Re: Corp allocations $485,000 plan 2001 v 152,000 plan 2000

Greg - Mark is correct that Terry no longer controls these budgets, this is a
carry-over from last year that we'll need to get corrected. The majority of
the difference between the allocations for 2000 and 2001 is for the
Environmental Health & Safety group under Mike Terraso. Mike is out of the
office this week, but I'll follow up with his direct reports to get a
description of the allocation for each of their cost centers.

As the Project Finance allocation is flat from year to year, I'm guessing
that it isn't the issue you're most concerned about. Please let me know if
this is not the case.

I'll be forwarding more information to you shortly, as I receive it.

Regards,
Elizabeth Linnell
----- Forwarded by Elizabeth Linnell/NA/Enron on 10/20/2000 08:33 AM -----

Mark Schroeder@ECT
10/20/2000 04:35 AM

To: Greg McMahon/LON/ECT@ECT
cc: Nilesh Vegad/LON/ECT@ECT, Stephen Wood/LON/ECT@ECT, Beth
Apollo/LON/ECT@ECT, Elizabeth Linnell/NA/Enron@Enron, Steven J
Kean/NA/Enron@Enron
Subject: Re: Corp allocations $485,000 plan 2001 v 152,000 plan 2000

I am quite sure that there are several errors here.

First, Terry Thorn no longer has any responsibility, as far as I know, for
environemtal compliance or policy. He now works for Rick Bergsieker, in the
Middle East, on LNG issues. You might check the source of your info. In any
event, there is nothing that Terry has done in the past, as evidenced by 1999
Budget, that would be attributable to Enron Europe. This applies to the
entires of 117 and 103k.

I am familiar with the work of Mike Terraso's group. While he is a member of
the larger Enron Corp. Public Affaris function, it would be inaccurate to
attribute his work to my group, which would then be reallocated out to
commerical units. I believe it is both fairer, and more accurate, to
attribute this expense to Brian Stanley's asset management function, for whom
most of Mike's ES&H compliance and policy work is done, including technical
analysis of regulations affecting those assets. This applies to the entries
of 140 and 6k.

Finally, the project finance activity is also probably no longer under Terry,
but largely arises from the work of John Hardy's team in Washington DC. This
would relate to work done on Trakya payment issues, and some lobbying of
multi-latteral lending institutions, regarding their financing activities in
emerging (Eastern Europe) markets. The amount does not seem inordinate,
though it might be interesting to see what percentage of someone's time this
represents, as I do not think we take much of John's team's time. For
accuracy, rather than allocating tome, then smearing/reallocating back out to
multiple commercial units, it would be more accurate to attribute this
directly to Eric Shaw's cost/profit centre, since that is the only business
group within Enron Europe being supproted by/affected by John Hardy's efforts.

thanks mcs

Greg McMahon
18/10/2000 10:27
To: Mark Schroeder/LON/ECT@ECT
cc: Nilesh Vegad/LON/ECT@ECT, Stephen Wood/LON/ECT@ECT

Subject: Corp allocations $485,000 plan 2001 v 152,000 plan 2000

Mark,

Can you review the following please.

We have received the following charges from Corp as Corporate Allocations for
the 2001 Budget.
It amounts to $485,000 against a 2000 budget figure of $152,000.

Can you advise if these charges reasonable. I am not sure if they would have
approached you when preparing the amounts they were passing on.
We can query or ask for more information before accepting these charges if
you wish.

Please see below

thanks
Greg