    [Senate Hearing 107-871]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 107-871

     OVERSIGHT OF INVESTMENT BANKS' RESPONSE TO THE LESSONS OF ENRON--VOL.
                                       II
    =======================================================================

                                    HEARING

                                   before the

                    PERMANENT SUBCOMMITTEE OF INVESTIGATIONS

                                     of the

                                  COMMITTEE ON
                              GOVERNMENTAL AFFAIRS
                              UNITED STATES SENATE

                          ONE HUNDRED SEVENTH CONGRESS

                                 SECOND SESSION

                                   __________

                               DECEMBER 11, 2002

                                   __________

          Printed for the use of the Committee on Governmental Affairs

                           U. S. GOVERNMENT PRINTING OFFICE
    86-375                         WASHINGTON : 2003
    ____________________________________________________________________________
    For Sale by the Superintendent of Documents, U.S. Government Printing Office
    Internet: bookstore.gpo.gov  Phone: toll free (866) 512-1800; (202) 512-1800
    Fax: (202) 512-2250 Mail: Stop SSOP, Washington, DC 20402-0001

                       COMMITTEE ON GOVERNMENTAL AFFAIRS

                   JOSEPH I. LIEBERMAN, Connecticut, Chairman
    CARL LEVIN, Michigan                 FRED THOMPSON, Tennessee
    DANIEL K. AKAKA, Hawaii              TED STEVENS, Alaska
    RICHARD J. DURBIN, Illinois          SUSAN M. COLLINS, Maine
    ROBERT G. TORRICELLI, New Jersey     GEORGE V. VOINOVICH, Ohio
    MAX CLELAND, Georgia                 THAD COCHRAN, Mississippi
    THOMAS R. CARPER, Delaware           ROBERT F. BENNETT, Utah
    JEAN CARNAHAN, Missouri              JIM BUNNING, Kentucky
    MARK DAYTON, Minnesota               PETER G. FITZGERALD, Illinois
               Joyce A. Rechtschaffen, Staff Director and Counsel
                  Richard A. Hertling, Minority Staff Director
                         Darla D. Cassell, Chief Clerk

                                     ------

                    PERMANENT SUBCOMMITTEE ON INVESTIGATIONS

                         CARL LEVIN, Michigan, Chairman
    DANIEL K. AKAKA, Hawaii,             SUSAN M. COLLINS, Maine
    RICHARD J. DURBIN, Illinois          TED STEVENS, Alaska
    ROBERT G. TORRICELLI, New Jersey     GEORGE V. VOINOVICH, Ohio
    MAX CLELAND, Georgia                 THAD COCHRAN, Mississippi
    THOMAS R. CARPER, Delaware           ROBERT F. BENNETT, Utah
    JEAN CARNAHAN, Missouri              JIM BUNNING, Kentucky
    MARK DAYTON, Minnesota               PETER G. FITZGERALD, Illinois
             Elise J. Bean, Acting Staff Director and Chief Counsel
                Robert L. Roach, Counsel and Chief Investigator
                     Kim Corthell, Minority Staff Director
                         Mary D. Robertson, Chief Clerk

                                C O N T E N T S

                                     ------
    Opening statements:
                                                                       Page
        Senator Levin................................................     1
        Senator Collins..............................................     7
        Senator Bennett..............................................    10

                                   WITNESSES
                          Wednesday, December 11, 2002

    Charles O. Prince III, Chairman and Chief Executive Officer,
      Citigroup Global Corporate and Investment Bank, New York, New
      York...........................................................    12
    David C. Bushnell, Managing Director, Global Risk Management,
      Citigroup/Salomon Smith Barney, New York, New York.............    15
    Richard Caplan, Managing Director and Co-Head, Credit Derivatives
      Group, Salomon Smith Barney North American Credit/Citigroup,
      New York, New York.............................................    16
    William T. Fox III, Managing Director, Global Power and Energy
      Group, Citibank/Citigroup, New York, New York..................    16
    Michael E. Patterson, Vice Chairman, J.P. Morgan Chase and
      Company, New York, New York....................................    44
    Robert W. Traband, Vice President, J.P. Morgan Chase and Company,
      Houston, Texas, accompanied by Eric N. Peiffer, Vice President,
      J.P. Morgan Chase and Company, New York, New York..............    46
    Andrew T. Feldstein, Managing Director, Co-Head Structured
      Products and Derivatives Marketing, J.P. Morgan Chase and
      Company, New York, New York....................................    49
    Muriel Siebert, President and Chair, Muriel Siebert and Company,
      Inc., New York, New York.......................................    66
    Richard Spillenkothen, Director, Division of Banking Supervision
      and Regulation, The Federal Reserve, Washington, DC............    71
    Douglas W. Roeder, Senior Deputy Comptroller for Large Bank
      Supervision, Office of the Comptroller of the Currency,
      Washington, DC.................................................    73
    Annette Nazareth, Director, Division of Market Regulation, U.S.
      Securities and Exchange Commission, Washington, DC.............    75
    .................................................................

                         Alphabetical List of Witnesses

    Bushnell, David C.:
        Testimony....................................................    15
        Prepared statement...........................................   101
    Caplan, Richard:
        Testimony....................................................    16
        Prepared statement...........................................   103
    Feldstein, Andrew T.:
        Testimony....................................................    49
        Joint prepared statement.....................................   107
    Fox, William T. III:
        Testimony....................................................    16
        Prepared statement...........................................   104
    Nazareth, Annette:
        Testimony....................................................    75
        Prepared statement...........................................   134
    Patterson, Michael E.:
        Testimony....................................................    44
        Prepared statement...........................................   105
    Peiffer, Eric N.:
        Testimony....................................................    46
        Joint prepared statement.....................................   107
    Prince, Charles O. III:
        Testimony....................................................    12
        Prepared statement...........................................    91
    Roeder, Douglas W.:
        Testimony....................................................    73
        Prepared statement...........................................   123
    Siebert, Muriel:
        Testimony....................................................    66
        Prepared statement...........................................   113
    Spillenkothen, Richard:
        Testimony....................................................    71
        Prepared statement...........................................   117
    Traband, Robert W.:
        Testimony....................................................    46
        Joint prepared statement.....................................   107

                                    APPENDIX

    Permanent Subcommittee on Investigations Staff Report on
      ``Fishtail, Bacchus, Sundance, and Slapshot: Four Enron
      Transactions Funded and Facilitated by U.S. Financial
      Institutions,'' December 11, 2002..............................   150

                                    EXHIBITS
                                    VOLUME I

    301. a. Bacchus, The appearance is a sale, chart prepared by the
      Permanent Subcommittee on Investigations.......................   185

         b. Bacchus, The reality is a loan, chart prepared by the
          Permanent Subcommittee on Investigations...................   186

    302. a. Sundance, The appearance is a joint investment, chart
      prepared by the Permanent Subcommittee on Investigations.......   187

         b. Sundance, [The appearance is a joint investment,] The
          reality is a sham investment by Citigroup, chart prepared
          by the Permanent Subcommittee on Investigations............   188

         c. Sundance, The agreement included these provisions, chart
          prepared by the Permanent Subcommittee on Investigations...   189

    303. a. $1 Billion Cash Flow, June 22, 2001, chart prepared by
      the Permanent Subcommittee on Investigations...................   190

         b. $1 Billion Cash Flow, June 22, 2001, chart prepared by
          the Permanent Subcommittee on Investigations...............   191

         c. Flagstaff-Hansen $1.4 Billion, Share Subscription/
          Assumption/Payment Set Off, chart prepared by the Permanent
          Subcommittee on Investigations.............................   192

         d. $1 Billion Cash Flow, June 22, 2001, chart prepared by
          the Permanent Subcommittee on Investigations...............   193

    304. Enron Guarantees Citigroup's ``Equity'' Investment In
      Bacchus, chart prepared by the Permanent Subcommittee on
      Investigations.................................................   194

    Project Fishtail Transaction:

    305. Fishtail deal structure, dated January 21, 2002, prepared by
      Deloitte & Touche..............................................   195

    306. LJM2 Investment Summary for Fishtail, dated December 20,
      2000...........................................................   196

    307. Investment Return Summary for Fishtail prepared by LJM2.....   199

    308. Benefits to Enron Summary, Deal Name: Ampato (Fishtail),
      dated December 20, 2000, prepared by LJM2......................   200

    309. Enron's LJM2 Approval Sheet for Fishtail, dated December 18,
      2000...........................................................   201

    310. Project Fishtail/125 Structure..............................   205

    311. Structuring Summary, Project Grinch, dated December 18,
      2000, prepared by Chase........................................   206

    312. Project Grinch LP, summary memorandum prepared by Chase,
      December 16, 2000..............................................   208

    313. Enron Corporate Development Asset Inventory, Tentative and
      Preliminary, EIM, updated 11/25/01.............................   211

    314. Enron Corp. email, December 2000/January 2001, re: 2000
      Accomplishments, attaching document, Mike Patrick 2000
      Accomplishments................................................   212

    315. Chase fee letter to Enron Corp. signed by both parties,
      December 20, 2000, re: Fishtail (. . . an advisory fee in an
      amount equal to $500,000. . . .)...............................   214

    Project Bacchus Transaction:

    316. Project Bacchus, deal structure chart prepared by Enron Corp   216

    317. Transaction Descriptions: Project Bacchus, Summary and
      Structure Description, prepared by Enron Corp..................   217

    318. Global Loans Approval Memorandum, December 6, 2000, prepared
      by Citibank, re: Project Bacchus...............................   219

    319. Citibank email, April 2001, re: Enron Credit Approval
      ($200mm--Bacchus: SPV where we have a total return swap from
      Enron for $180 mm and verbal support for the balance . . .)....   223

    320. Executive Summary, including Bacchus/Caymus Trust Facility,
      prepared by Citibank...........................................   224

    321. Project Bacchus, 3% Test and Gain Calculation, prepared by
      Enron Corp.....................................................   225

    322. a. Citibank email, November 2000, re: Enron update (Enron's
      motivation in the deal now appears to be writing up the asset
      in question from a basis of about $100MM to as high as $250MM,
      thereby creating earnings.)....................................   226

         b. Citibank email, November 2000, re: Enron update (. . .
          but it will be major appropriateness issue as will the
          first two).................................................   228

         c. Citibank email, November 2000, re: Enron/Bacchus Summary
          (They [Enron] have offered to have the CFO discuss this at
          whatever level of our [Citibank] organization we think
          necessary to obtain the right comfort).....................   229

         d. Citibank email, December 2000, re: ENE/Bacchus Update (It
          is possible, but not certain, that there will be an
          earnings impact. . . .)....................................   232

         e. Citibank email, December 2000, re: ENE/Bacchus (There are
          ``technical'' issues with NetWorks which MAY make Bacchus
          unworkable. . . .).........................................   233

         f. Citibank email, December 2000, re: Enron ([H]owever, the
          $200 million represents 16.3% and 22.4% of operating cash
          flow and net income . . .), attaching estimated Enron
          figures....................................................   234

         g. Citibank email, December 2000, re: Enron (Based on 1999
          numbers would appear that Enron significantly dresses up
          its balance sheet for year end; . . .).....................   237

         h. Citibank email, December 2000, re: Enron/Bacchus (The
          equity component has been approved on the basis of verbal
          support verified by Enron CFO, Andy Fastow.)...............   239

         i. Citibank email, December 2000, re: Enron/Bacchus (Sounds
          like we made a lot of exceptions to our standard policies.
          . . .).....................................................   242

         j. Citibank email, May 2001, re: Bacchus Unwind (. . .
          sufficient for the Trust to prepay the notes in full plus
          break costs.)..............................................   243

    323. Capital Markets Approval Committee, New Project/Complex
      Transaction Description Guidelines, Enron Corp., Project
      Bacchus FAS 125 Transaction, 12/11/00 draft, prepared by
      Citibank.......................................................   244

    324. Arthur Andersen LLC Memorandum, December 2000, re: Fishtail
      LLC Formation/Securitization...................................   246

    325. Arthur Andersen email, November 1999, re: Total Return Swaps   250

    Project Sundance Transaction:

    326. Description of the Sundance Transaction, 10/29/01, prepared
      by Citibank....................................................   253

    327. Capital Markets Approval Committee (CMAC), Minutes to
      Meeting, May 16, 2001, Project Sundance (Enron Corp.), prepared
      by Citibank....................................................   255
    328. a. Chart prepared by Enron Corp., Sundance Steps, Updated
      May 16, 2001, 5pm..............................................   257

         b. Sundance Steps, Updated May 11, 2001, 5:44 pm............   259

         c. Sundance Steps, Updated June 1, 2001.....................   260

    329. Enron Corp. Presentation, Enron Industrial Markets Finance
      Presentation of Sundance Industrial Partners, June 1, 2001.....   261

    330. Enron Corp. Presentation, Enron Industrial Markets--Finance,
      Presentation of Sundance Industrial Partners to Salomon Smith
      Barney, NY, August 2001........................................   264

    331. Enron Corp. Presentation, Enron Industrial Markets--Finance,
      Potential paper mill acquisition presentation to Salomon Smith
      Barney, September 2001.........................................   271

    332. First cut at questions re Sundance, prepared by Citibank....   280

    333. a. Citibank email, April 2001, re: sundance ([T]he argument
      for why it is debt even if we take a partnership interest that
      it is more debt like than equity.).............................   282

         b. Citibank email, May 2001, re: Enron Slapshot Structure...   283

         c. Citibank email, May 2001, re: Materials for CMAC meeting,
          attaching copy of Capital Markets Approval Committee, New
          Project/Complex Transaction Description Guidelines, Enron
          Corp., Project Sundance Transaction, prepared by Citibank..   285

         d. Citibank email, May 2001, re: cmac memo ([P]erwein wanted
          to say that this is a funky deal (accounting-wise.)).......   290

         e. Citibank email, May 2001, re: sundance (. . . is a
          structure that insures, insofar as possible, that it will
          never get drawn.)..........................................   291

         f. Citibank email, May 2001, re: sundance (. . . I do not
          understand why we are proposing to do this transaction.)...   292

         g. Citibank email, May 2001, re: Sundance...................   294

         h. Citibank email, May 2001, re: Treatment for Project
          Sundance, includes a handwritten comment that contingent
          capital commitment cannot be drawn since SBHC will dissolve
          partnership if draws triggers are being approached.).......   295

         i. Citibank email, May 2001, re: Enron/Sundance (Still an
          equity investment of sorts (acctg and tax basis for
          partnership) but is structured in such a way that the 670
          bps is guaranteed or we blow the deal. Also our ``invest''
          is so subordinated and controlled that it is
          ``unimaginable'' how our principal is not returned.).......   296

         j. Citibank email, May 2001, re: Sundance/Firm Investment (.
          . . it does appear that we will need to have approval at
          some point from Mike Carpenter . . .)......................   297

         k. Citibank (Eleanor Wagner) email, May 2001, re: Project
          Sundance, including draft memo for Michael Carpenter,
          expressing Risk Management's Concerns......................   298

         l. Citibank email, May 2001, re: sundance (We do still need
          Barbara Yastine and Mike Carpenter to approve before we
          close?)....................................................   300

        m. Citibank email, May 2001, re: Sundance (Approval sits in
          front of Carpenter waiting for signature.).................   301

         n. Citibank email, May 2001, re: Memo on Enron-Project
          Sundance (We (Bill Fox and I) share Risk's view and if
          anything, feel more strongly that suitability issues and
          related risks when coupled with the returns, make it
          unattractive.), attaching May 2001 Dave Bushnell Memorandum
          to Mike Carpenter..........................................   302

         o. Citibank email, May 2001, re: sundance ([A]ny word? am
          getting a significant amount of pressure from enron to
          execute.)..................................................   305

         p. Citibank email, June 2001, re: Sundance Closing..........   306

         q. Citibank email, June 2001, re: Sundance Approvals (No . .
          . was given a verbal go ahead . . . Understand signed is to
          follow.)...................................................   307

         r. Citibank email, June 2001, re: Sundance (Mike then had a
          conversation with Dave Bushnell, who shared with us Mike's
          feedback.).................................................   308

         s. Citibank email, October 2001, re: Sundance Revenues......   309

         t. Citibank email, October 2001, re: sundance redux,
          attaching Description of the Sundance Transaction..........   310

         u. Citibank email, October 2001, re: Enron Exposure on NA
          Credit Derivs (Note that these equity partnerships, are
          designed to act as debt exposure . . .)....................   313

         v. Citibank email, October 2001, re: ene transactions
          (Sundance . . . allows Enron to manage its paper and pulp
          physical assets and trading business off-balance sheet.)...   315

         w. Citibank email, October 2001, re: sundance (According to
          Enron, our $28.5MM is being held in bank deposits.)........   316

         x. Citibank email, November 2001, re: Sundance Paper (ENE
          wants to ``discuss'' I have not reiterated the imperative
          nature of request, did NOT waive the BoD stick. . . .).....   317

         y. Citibank email, November 2001, re: Enron Sundance--the
          paper trading partnership (Last night we came to terms with
          Enron for the purchase of our interest in the Sundance
          partnership.)..............................................   318

    334. Citibank/SolomonSmithBarney Interoffice Memo, May 2001, re:
      Enron Corp.--Project Sundance (Transactions Overview,
      Description of the Assets, Economics)..........................   319

    335. Accounting for Investments in Limited Partnerships and Other
      Joint Ownership Entities, prepared by Enron Corp...............   324

    336. Arthur Andersen email, August 2000, re: 4 to 1 test.........   334

    Project Slapshot Transaction:

    337. Flagstaff Funding Flows, diagram prepared by Enron Corp.....   347

    338. Transaction Summary, Flagstaff/Enron Transaction, prepared
      by JPMorgan Chase..............................................   348

    339. Slapshot Savings, diagram prepared by Enron Corp............   354

    340. Project Slapshot, Transaction Diagram--@ Closing, June 2001,
      prepared by Enron Corp.........................................   355

    341. Structuring Summary, Flagstaff Capital Corporation, February
      2001, (partial) prepared by JPMorgan Chase.....................   356

    342. Enron Corp. Stadacona, JPMorgan Chase presentation..........   362

    343. Proposal to Enron Industrial Markets, Structured Canadian
      Financing Transaction (Project ``Slapshot''), January 11, 2001,
      JPMorgan Chase presentation....................................   379

    344. Structured Canadian Financing Transaction, Organizational
      Meeting, February 8, 2001, JPMorgan Chase presentation.........   396

    345. Slapshot Transaction Diagram................................   416

    346. Project Slapshot, Transaction Components, June 2001, Enron
      Corp. presentation.............................................   422

    347. J.P. Morgan Securities Inc./Enron Corp. correspondence, June
      2001, re: Tax Comfort Letter--Enron Structured Financing.......   426

    348. J.P. Morgan Securities Inc./Enron Corp. correspondence, June
      2001, re: U.S. Tax Matters--Enron Structured Financing.........   428

    349. 206.(f) Agreement between Flagstaff Capital Corporation and
      Hanson Investments Co., June 2001..............................   431

    350. Credit Agreement between Hansen Investments Co., Flagstaff
      Capitol Corporation and The Chase Manhattan Bank, June 2001....   434

    351. Project Slapshot, Discussion Session, March 2001,
      presentation prepared by JPMorgan Chase........................   514

    352. Tax opinion letter from Blake, Cassels & Graydon LLP to
      Enron Corp., June 2001, re: Canadian Tax Consequences of
      Proposed Financing.............................................   525

    353. Tax opinion letter from Blake, Cassels & Graydon LLP to
      Chase Securities, Inc., November 2000, re: Canadian Tax
      Consequences of Proposed Financing.............................   544

    354. Tax opinion memorandum from Skadden, Arps, Slate, Meagher &
      Flom LLP to Enron Wholesale Services, August 2001, re: Project
      Slapshot.......................................................   565

    355. Project Slapshot Structured Financing Fee Letter (Arranger),
      June 2001......................................................   593

    356. Fee Agreement, between J.P. Morgan Securities Inc. and
      Compagnie Papiers Stadacona, June 2001.........................   596

    357. a. JPMorgan Chase email, February 2001, re: Some Good News
      (Slapshot) (Bruce and Eric run the Slapshot product.)..........   600

         b. JPMorgan Chase email, February 2001, re: Project Slapshot
          (The lawyers have slammed on the brakes until we confirm
          that the net accounting for the twist we're contemplating
          will work.)................................................   601

         c. JPMorgan Chase email, February 2001, re: Slapshot (As
          discussed, the lawyers (especially the tax lawyers) are
          hesitant to state explicitly Chase's intention to set-off .
          . . as they wish to keep the documents as ``arm's length''
          as possible . . .).........................................   607

         d. JPMorgan Chase email, May 2001, re: Wed conf call--
          discussion points, attaching Enron Discussion Points (May
          9, 2001)...................................................   608

         e. JPMorgan Chase emails, February and May 2001, re: Project
          Rio Grande (a.k.a. Flagstaff Capital Corporation)--HEADS UP
          MEMO (Club Bank Target Hold: $60MM . . )...................   611

         f. JPMorgan Chase email, June 2001, re: Flagstaff I.D. #'s
          (The $1.1 billion will be repaid same day.)................   613

         g. Citibank email, June 2001, re: Additional Daylight
          Overdraft Request from Enron (Enron will require additional
          daylight overdraft protection on Friday 6/22/2001 . . .)...   614

         h. JPMorgan Chase email, October 2001, re: Flagstaff
          Syndication Update ([L]ets make sure we lock up Citi and
          Boa on confidentiality agreements, for what they're worth.)   621

         i. JPMorgan Chase email, October 2001, re: Enron Flagstaff
          (The message from Enron to them is ``you have to do
          this.'')...................................................   622

         j. JPMorgan Chase email, November 2001, re: Enron--Flagstaff
          (The papers were signed with a $56.25MM target hold to be
          achieved by 9/30.).........................................   623

         k. Eric Peiffer/JPMorgan Chase email, October 2001, re:
          enron responsibilities (Eric did an outstanding job and
          took on serious responsibilities.).........................   624

    358. Bill W. Brown, Accomplishments for the First Half of 2001...   626

    359. Doug McDowell resume........................................   627

    360. Project Slapshot brief, Project Slapshot Scores!, prepared
      by Enron Corp..................................................   629

    361. Sundance Transaction, Slapshot Financing, prepared by
      Citigroup......................................................   630

    362. Enron Corp. email, December 2000, re: Canadian Financing
      Proposal (. . . it is a similar version of an arrangement that
      Morris and I have independently been developing with our
      Canadian counsel . . .)........................................   632

    363. Enron Corporation Closing Funds Flows for Slapshot, Closing
      Date: Friday, 6/22/00, Final...................................   633

    364. Memorandum prepared by Tim Edgar, Faculty of Law, The
      University of Western Ontario, to the Permanent Subcommittee on
      Investigations, December 9, 2002, re: Canadian Income Tax
      Consequences of Flagstaff/Enron Transaction....................   638

    365. Enron Industrial Markets Finance Presentation of Sundance
      and Slapshot, March 21, 2001, prepared by Enron Corp...........   646

    366. Citicorp/Citibank Credit Approval, Enron Corporation,
      December 2000, indicating ``verbal guarantees'' of Project
      Bacchus ``equity'' (see page Bates #CITI-SPSI 0128921).........   655

    367. Accounting Schedules for Projects Fishtail and Sundance,
      prepared by Enron Corp.........................................   680

    368. Letter from Skadden, Arps, Slate, Meagher & Flom LLP
      (attorneys for Enron Corp.) to the Permanent Subcommittee on
      Investigations, December 10, 2002, regarding status of the
      loans, assets, and entities involved in the Slapshot
      transaction....................................................   684

    369. JPMorgan Chase email, July 1998, attaching copy of Prepay
      pitch presentation.............................................   687

    370. JPMorgan Chase email, March-July 1999, re: Prepaid Forwards
      and Disguised Loans............................................   701

                                   VOLUME II

    371. Enron Net Works Partners: Valuation Analysis of Contributed
      Assets, Chase Securities Inc., November 20, 2000...............     1

    372. Fishtail LLC, Enron Corp. draft document summarizing Project
      Fishtail (undated).............................................    19

    373. Amended and Restated Limited Liability Company Agreement of
      Fishtail LLC, December 19, 2000................................    22

    374. Summary of Project Fishtail, prepared by Deloitte & Touche,
      LLP, for the Powers Report, dated January 21, 2002.............    74

    375. Data Sheet Report, Caymus Trust (c/o Wilmington Trust) as of
      February 22, 2002..............................................   102

    376. Amended and Restated Limited Partnership Agreement of
      Sundance Industrial Partners, L.P., June 1, 2001...............   103

    377. Citibank email, June 2001, re: Apache Opportunity (Any
      feedback from Carpenter on Sundance; apparently the deal
      closed.).......................................................   175

    378. Senior Bank Contacts, document prepared by Enron Corp.......   176

    379. Enron status as of November 26, 2001 in terms of directors,
      officers, stock outstanding, and direct subsidiaries...........   177

    380. Enron Corp. Memorandum, October 1, 2000, re: Accounting
      Enron's Investment in Fishtail LLC.............................   191

    381. Additional documents regarding Project Bacchus:

         a. Enron Corp. Memorandum, December 31, 2000, re: Project
          Bacchus Transaction Memorandum.............................   196

         b. Fishtail Total Costs.....................................   202

         c. Citibank email, October 2000, re: Enron/Project Bacchus
          (Dan sees NO chance that this deal will not go ahead . . .)   203

         d. Citibank email, December 2000, re: Bacchus Equity (As you
          know we are looking for a balance sheet provider for the
          new Enron trade.)..........................................   204

         e. Citibank email, December 2000, re: Enron Bacchus
          (Citibank GRB have agreed to provide a 9-month facility for
          the 194 M and also to take the credit risk on the equity
          portion.)..................................................   205

         f. Citibank fax, December 12, 2000, attaching copy with
          comments of Global Loans Approval Memorandum, December 6,
          2000, re: Project Bacchus (from section on page 3 entitled,
          Enron Corporate Credit Risk: Enron Corp. will essentially
          support the entire facility, whether through a guaranty or
          verbal support.)...........................................   206

         g. Citibank email, December 2000, re: Enron follow-up
          (Having this source of liquidity during this nanosecond is
          important in providing certain legal opinions . . .).......   211

         h. Citibank email, December 2000, re: Enron/Bacchus (. . .
          the RAP treatment should be that the Banking Book will view
          the Certificates as if it made a loan in the face amount of
          the Certificates.).........................................   212

         i. Enron Corp. email, January 2001, re: Fishtail in EIM
          Partners (In talking to Jeff, he does not like the way I
          was proposing that Fishtail went into EIM Ptrs . . .)......   213

         j. Citibank email, February 2001, re: Bacchus (I had an
          Enron question regarding the Enron gty provided for
          Baccus(sp?).)..............................................   214

         k. Citibank email, May 2001, re: phone call with bill brown.   215

         l. Citibank email, November 2001, re: Enron Exposure (For
          Bushnell), attaching Enron exposure table..................   216

    382. Additional documents regarding Project Sundance:

         a. Sundance Earnings (Still Under Negotiation), document
          prepared by Enron Corp.....................................   218

         b. Administrative Agent Fee Calculation, document prepared
          by Enron Corp..............................................   219

         c. Amended and Restated Sundance Limited Partnership
          Agreement, June 1, 2001....................................   220

         d. Final Sundance Numbers, document prepared by Enron Corp..   293

         e. Citibank email, May 2001, re: Sundance (Re fleet: we shd
          approach these guys by saying we are rolling the trs they
          have on bacchus but also adding to it.)....................   295

         f. Citibank email, May 2001, re: Sundance (Thoughts or
          concerns I had as I read the revised Sundance LP
          Agreement:)................................................   296

         g. Citibank email, May 2001, re: sundance (. . . I do not
          understand why we are proposing to do this transaction. . .
          .), attaching copy of First cut at questions re Sundance...   298

         h. Citibank email, May 2001, re: Second Sundance question
          set, attaching copy of Second Set of Sundance Questions....   301

         i. Citibank email, May 2001, re: Sundance Partnership.......   304

         j. Enron email, May 2001, re: Updated Step by Step Sundance
          structure Chart--03/22/01..................................   306

         k. Enron Corp. Presentation, Enron Industrial Markets
          Finance Presentation of Sundance Industrial Partners, June
          1, 2001....................................................   311

    383. Additional documents regarding Project Slapshot:

         a. Flagstaff Capital Corporation, $375,000,000, Senior
          Credit Facility, JPMorgan Confidential Information
          Memorandum, May 2001.......................................   316

         b. Enron Corp. (Morris Clark to Joseph Deffner) email,
          undated, re: Repatriation of Cash from Enron Canada (It
          should be noted that repaying the Preferred Shares within
          the same year as entering into Project Slapshot puts
          pressure on both of the above factors and, as such, puts
          the integrity of the transaction at risk.).................   352

         c. Daishowa Acquisition Structure Steps, charts prepared by
          Enron Corp.................................................   353

         d. JPMorgan Chase email, February 2000, re: Slapshot--Frazer
          Milner Tax Opinion, attaching copy of draft opinion on Re:
          Canadian Structured Finance Proposal.......................   360

         e. Handwritten notes of Enron Corp. re: Project Slapshot....   379

         f. Blake, Cassels & Graydon LLP Memorandum to Enron Corp.,
          January 2001, re: Prepaid Forward Structure................   387

         g. Enron Corp./Blake, Cassels & Graydon LLP email, February
          2001, re: Rider, attaching draft recharacterization rider..   394

         h. Project Slapshot, Canadian Tax Advantaged Financing
          Structure for Project Crane & ECC Operations, March 20,
          2001, Enron Corp. presentation.............................   396

         i. Enron Corp. email, March 2001, re: Requirements for Right
          of Offset accounting.......................................   417

         j. Enron Corp./Blake, Cassels & Graydon LLP email, March
          2001, re: Canadian Guaranty Issue with attached Enron Corp.
          handwritten notes re: Slapshot.............................   418

         k. Blake, Cassels & Graydon LLP Memorandum, March 2001, re:
          Warrant Arrangement........................................   420

         l. JPMorgan Chase email, March 2001, re: enron..............   422

        m. Flagstaff Capital Corporation (Delaware), Assets and
          Liabilities, document produced by JPMorgan Chase...........   423

         n. Enron Corp./Blake, Cassels & Graydon LLP email, April
          2001, re: Comments on drafts of April 12/01, attaching copy
          of April 2001 Blake, Cassels & Graydon LLP Memorandum......   424

         o. Blake, Cassels & Graydon LLP Draft Memorandum, May 2001,
          re: Tax Issues.............................................   428

         p. Enron Corp./Blake, Cassels & Graydon LLP email, May 2001,
          re: Tax Benefit Analysis, attaching draft Tax Benefit
          Analysis...................................................   432

         q. Handwritten notes of Enron Corp., May 2001, re: Slapshot.   435

         r. Enron Corp. email, May 2001, re: Journal Entries ([H]ere
          are accounting entries for the slapshot transaction.),
          attaching copy of Slapshot-Initial Purchase; Slapshot--Year
          1-5 Balance Sheet; and Slapshot-Year 5 End Unwind..........   436

         s. Enron Corp. Memorandum, May 2001, re: Project Slapshot--
          Step-by-Step Description...................................   440

         t. Handwritten notes of Enron Corp., June 2001, re: Slapshot   443

         u. Enron Corp./Blake, Cassels & Graydon LLP email, June
          2001, re: Blakes Second Set-off Opinion re: Hansen-
          Flagstaff, attaching Blake, Cassels & Graydon LLP
          correspondence concerning Project Slapshot.................   449

         v. Flagstaff Capital Corporation, Commitment Allocations as
          of September 24, 2001......................................   453

         w. Blake, Cassels & Graydon LLP invoice for services
          rendered for the period ended June 21, 2001, re: Project
          Slapshot...................................................   454

         x. Enron Corp. Memorandum, October 2001, re: Campagnie
          Papiers Stadacona..........................................   456

         y. Vinson & Elkins invoice for services posted through June
          27, 2001, re: Project Slapshot-Enron $400,000,000
          Structured Financing.......................................   458

         z. Project Dasher, Preliminary Tax Disposition Structures To
          Maintain Project Slapshot, August 31, 2001, prepared by
          Enron Corp.................................................   459

        aa. Enron Corp. email, December 2001, re: Slapshot (. . .
          doug, pls call me asap since you are the most
          knowledgeable.)............................................   463

        bb. Handwritten notes of Enron Corp., December 2001, re:
          Slapshot/CPS restructuring with attached copy of Enron
          Corp. Memorandum, December 2001, re: Proposed Sale of
          Stadacona Mill--Restructuring Steps........................   464

         cc. Blake, Cassels & Graydon LLP Memorandum, December 2001,
          re: Slapshot Restructuring/CPS Sale........................   468

        dd. Enron Corp. facsimile to Jeff McMahon, December 2001, re:
          Stadacona (Project Slapshot)...............................   481

        ee. Blake, Cassels & Graydon LLP Memorandum, January 2002,
          re: Slapshot Structure, Current Status Issues and Proposed
          Transactions...............................................   489

         ff. JPMorgan Chase email, January 2002, re: Flagstaff
          Commitment and Fee Letter (Given the sensitivity to the
          Enron name and this transaction in particular, I would
          suggest writing this up as an exception.)..................   494

        gg. Enron Corp. Memorandum, November 2002, re: Project
          Slapshot--Quarterly Payments...............................   495

        hh. Patton Boggs LLP correspondence, on behalf of JPMorgan
          Chase, to the Permanent Subcommittee on Investigations,
          December 2002, re: structuring fees paid to JPMC...........   497

         ii. Canadian Financing Strategy, A Presentation to Enron
          Corp., September 2000, National Australia Group............   498

         jj. Additional Points, JPMorgan Chase document regarding
          Project Slapshot...........................................   510

        kk. Daishowa Acquisition Structure Steps, Enron document
          regarding Project Slapshot.................................   511

    384. Documents regarding Project Crane and Project Boomerang:

         a. Enron Corp. email, December 2000, re: Project Crane--
          Status Updated and Next Steps (I would to inform everyone
          that yesterday we had a meeting with Jeff Skilling to
          present Project Crane . . .)...............................   514

         b. Enron Corp. email, December 2000, re: Skilling
          presentation on EIM Pulp and Paper Market Making Strategy..   515

         c. Enron Risk Assessment and Control Deal Approval Sheet,
          December 2000, re: Project Crane...........................   535

         d. Project Crane, Steps to Acquire SAT and DFPL and Post-
          Acquisition Undertakings, draft of presentation............   542

         e. Project Boomerang, Transaction Overview, prepared by
          JPMorgan Chase.............................................   548

         f. JPMorgan Chase email, November 2000, re: Project
          Boomerang (I think what we would like to try to do is
          define fair market value in such a way that it always turns
          out to be equal to the value at which the SPE purchased the
          business.).................................................   551

    385. Additional documents relating to FAS 125/140 Transactions:

         a. FASB Statement No. 125, Enron Corp. presentation.........   553

         b. Update on FASB 140, Transfers of Financial Assets &
          Extinguishment of Liabilities, June 2001, Enron Corp.
          presentation,..............................................   571

         c. Andersen email, November 1999, re: Total Return Swaps....   584

         d. Enron Corp./Andersen email, September 2001, re:
          Background of Project Hawaii 125-O.........................   587

         e. Enron Corp. Memorandum, December 2001, re: Hawaii
          Structure Summary..........................................   590

         f. Enron Corp., Pre-Tax Earnings Analysis of SFAS 140's
          1998-2001..................................................   593

         g. Enron Corp. email, May 2001, re: Offshore Double Lease
          Accounting Treatment.......................................   594

    386. Documents relating to transactions involving Canadian
      Imperial Bank of Commerce (CIBC) and Enron Corp., November,
      2002...........................................................   598

    387. Additional documents regarding Enron Corp. structured
      finance deals generally:

         a. Global Finance: Funding Vehicles, May 2000, Enron Corp.
          presentation...............................................   613

         b. Funds Flow Vehicles, Enron Corp. document................   621

         c. Structured Finance Vehicle, August 24, 2001, Enron Corp.
          presentation...............................................   629

         d. Enron Corp., Structured Transactions Group Overview, June
          2001.......................................................   652

         e. Enron Structured Finance List As of 11/16/2001...........   659

    388. Documents regarding Enron Bank Reviews:

         a. Enron Corp. email, July 2000, re: Bank relationship
          review.....................................................   686

         b. Debt Investor Relationship Review, January 2001, Enron
          Corp. presentation.........................................   689

    389. Documents regarding Enron Asset Valuations:

         a. Whitewing Presentation, August 14, 2001, prepared by
          Enron Corp.................................................   741

         b. Enron Global Assets and Services, Equity Value Schedule,
          $(Millions), As of June 2001...............................   753

         c. Enron Global Assets & Services, Significant Exposures
          (InUS$MM's),...............................................   754

    390. Additional documents regarding Enron Prepay Transactions:

         a. Correspondence between Citigroup and the Permanent
          Subcommittee on Investigations, July 2002-January 2003,
          regarding Delta Energy Corporation.........................   755

         b. Correspondence between JPMorgan Chase and the Permanent
          Subcommittee on Investigations, July 2002-January 2003,
          regarding Mahonia, Ltd.....................................   812

         c. Summary of Proposed Transaction Approval Process (TAP)
          Policy Revisions, undated, from the ``H'' drive of the
          computer of Enron Corp. employee Rick Carson...............   952

         d. Proposed Gas Storage Monetization Structure, undated,
          from the ``H'' drive of the computer of Enron Corp.
          employee Michael Garberding................................   953

         e. Enron Corp. email, December 2000, re: New Prepay with
          Chase (In the prior transactions, we have received a
          prepayment from Mahonia on a forward delivery schedule of
          fixed volumes.)............................................   959

         f. Enron Corp./JPMorgan Chase email, September 2001, re: Rep
          Letter for Mahonia, attaching draft Mahonia representation
          letter.....................................................   960

         g. Enron Corp. email, June 2001, re: Sample Swap Co Letter
          (I am still trying to track down the original ``Delta/
          Mahonia'' Letter. Everyone seems to have shredded their
          files, which is a little disturbing.)......................   962

         h. Enron Corp. email, November 2001, re: Steps for $250mm
          Swap Assumption............................................   963

         i. Enron Corp. email, September 2001, re: New Confirm.......   967

         j. Enron Corp. email, July 2001, re: Citibank/Delta Prepay
          (. . . the auditors would like to verify that the MMBtus
          involved in the trade are not inconsistent with normal
          trades that run through the financial book for gas.).......   972

         k. Enron Corp. email, September 2001, re: Revised Pre Pay
          docs (This tracks language that is in the Guaranty and does
          not name Chase.)...........................................   973

         l. Enron Corp. email, October 2001, re: Comments on Prepaid
          Swaps......................................................   975

        m. Enron Corp. email, September 2001, re: Mahonia Confirm....   990

         n. Enron Corp./JPMorgan Chase email, September 2001, re:
          Mahonia Limited............................................   998

         o. Enron Corp. email, November 2000, re: Sale treatment for
          Prepayments with subsequent participation to an investor...  1001

         p. Enron Corp. email, September 2001, re: Chase Prepay......  1003

         q. Enron Corp. email, November 2000, re: Prepay (Andy,
          Michael asked me to forward this structure to you in
          advance of his call.)......................................  1004

         r. Enron Prepaid Oil Swap:..................................  1005

    391. Supplemental questions and answers for the record of
      Citibank, regarding December 11, 2002, hearing, dated February
      27, 2003.......................................................  1006

    392. Correspondence from the Board of Governors of the Federal
      Reserve System, Office of the Comptroller of the Currency,
      Securities and Exchange Commission, to the Permanent
      Subcommittee on Investigations, regarding followup to questions
      posed in the Subcommittee's December 11th hearing and
      recommendations included in the Subcommittee report entitled
      Fishtail, Bacchus, Sundance, and Slapshot, Four Enron
      Transactions Funded and Facilitated by U.S. Financial
      Institutions...................................................  1008

                         EXHIBITS (CONTINUED)--VOL. II

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