Enron Mail

From:jeff.skilling@enron.com
To:sherri.sera@enron.com
Subject:Re: INVESTIGATION OF CORRUPTION IN THE TURKISH ENERGY SECTOR -
Cc:
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Date:Wed, 31 Jan 2001 09:17:00 -0800 (PST)

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---------------------- Forwarded by Jeff Skilling/Corp/Enron on 01/31/2001=
=20
05:19 PM ---------------------------


James Derrick
01/31/2001 03:52 PM
To: John Sherriff/LON/ECT@ECT
cc: Jeff Skilling/Corp/Enron@ENRON, Rob Walls/NA/Enron@Enron, "Dilg, Joe"=
=20
<jdilg@velaw.com<=20

Subject: Re: INVESTIGATION OF CORRUPTION IN THE TURKISH ENERGY SECTOR -=20
PRIVATE & CONFIDENTIAL =20

John, thank you for the report. I have asked Joe Dilg of Vinson & Elkins (w=
ho=20
has been involved in all of our investigations relating to potential FCPA=
=20
issues) and Rob Walls to look into this matter. Jim



John Sherriff@ECT
01/31/2001 08:38 AM
To: Ken Lay and Jeff Skilling@Enron, Steven J Kean/NA/Enron@Enron, Mark=20
Frevert/NA/Enron@Enron, Greg Whalley/HOU/ECT, Mark Palmer/Corp/Enron@ENRON,=
=20
James Derrick/Corp/Enron@ENRON
cc: Eric Shaw/LON/ECT@ECT, Michael R Brown/LON/ECT, Brian=20
Stanley/EU/Enron@ENRON, Jackie Gentle/LON/ECT@ECT, Richard Lewis/LON/ECT@EC=
T,=20
Joe Gold/LON/ECT@ECT, Mark Evans/Legal/LON/ECT@ECT, Lloyd=20
Wantschek/LON/ECT@ECT=20

Subject: INVESTIGATION OF CORRUPTION IN THE TURKISH ENERGY SECTOR - PRIVATE=
&=20
CONFIDENTIAL


=09


Eric Shaw's team has learned that an investigation has been initiated by th=
e=20
Turkish military to expose and eliminate corruption in the Turkish energy=
=20
sector.

On January 6, the military took seven energy sector bureaucrats into custod=
y.=20
In the following days, other officials from TEA? (the electricity generatio=
n=20
monopoly) and the Ministry of Energy and Natural Resources (MENR) and=20
executives from a number of Turkish companies were also taken into custody.=
=20

While many of the bureaucrats and executives have been released, a leaked=
=20
report from the military investigators suggests that the operation is wide=
=20
ranging and may ultimately target the Minister of Energy and Natural=20
Resources and other senior energy sector bureaucrats and businessmen.=20

Enron Implications

Trakya - One Turkish newspaper has reported that Enron=01,s 478 MW Trakya =
power=20
project was being investigated. This has not been reported anywhere else. =
=20
Because the power price at Trakya has been the target of criticism in the=
=20
past, we are not surprised by this report. Although an investigation is=20
always a possibility, other than the one newspaper report, there has been n=
o=20
indication, official or otherwise, that an investigation is planned or=20
underway.
=20
GAMA - It has also been reported that the wife of Gorkhan Yardim, the Gener=
al=20
Manager of BOTA? (the natural gas monopoly), works at GAMA, our Turkish=20
partner in the Trakya project, and that his expensive car was a gift from=
=20
GAMA. GAMA has told us, and Yardim has defended himself publicly by saying,=
=20
that his wife has been working at GAMA since 1993, long before Yardim had=
=20
risen to his current position of power at BOTA?, and that the car was not a=
=20
gift from GAMA. It is worth noting, however, that there have been a number =
of=20
newspaper reports questioning GAMA=01,s role in a controversial gas marketi=
ng=20
deal being undertaken by their TurRusGas joint venture with Gazprom and BOT=
A?.

Outlook

It is still not clear how or when this investigation will end. In the mediu=
m=20
and long term, this will be good news for Enron and other reputable Turkish=
=20
or foreign companies which have found it difficult to do transparent energy=
=20
deals in Turkey in the past. In the short term, however, it is likely to=20
result in a marked decrease in meaningful activity in the Turkish energy=20
sector, as worried bureaucrats, innocent and guilty, lay low.=20

We will continue to monitor developments, especially with regard to the=20
Trakya project, and report as necessary.