Enron Mail

Date:Mon, 5 Nov 2001 09:04:04 -0800 (PST)

Good to hear your voice this morn. As I said, I have intentionally avoiding bothering you guys until I had something to contribute.
The info that follows is probably more than you want. But I gave Paul your (almost) complete history and I think you should know his.
First met in mid-fifties when I was at Dallas Fed and assigned for two weeks to NYFed to learn firsthand about open market operations on the trading desk, where Paul worked. (I was an "Associate Economist" with FOMC and advised Dallas Fed President on policy and I accompanied him to those super-secret meetings.)
Paul and I hit it off and when I left Treasury in 1961 Dillon let Bob Roosa bring Paul in to take over my duties. By then I was with ABA in New York and Paul and I became friends during my frequent work with the Dillon Treasury and with Roosa.
Paul left Treasury in about the mid-sixties to become VP of planning at Chase. In late 1968, when David Kennedy asked me to be his number two, I said yes on two conditions: That I get a car for both business and personal use (okay) and that he bring in Volcker as under secretary for monetary affairs and that latter report directly to him, not through me (as had been Dillon's system). He said okay if we could get Paul. Upon which I went to Chase and, given the stipulations about reporting, he agreed to come.
He hit it off great with DK's successors, Connally and then Shultz, and left in '74 (I think) to be pres of NYFed. Markets in effect forced Carter to appoint Paul to head Fed in 1979, where he led the System into breaking the back of double-digit inflation (plus sharp but relatively short recessioin).
I think he went with Wolfensohn from there and made a ton of money. After W left Paul took over and later sold out to Bankers Trust.
Although Paul is an independent (traditonal at NYFed), he is very public-minded and also somewht left-of-center on public policy. One of my many sins in eyes of Nixon's White House gang is the true belief that I put something over on them in getting Paul to join us. Paul was for many years a member of ACCF board as favor to me but finally resigned over our estate-tax position last year (and never did like our capital gains positions). He and Pug may be considered soulmates on some of these issues, especially estate tax.
In our initial conversation this morning, Paul asked me if Skilling's resignation related to recent problems. I said I did not know but did not think so.
Paul is teaching at Princeton and looking for ways to give away his money, which he seems embarrassed to have. His wife, who had chronic health problems, died a couple of years ago. I think one of the children had health problems too.
In our second conversation today I told Paul that I was convinced that Enron was (mentioned innovation awards) and still is a great company. I strongly urged him to accept a relationship that would show his confidence and also advance your efforts.
Good luck. Call or e-mail me if you have any questions or if there is anything else you want me to do.