For several months we have been working on an idea to exploit the staff and experience we have in Special Assets to develop a fee-for-service "executive services" business.  The key idea is to participate in potentially rewarding companies and projects without commitment of Enron's investment capital.  I believe that this would be a logical extension in applying the skills and management approach we already are taking with our own portfolio.

As part of some initial feasibility evaluations, we recently have had discussions with Bill Gartland, a Houston entrepreneur, with extensive contacts with national and provincial governmental development agencies in Spain.  Gartland is seeking management and financial expertise to promote industrial, commercial and real estate projects in Spain.  Among other things, he presently lacks the professional skills to evaluate and package projects for presentation to sophisticated capital providers in the United States and Europe.

In addition to checking personal and business references, we had Rick Carson's group perform a due diligence review of Mr. Gartland.  His background and reputation are clean.

Through Gartland's contacts we have been invited to meet with representatives with the Sociedad Estatal de Participaciones Indrustriales (SEPI), the Spanish state-owned holding company for business development.  In addition, we will meet with representatives of Instituto de Fomento (INFO), the regional government of Murcia's business development group.  INFO has agreed to fund all of our incountry expenses while in Murcia on this initial visit.

In order to take advantage of this opportunity we have accelerated our plans to test the market for the types of services we envisage providing and are scheduled to meet with SEPI, INFO and other contacts in Spain the week of June 11th.  

Unfortunately, with the tight schedule we could not arrange a general meeting to cover the concept of Enron Executive Services (EnronExec).   However, we have prepared an informal presentation as a briefing prior to next week's trip.

I would stress the following points:

These initial meetings are informational and relationship focused.  No commitments will be made next week.

One of the key principles of EnronExec is that we are not a source of capital.  Among the services we offer will be analysis of capital needs and preparation of business and/or project plans for presentation to capital providers.

Activities contemplated for EnronExec will complement the normal workload of Special Assets.  There will be no reduction in our efforts to achieve our primary business objectives for the team.

The expenses to evaluate the potential and, if viable, to startup the activity are modest and are consistent with our approved 2001 expense plan.

Our eventual objective to fund EnronExec is to structure cash fees at least sufficient to cover staff time and out-of-pocket costs.  We will look to acquire significant equity participation that would offer the attractive potential value upside.  As a byproduct benefit through contacts with various businesses, we may identify new synergies and opportunities for other Enron businesses.

I am very enthusiastic on EnronExec.  It appears that it may be a way to leverage Enron's unique resources and strengths into a profitable enterprise that does not require separate capital.  I would appreciate your comments and questions.