Excellent response.  Agree with this approach.  Thanks for the update.  
Please let me know what happens.  SWD


WALT 
ZIMMERMAN        
03/16/2000 07:00 PM

To: Steve Duffy/Houston/Eott@Eott
cc: Dana Gibbs/Houston/Eott@Eott, Lori Maddox/Houston/Eott@Eott, Susan 
Ralph/Houston/Eott@Eott, Michael Burke/Houston/Eott@Eott, Stanley 
Horton/Corp/Enron@Enron, jdegeeter@velaw.com 

Subject: Todoroff Prosecution--CONFIDENTIAL/SUBJECT TO ATTORNEY-CLIENT 
PRIVILEGE  

Steve, as Dana indicated in his response to your message, Louis Dreyfus is 
maintaining that their transactions with Todoroff are totally legitimate and 
binding upon EOTT.  Vinson & Elkins is of the opinion that before we assert 
an argument to Louis Dreyfus regarding the validity of their contract, we 
need to hear the tapes of Todoroff's conversations with Louis Dreyfus.  The 
"paper" that we have (including the notes from the Louis Dreyfus contract 
administrator) certainly indicates that Louis Dreyfus suspected or knew that 
something was not quite right about the December 1999 transaction with 
Todoroff, but it is not enough to make a very good case for challenging the 
validity/enforceability of that contract.  We need more.  John DeGeeter of 
Vinson & Elkins has spoken with Louis Dreyfus'  general counsel.  Louis 
Dreyfus' general counsel has told John that before he will consider providing 
EOTT with the tapes, he wants EOTT to set forth in writing the reason EOTT is 
requesting the tapes.  Louis Dreyfus' general counsel has also indicated that 
he is not sure that Louis Dreyfus taped these conversations.

Although a final decision has not been made, here's where I think we are 
headed with Louis Dreyfus.  We will send their general counsel a letter next 
week indicating the irregularities with this contract (e.g. the prices quoted 
in the contract were far below market, and the contract administrator had 
questions about Todoroff's authorization and the "legality" of the deal).  
This proposed letter would then suggest that Louis Dreyfus provide us with 
their tape recordings of the conversations with Todoroff in order that we can 
immediately resolve our questions as to whether one of Louis Dreyfus' 
employees knowingly assisted Todoroff in his scheme to defraud EOTT.  My 
guess is that a letter of that nature will at least cause Louis Dreyfus'  
lawyers to listen to the tapes.  If the tapes do contain incriminating 
conversations, we might see a softening of their negotiating position.  If 
the tapes do not contain anything incriminating, it would seem to be in Louis 
Dreyfus' best interest to provide us with the tapes to support their position 
that there was nothing irregular about the transaction.



Steve Duffy
03/16/2000 01:47 PM
To: Walt Zimmerman/Houston/Eott@Eott
cc: Dana Gibbs/Houston/Eott@Eott, Lori Maddox/Houston/Eott@Eott, Susan 
Ralph/Houston/Eott@Eott, Michael Burke/Houston/Eott@Eott, Stanley 
Horton/Corp/Enron@Enron 

Subject: Re: Todoroff Prosecution--CONFIDENTIAL/SUBJECT TO ATTORNEY-CLIENT 
PRIVILEGE  

Thanks for the update, Walt.  One option we were considering was a "share the 
pain" settlement with Dreyfus, whereby they would let us buy out of the 
remaining position at a steep discount (to acknowledge their contributory 
negligence in this matter).  Has there been any additional headway in this 
area?  I'm on vacation and haven't heard anything on this.  Weren't we going 
to send a V&E litigator to visit Dreyfus' general counsel? If we commence 
legal proceedings against Dreyfus, things will become costly and contentious 
between us. Information will come slowly and grudgingly.  We have copies of 
some of their internal notes which indicate that they knew---or should have 
known---that something wasn't quite right with Todoroff's situation.  Before 
we start filing discovery motions, we should exhaust the possibility of 
meeting with their general counsel to see if a quick "business" settlement 
can be obtained.  Please advise. Thanks.  SWD


WALT 
ZIMMERMAN        
03/16/2000 11:47 AM

To: Dana Gibbs/Houston/Eott@Eott, Lori Maddox/Houston/Eott@Eott, Susan 
Ralph/Houston/Eott@Eott
cc: Michael Burke/Houston/Eott@Eott, Steve Duffy/Houston/Eott@Eott, Stanley 
Horton/Corp/Enron@Enron 

Subject: Todoroff Prosecution--CONFIDENTIAL/SUBJECT TO ATTORNEY-CLIENT 
PRIVILEGE

Earlier this week, I spoke with Bill Moore (the chief prosecutor in the 
Harris County District Attorney's Special Crimes Unit) regarding the 
above-referenced matter.  Mr. Moore acknowledged receiving the investigative 
materials that we submitted last week, and he indicated that his office is 
commencing its review of those materials.  I emphasized to Mr. Moore the 
desire of EOTT's management to have this case aggressively prosecuted.  Mr. 
Moore acknowledged that the aggressive prosecution of this matter would send 
a strong message to other traders who might consider dishonest acts, and he 
assured me that his office would vigorously pursue this matter.  Based upon 
some statements made by Mr. Moore during our discussion, it was obvious that 
he recalled much of the presentation from our initial meeting.  I will call 
Mr. Moore again tomorrow afternoon to get an update on the progress of this 
matter.

We are also attempting to obtain from Louis Dreyfus tape recordings of 
Todoroff's conversations with them regarding the series of deals that we are 
describing as "The Second Transaction."  If Louis Dreyfus does not 
voluntarily provide us with copies of those tapes (or if they assert that 
tapes do not exist), the next step will be to consider filing a lawsuit or 
seeking a bill of discovery in order to obtain the tapes.  Based upon some 
notes we have received from a contract administrator at Louis Dreyfus, it 
appears that Louis Dreyfus also suspected or knew that something was amiss 
with The Second Transaction.  Assuming that Todoroff's conversations with 
Louis Dreyfus were taped, the tapes should tell us whether Todoroff had a 
conspirator at Louis Dreyfus who assisted him in his scheme to defraud EOTT.

If Louis Dreyfus does not voluntarily produce tape recordings of its 
conversations with Todoroff, we will need some guidance from Enron as to how 
aggressive we should be in attempting to obtain the tapes.