I was unaware that this was on the table for discussion in World Hunger. 

My recollection is that Mike Barnas proposed the changes to 20.2 (b), which 
addresses indemnity for fines and penalties (who can forget the cognizant 
government?).  We agreed to narrow GE's exposure by specifically relating the 
indemnity obligation to a violation of section 3.8, as opposed to the broader 
provision in prior contracts.



From: Scott Dieball@ENRON_DEVELOPMENT on 05/21/2001 09:10 AM
To: Kay Mann/Corp/Enron@ENRON
cc: Bill Williams/PDX/ECT@ECT, John G 
Rigby/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, John 
Schwartzenburg/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, pthompson@akllp.com, 
Roseann Engeldorf/Enron@EnronXGate@ENRON, Sheila Tweed/HOU/ECT@ECT 

Subject: Re: Arcos- World Hunger- LOL fines carve out.  

Steve knows I am pissed about this and in our Arcos meeting I brought up the 
same point raised by Kay below.  Steve claims that the no cap on gov. 
violations was rejected some time ago by GE mana. when Barnas presented to 
them an update of the "end world hunger".  Steve also thinks that they had 
told us previously about this change.  ( Is this true???)  I told him it was 
news to me and that I would have thought that if true, then GE would have (a) 
highlighted the changes on the draft contract and/or (b) added it to the list 
of outstanding issues.

When asked to explain the rationale for changing their position on this 
issue, Steve was unable to give an answer other than to say GE mana. had said 
that they needed to cap their liability at the contract price for gov. 
violations although they thought GE could live with no cap on FCPA violations.





	Kay Mann@ENRON
	05/18/2001 01:14 PM
		
		 To: John G Rigby/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
		 cc: Sheila Tweed/HOU/ECT@ECT@ENRON_DEVELOPMENT, 
pthompson@akllp.com@ENRON_DEVELOPMENT, Roseann Engeldorf/Enron@EnronXGate, 
Scott Dieball/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Bill 
Williams/PDX/ECT@ECT@ENRON_DEVELOPMENT, John 
Schwartzenburg/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
		 Subject: Re: Arcos- World Hunger- LOL fines carve out.

Did Steve S ask that it be added to the list?  I would let them bring it up 
if he didn't.  We spent quite a bit of time and effort on the LOL clause, and 
it was subject to lots of give and take.

Kay



John G Rigby@ENRON_DEVELOPMENT
05/18/2001 07:03 AM
To: Sheila Tweed/HOU/ECT@ECT, Kay Mann/Corp/Enron@ENRON, pthompson@akllp.com, 
Roseann Engeldorf/Corp/Enron@ENRON
cc: Scott Dieball/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Bill 
Williams/PDX/ECT@ECT, John Schwartzenburg/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT 

Subject: Arcos- World Hunger- LOL fines carve out.

GE has informed us during the Arcos discussion that GE senior management has 
directed that the GE deal team cannot agree to allowing GE indemnity 
obligations related with government fines for failure to comply with law to 
be exclude from the limit of liability.  


This needs to be added to Pete T's World Hunger Punchlist of issues.

Enron Arcos deal team has not agreed to GE's position.