All of your concerns are valid, and I too would like to work through them 
with you.  As info, Mike will be over in two weeks.  Organizationally, 
strategically, talent, and back office--we will get there.  Who particularly 
are you worried about.  As far as your situation, let's talk numbers.  I'd 
like you to believe that trading, and management, particularly your 
leadership, will pay off for you.

Later....Jeff



	Chris Mahoney
	01/31/2001 03:02 PM
		 
		 To: Jeffrey A Shankman/HOU/ECT@ECT
		 cc: 
		 Subject: discussion

jeff,
when I came to Houston in late December there were, if you recall,  a number 
of issues that
I had hoped to discuss with you.  We only really scratched the surface with 
the reorganisation
announced today.  I would prioritise them as follows:

1) recruiting, training, and keeping talent.  
there is a lack of depth in the organisation.  to make matters worse most of 
the recruiting was
done by greg whalley and now all of those traders are on expiring or expired 
contracts.  the
fact that all of them on the international side received bonuses less than 
last year doesn't 
help.   also the industry is expansion mode so it is harder to recruit and 
keep talent.  we are
running the risk of getting left with the unhireable and losing the best.

2) vision.  
having worked for enron for three years i realise that the company seeks 
self-starters.  one of
the frustrations that I have in Europe, and is a problem with the group 
overall, is that too many of
the employees are on their heels waiting for direction from above.  that is 
one of the things I was
hoping we might address in a reorganisation that shrunk the business units.  
smaller teams would
be more focused on opportunities to grow the business, communicate better, 
and energise the
environment.   still we need as senior management to discuss in a more 
specific sense where we
need to improve the most.  you have identified customer business, eol, and 
research as the three
key areas.  I would like to discuss with you the priority of being able to 
sell physical fuels.  the easiest
thing to do is get long expensive oil and the hardest thing to do is develop 
a system.  this group has
made almost no progress in developing a physical system.  that is what I will 
be working on in the 
heating, diesel, and jet fuel markets.  I would have thought the greatest and 
first opportunity that we
need to be exploiting is fuel supply to utilities.  btu related shorts, that 
leverage upon our existing gas 
contacts, would seem to be our greatest inherent advantage vs our 
competition.  also it could focus
our fuel oil and middle distillate group on the opportunities between gas and 
liquids.  The relationships
have never been closer and this seems to be a situation that could remain for 
a long time.   the u.s. 
presents more opportunites but we are making good progress in developing 
financial hedging
business in europe with continental gas and I'm pushing the origination 
groups in Europe to look
into the physical supply opportunities.

3) systems.
I'm going to spend sometime with Brent Price tomorrow but my conclusion on 
doing the post-mortem
on Spain is that we need to resource the back office significantly before we 
can significantly grow
the business.  They are struggling to keep up at the moment and the process 
seems very bureaucratic
and inefficient.  This worries me because if you look at the problems that we 
have gotten into in the past
we don't seem to have made great progress in eliminating the probability of 
there reoccurance.

now in terms of the situation with myself.  please put yourself in my shoes 
for a minute.  I have had no
life for the last year sorting out the crap of others (q1 - helsinki/q4 - 
spain).  in the middle part of the year
I had to spend much time addressing the people issues and other problems 
created by the vacumn of 
no managment in London for over a year.  Was able to coordinate a good profit 
on the gasoil books that
was pissed away.  In addition, I have had to take back over the book because 
ross was not capable
of managing the short gamma position that was chopping him up.  the point 
being that managing didn't
pay.   I have to run but these I want to discuss.