Tim, my understanding is that partnership fee (the $11.0M) has been amortized 
for the last several years and expensed to the Industrial groups (McConville 
and Ondarza).  As you are aware, I sued them for breach.  The settlement 
involved the elimination of all existing transactions between Ft. James and 
Enron including the Wauna and Halsey power contracts.  It is my understanding 
that the benefit of the elimination of those shorts resides in the Portland 
shop.   The elimination of the shorts would not have occurred without the 
lawsuit on the alliance and the settlement I originated.  It seemed logical 
to charge the Portland office with the remaining un-amortized fee of $1.8M as 
a cost of eliminating the shorts for no cost and no future contingent 
liability.

Lets discuss.

Regards
Delainey
---------------------- Forwarded by David W Delainey/HOU/ECT on 06/16/2000 
07:00 PM ---------------------------
   
	
	
	From:  Tim Belden                           06/16/2000 05:09 PM
	

To: Wes Colwell/HOU/ECT@ECT, David W Delainey/HOU/ECT@ECT, John J 
Lavorato/Corp/Enron
cc: Paula Harris/HOU/ECT@ECT 
Subject: Fort James Amortization

Edith Cross and I looked at the Fort James deal in great detail in early 
1999.  When the deal was closed, west power trading booked an in the money 
position and an offsetting expense of about $11 million.  This money has 
already liquidated from our book.  In fact, I have a copy of the 3/31/97 DPR 
that reflects this liquidation.  At that time, west power trading also paid a 
350k credit reserve, 247k to the finance book, and 1.3 million in 
origination.  

I have also heard about a "partnership" fee that Enron paid to Fort James 
around the same time.  I'm not sure what this fee was and who benefitted from 
it.  It had nothing to do with the west power trading book.

On John's recommendation I called Wes to see if we could figure this out.  
Wes, please give me a call back to discuss.  I think that someone needs to 
look at the actual journal entries from March of 1997 to see why an expense 
of $11 million was deferred.

This is not my problem.  I should not receive this expense.  Until this is 
resolved, I would greatly appreciate it if the writedown of the deferred 
account does not hit west power trading's expenses.