & Company, Inc.)

MANILA -(Dow Jones)- Philippine Energy Secretary Vincent Perez said Wednesday he expects the government to reach a deal by the end of January to buy out power contracts of financially-troubled Enron Corp. (ENE). 
Perez told reporters that the Power Sector Assets & Liabilities Management Corp., or Psalm, appears to have secured a large discount for the contracts.
Psalm was created to assume the debts and assets of National Power Corp. (Q.NAP), or Napocor, prior to its privatization. 
"For Psalm to sign an agreement with Enron, a higher discount rate must be offered and it looks like it's going to happen," Perez said. 
Enron initially offered a 12% discount on future cash flow from its power supply contracts with Napocor, but Psalm wanted a discount rate that is in the "high teens." 
"Psalm and Enron are still in discussions. We expect something by the end of the month," Perez said. 
Enron's operations in the Philippines include two oil-fired plants - the 110-megawatt Batangas plant and the 116-MW plant in Subic Bay - which the company runs under build-operate-transfer contracts with Napocor. 
Under the terms of its power contracts with Napocor for the Batangas and Subic Bay power plants, if one party seeks to pull out of the contract ahead of the expiry date, both parties will negotiate the cost of exiting the contract prematurely. 
-By Cris Larano, Dow Jones Newswires; 632-885-0288; cris.larano@dowjones.com

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	

News; Domestic
Unresolved Problem: Interview With Terry Keenan
Bill O'Reilly, Terry Keenan

01/08/2002
Fox News: The O'Reilly Factor
(c) Copyright Federal Document Clearing House. All Rights Reserved.

O'REILLY: In the "Unresolved Problem" segment tonight, who's at fault for the Enron debacle? I say the Justice Department must investigate Enron executives who made millions while mismanaging the company into bankruptcy, and the little guy got hosed. 
But Fox News financial reporter Terry Keenan believes individual stockholders are at fault, as well. Terry, who hosts the weekend business program "CASHING IN," joins us now.
This is personal to me, because I had Enron stock. And the reason I bought it was because I buy a tout sheet by a guy named McIntyre up in Massachusetts, pretty good reputation, guys have a (inaudible) track record. He's telling me Enron's a good buy. I buy it. And how am I supposed to know what these criminals are doing behind the scenes at this company? 
TERRY KEENAN, FOX NEWS SENIOR BUSINESS CORRESPONDENT: Well, if there was fraud involved, and there probably was, that still doesn't negate the fact that this stock was extremely overvalued. There wasn't a lot of good reporting on it. A lot of people didn't even know what the company did. 
And the first rule of investing is, don't buy things that you don't know about, and certainly don't... 
O'REILLY: Well, I knew about it... 
(CROSSTALK) 
KEENAN: ... (inaudible)... 
O'REILLY: ... and I looked at the chart, and this time last year, all the big brokerage houses -- Merrill Lynch, PaineWebber -- all of these people had buys. 
KEENAN: And you probably looked at the chart, and the stock was trading at $80 or $90, and like a lot of people... 
O'REILLY: Well, it had a big P/E. 
KEENAN: ... (inaudible) -- wow, this is, this is a great company. 
O'REILLY: OK. But it was in a good industry, and McIntyre is telling me it's a good stock, all the brokerage houses are saying it's good, all the CNBC people are saying, Hey, it's great. So how do I know? 
KEENAN: Well, the second rule of investing is, don't listen to those Wall Street analysts, because they're paid to tout stocks. And what they're... 
O'REILLY: All right, well, wait a minute... 
KEENAN: ... (inaudible)... 
O'REILLY: ... who am I supposed to... 
KEENAN: ... to do. 
O'REILLY: ... listen to? I can't get the records from this Enron company, I can't see... 
KEENAN: Oh, you can, the SEC, they're filed public records every quarter. 
O'REILLY: Who do I go to, down to Washington and look up Enron? 
KEENAN: No, you go -- there's a Web site, FreeEdgar, doesn't even cost you a cent. You can go on there, you can see -- all the records are probably what you would find, because there were a lot of footnotes and a lot of unexplained questions in this company... 
O'REILLY: To where? You're telling me... 
KEENAN: ... and it was, like I said... 
O'REILLY: ... as an investor, I should go to the SEC Web site and look up Enron. 
KEENAN: The other thing is... 
O'REILLY: And what am I going to find there? 
KEENAN: You're going to find all of their public documents. And you're going to find a lot of footnotes that are going to raise a lot of questions about why this stock was trading at 50 times earnings when its counterparts... 
O'REILLY: Did you know that stock was... 
KEENAN: ... are trading at 50. 
O'REILLY: ... was going to tank? Did you know? 
KEENAN: I didn't buy it. I certainly had a lot of questions. But I didn't understand it. They were trading something called broadband. I didn't know what that was, and I didn't know why the stock... 
O'REILLY: Well, I know what broadband is. 
KEENAN: I didn't know why -- I didn't know trading broadband was. 
O'REILLY: All right. Well, here's the deal. Most people, they're not sophisticated enough, including me, to go to the Web site and figure out what the footnotes are. I don't know. I'm trusting certain people to give me financial advice. Obviously, the people who did that are not on my A-list right now. But you've got guys in that company who made millions of dollars as this stock came down, OK? And I saw public announcements. These guys came out in public and said, "Our stock's fine. Our company's great. There's no problem here." They ought to be arrested! 
KEENAN: And probably ought to disgorge all of those profits... 
O'REILLY: That's right! 
KEENAN: ... from selling the stock. 
O'REILLY: Absolutely. 
KEENAN: But as a small investor, you could go on Yahoo, put in the name Enron, and this is what you would have found in the summertime. This is the insider selling. 
(CROSSTALK) 
O'REILLY: But Terry, look. 
KEENAN: ... those -- those executives selling the stock. 
O'REILLY: Look at this. How many people have time to do this? See? I mean, a lot of people had Enron and their 401(k)s. Their advisers bought it for them. I mean, come on! 
KEENAN: Well, if I had 100 percent of my net worth in Enron stock, I would have been looking to see if my bosses were selling. 
O'REILLY: Fine. Granted. But even when you have insider selling, the only way I know about to get it is from "Barron's," and they list it, like, four or five weeks after it's sold. 
KEENAN: Yeah, but they started selling in 2000. They sold 6 million shares, these executives, in the year 2000. 
O'REILLY: All right. 
KEENAN: Only two million last year. So they got out right at the top. 
O'REILLY: All right. So they got out right at the top. These guys inside, they started selling. But they told the public and all they told all the analysts there's nothing wrong with the stock. It's going continue to do well. So they lied. So they lied. So what should happen to them? 
KEENAN: They should go to jail. If they lied and if they committed fraud, which it perhaps looks like they did, it's not 100 percent sure... 
(CROSSTALK) 
O'REILLY: Well, let's have an investigation, right? 
KEENAN: Yeah. There's eight federal investigations right now. 
O'REILLY: Well, there aren't really investigations. There are congressional hearings. John Ashcroft hasn't assigned the FBI, as we talked about earlier, to investigate the Enron guys. 
KEENAN: No, he hasn't. And hopefully, he will. But you know, $4 trillion in market value has been lost in the stock market over the last year and half. More money was lost in Cisco in 2001 than in Enron. Are we going to have a federal investigations... 
O'REILLY: Yes! 
KEENAN: ... into every one of these stocks? 
O'REILLY: If there's insider selling. If these CEOs are lying and they're selling and saying everything's great, yes. That's fraud in the inducement. That's against the law! 
KEENAN: Well, it's going to keep a lot of people very busy. The public... 
O'REILLY: Well, good. Let's clean this up! 
KEENAN: The public pronouncements are wrong. You can't tout the stock while you're selling, but it's legal for them to sell their stock... 
O'REILLY: And I think... 
KEENAN: ... and disclose it, as they did. 
O'REILLY: And I think all of these -- all of these, you know, spinmeisters that go on your show and Cavuto's show and everything -- I should -- you should give them their home addresses when they do this kind of stuff! 
KEENAN: Yeah, but let me tell you, I've had a lot of negative analysts on who've said negative things. 
O'REILLY: All right. 
KEENAN: Some of them have gotten death threats. 
O'REILLY: I got it. I got it. 
(CROSSTALK) 
O'REILLY: You know what I'm talking about, though. A lot of these pinheads don't know what they're talking about. Terry Keenan, thanks very much. 
We'll be right back. 
(NEWS BREAK) 
(COMMERCIAL BREAK) 
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED. 
Content and Programming Copyright 2002 Fox News Network, Inc. ALL RIGHTS RESERVED. Transcription Copyright 2002 eMediaMillWorks, Inc. (f/k/a Federal Document Clearing House, Inc.), which takes sole responsibility for the accuracy of the transcription. ALL RIGHTS RESERVED. No license is granted to the user of this material except for the user's personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon Fox News Network, Inc.'s and eMediaMillWorks, Inc.'s copyrights or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	

News
Recession-Proof? Hot Texas Deal Climate Could Chill
BY LAURA MANDARO

01/09/2002
American Banker
1
Copyright (c) 2002 Thomson Financial, Inc. All Rights Reserved.

Texas has been having its share of woes -- Enron Corp.'s failure, oil prices declining, and technology companies and airlines in distress -- none of it good news for the banking industry. But opinions differ on how severe the impact on Texas' economy will be. 
Wells Fargo & Co. chief economist Sung Won Sohn, for example, says Texas may avoid the recession altogether thanks to its industrial diversity.
And his colleague Chip Carlisle, the regional president of Wells' metropolitan markets in Texas, said, "Our loan demand has remained really strong. I wouldn't say that some of the things you see on a national scale you're seeing here." 
There are concrete signs, however, that the once-thriving Texas economy has begun to slow, and some observers say it will suffer the worst of the credit problems and rebound later than the rest of the nation. 
Unemployment in the state, which has a population of more than 20 million, jumped from 3.8% last January to 5.4% in November. The national figure rose from 4.2% to 5.6% in the same period. 
Diane C. Swonk, the chief economist for Bank One Corp., said that when Texas recovers "it won't be the boom state it was in the late 1990s." 
She predicts that the nation will come out of the recession in the first quarter, growing at a 0.6% rate. She expects the economies of Texas, Louisiana, and Oklahoma -- three states tracked by Bank One in its Oil Patch index, where Texas is the dominant economy -- to shrink at an 0.8% rate, and not to emerge from recession until the second quarter. 
However, the recession in Texas "will be more muted, and bouncing out of it will also be more muted" than at the national level, Ms. Swonk said. 
Muted or not, the slowdown is making at least one bank consider putting the brakes on its ambitions in Texas. 
Zions Bancorp of Salt Lake City, a seasoned acquirer of community banks in the West, has long had its sights on entering the Texas market. At an investors conference in December, chief executive Harris H. Simmons pointed out that Zions has branches in five of the top 10 growth markets in the country but is not in the second- and third-fastest-expanding markets: Dallas and San Antonio. 
"I could see us getting into Texas with the right kind of deal," Mr. Simmons said. But, he added, with signs of a slowdown there "we're in no rush." Reached Tuesday, he said that he did not wish to add anything to that statement. 
Increased caution on the part of out-of-state buyers would be big news for independent Texas banks. Of 741 banks and thrifts in the state, 714 have less than $1 billion of assets. And out-of-state banks have been eager to purchase community banks, particularly in the Houston and Dallas-Fort Worth markets. 
In mid-December, for example, Wells Fargo announced plans to buy Tejas Bancshares in Amarillo for $82.5 million. Regions Financial Corp. in Birmingham, Ala., and BOK Financial Corp. in Tulsa, Okla., have bought several small banks, and Bank of Montreal has also expressed interest in Texas. 
Though many of the acquisitions cost less than $1 billion, the deals eventually add up. The percentage of Texas deposits controlled by out-of-state banks leapt from 19.3% on June 30, 2000 to 41.9% by the end of last June. 
Texas is not an insignificant market for larger banking companies either. 
Bank One gets 14% of its deposits from the state, J.P. Morgan Chase & Co. gets 14% and Hibernia National Bank 13%, according to research from Goldman Sachs Group Inc. 
Wells Fargo's Mr. Carlisle said that the one significant change he has seen among commercial borrowers is an increased interest in restructuring their debt to take advantage of lower interest rates. "We're seeing a lot of requests -- certainly something we have to be prepared to do." 
But even a delayed slowdown could deter more banks from pursuing deals in Texas. 
Acquisitions aside, observers say the slowing economy will probably hurt loan volume and credit quality, particularly among small-business and middle-market commercial borrowers. 
Already, larger national banks such as Morgan Chase, FleetBoston Financial Corp., and Bank of New York Co. have said that they expect to take charges for this quarter because of exposure to Houston-based Enron. But it is the future influence of Enron's failure, the pending sale of Compaq Corp., and low profits at Texas-based airlines such as Continental that will hurt loan volume and credit. 
Texas is likely to experience a "more pronounced erosion in commercial middle-market relating to a more-rapid-than-expected slowdown in the economy," said Credit Suisse First Boston bank analyst Rosalind Looby. 
"I don't think we're looking at a meltdown, but this is going to cease to be the real bright spot that it was," she said.

http://www.americanbanker.com 
Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	

FORTUNE Advisor/Investing; Against The Grain
Caught Off Balance Bond sleuths were ahead on Enron. Now they have their sights on three others.
Herb Greenberg

01/21/2002
Fortune Magazine
Time Inc.
116
(Copyright 2002)

If you learn nothing else from the Enron mess, take this lesson to heart: A company's inability to handle its debt can be its downfall-- no matter how much Wall Street likes its stock. Indeed, while earnings may be a window to a company's psyche, the balance sheet is what gives you a truer picture of its well-being. Bond analysts make a beeline to this crucial piece of financial disclosure, paying special attention to a company's ability to service its debt. And when the ratio of cash to debt plunges--watch out! 
The best balance-sheet snoops are often way ahead of the pack in finding signs of trouble. Sometimes, however, the big credit-rating firms, Standard & Poor's and Moody's, which get paid by the companies they rate, are slow off the mark--slower, as a rule, than independent bond-rating services like Egan-Jones of Wynnewood, Pa., or research firms like New York-based Gimme Credit. "We don't have the constraint of trying to keep a company happy," says Egan-Jones President Sean Egan, whose downgrade of Enron to junk beat the big guys by about a month. (To be fair, Moody's is revising how it assesses companies, taking into account additional information that could lead to a default. Standard & Poor's, for its part, argues that its existing methods are adequate.)
Given the scope--and the surprise--of the Enron failure, it's worth asking: Are there other companies out there that these aggressive independent credit-rating agencies are flagging now? You can bet on it. We're not necessarily talking future Enrons, but simply companies whose financial situation is more dire than the market thinks. Certainly one where the alarm bells are ringing loudly (and which--don't remind me--got a positive nod from this column a year ago) is Ford Motor. It's no secret that Ford is having serious problems, but you wouldn't know it from its credit rating, which is still investment grade. Egan-Jones, however, labels it BBB-, a few notches lower than the other rating agencies do and just one step above junk. That's where Egan-Jones thinks Ford will arrive within six months, as the sales boost from the much heralded 0% financing starts to wane and bad auto loans pile up. Junk status raises the cost of borrowing and would be particularly damaging for Ford, whose ability to cover its debt has been deteriorating rapidly. Egan and other bond analysts measure this by calculating a company's interest coverage ratio--pretax income plus interest expense divided by interest expense. 
The ratio, which varies widely by industry, is key to credit analysis. Egan calculates that Ford's interest coverage has tumbled from 2.2 in September 2000 to just above 1 now. "That's akin to saying that nearly everything you earn will have to be used to pay your interest expense, which doesn't leave a lot of money to invest in the business," he says. Ford responds that it's "disappointed" by the Egan-Jones rating; both S&P and Moody's insist they haven't been laggards and that their ratings are appropriate. 
Egan-Jones is even warier of computer maker Hewlett-Packard. Its credit picture is as imperiled as its proposed Compaq merger, according to Egan-Jones--which has already tossed the tech giant's debt on the junk heap with a rating of BB+, several notches below that of the major rating agencies. "It's appropriate to view Hewlett- Packard on a stand-alone basis, which is not particularly attractive," Egan says. "Today it is hard to name any business where it's the undisputed leader--even its printer business is being attacked." Making matters worse: From October 2000, Hewlett- Packard's interest coverage has sunk steadily from 19 to just 6.6. (By contrast, IBM's ratio, according to Egan-Jones, is 11.7.) Hewlett- Packard officials couldn't be reached for comment. 
Finally, there's retailer Gap (another company this column once argued you should never bet against, because of its miracle-working marketing genius of a CEO, Mickey Drexler). While Gimme Credit's Carol Levenson says Gap's balance-sheet condition is not yet critical, it's "not nearly as strong as it used to be." Egan-Jones points out that Gap's interest coverage ratio has plunged from 27.3 down to 8.8 over the past four quarters. As a result, the firm rates the retailer's debt one step above junk and a couple of notches below that of both Standard & Poor's and Moody's ratings. Gap officials say they have never "worked" with Egan-Jones and point to the retailer's standing with the major rating agencies instead. The problem is, as Enron proved, those agencies are not always the first to sound the alarm. 
Herb Greenberg is a senior columnist for TheStreet.com. Questions? Comments? Contact him by e-mail at herb@thestreet.com.

COLOR ILLUSTRATION: TODD LAWSON 
Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	

Analysts' Ratings: Gas Utilities

01/09/2002
Dow Jones Professional Investor Report
(Copyright (c) 2002, Dow Jones & Company, Inc.)

This is a weekly ranking of the stocks within the Gas Utilities industry, based on analysts' recommendations contributed within the past month to First Call's database. To be included on the list, a company must be rated by at least five analysts. 
Also included in the list are First Call analysts' estimates for the companies' current quarters. Estimates are operating income per share based on a survey of analysts.
First Call Consensus Recommendation Scale 
1.0-2.4 = Buy 
2.5-3.4 = Hold 
3.5-5.0 = Sell 
Latest # Analysts First Call # Analysts 
Consensus Covering EPS Estimate Covering 
--------- ---------- ------------ ---------- 
(N: HPG) 1.4 7 ($0.09) 1Q 4 
(N: EQT) 1.8 9 $0.48 4Q 9 
(N: UGI) 2.0 5 $1.25 1Q 1 
(N: GAS) 2.0 7 $0.97 4Q 5 
(N: OKE) 2.2 6 $0.34 4Q 5 
(N: PGL) 2.4 5 $0.95 1Q 2 
(N: NFG) 2.4 7 $0.49 1Q 5 
(N: ATG) 2.4 8 $0.43 1Q 4 
(N: STR) 2.4 9 $0.49 4Q 10 
(N: ATO) 2.7 6 $0.57 1Q 3 
(N: WGL) 2.8 6 $0.78 1Q 4 
(N: TGS) 3.0 5 $0.22 4Q 3 
(N: ENE) 3.1 10 $0.18 4Q 9

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. 	



Sarah Palmer
Internal Communications Manager
Enron Public Relations
(713) 853-9843