Message-ID: <31769948.1075853238051.JavaMail.evans@thyme> Date: Thu, 3 May 2001 13:28:00 -0700 (PDT) From: mmolland@brobeck.com To: richard.b.sanders@enron.com, gfergus@brobeck.com Subject: Meeting with Senator Dunn Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: "Molland, Michael E." X-To: "'Richard.B.Sanders@enron.com'" , "Fergus, Gary S." X-cc: X-bcc: X-Folder: \Richard_Sanders_Oct2001\Notes Folders\Iso_ pricecaps X-Origin: Sanders-R X-FileName: rsanders.nsf Senators Dunn and Bower and their staffs met with representatives of Mirant, Wiiliams, Duke, Reliant, and Dynegy- and me- for over two hours at the State Capital yesterday. I will report fully on the meeting by telephone tomorrow morning, however, this report summarizes the principal issues covered in the session. Dunn spent about a half hour describing the scope of his sub-committee's investigation. He styled it as an investigation into whether anti-competitive behavior has occurred or is occurring in the California wholesale market. If they find that it has, they will recommend curative legislation. If they find the behavior was criminal they will refer evidence to the AG. Dun vowed that he would not allow parties adverse to the generators to participate in this investigation. At the same time he is inviting other county and state lawyers to help him- the first volunteer is the San Joaquin District Attorney. He said there was no predetermined conclusion and he would allow the generators to explain the "suspicious" facts. He said the investigation would be fair and that if there was a leak of information we should "let him know". He had two initial requests- first, he wants immediate production of Enron's document retention (he actually called it document destruction) policy. We are to let him know by Wednesday if we will produce the current version. Second, he wants the parties to stipulate to an order pledging that each will not destroy documents. He says he will go to court to get such an order if we refuse. The rest of the meeting was spent negotiating a confidentiality order. The generators had earlier sent sub-committee special counsel, Larry Drivan, a discussion draft of such an order. Dunn and Drivan discussed it point by point. At the onset Drivan acknowledged Enron had not seen the draft and said nothing said at the meeting would bind Enron to any position about it. The generators and Dunn seemed to agree on many of the principal points- e.g. they would in fact consent to such an order; the subcommittee could contest claims of confidentiality; the subcommittee could require the logging of privileged documents and the assertion of privilege could be challenged in court; they would all initiate a procedure for a court to sign such an order and preside over discovery disputes. Surprisingly, most generators did not object when Dunn suggested Sacramento Superior Court as the proper venue-although there was no final agreement on this. The dispute between the committee and the generators was primarily over who could view "confidential" documents. The generators wanted NDA's signed by all staff, as well as all consultants and experts. Dunn refused. Last week the subcommittee subpoenaed the ISO for documents that pertain to ISO conclusions of market manipulation. The ISO has refused to allow the generators or Enron see the documents they will produce. The generators have discussed seeking a protective order- venue uncertain- but Dunn (and most of the generators) seemed to believe the stipulated confidentiality order under discussion would solve the problem of ISO production. Duke asked Dunn to delay the production date for ISO for a few days until they can work out the terms of the confidentiality order. Duke (per Kleinman) is in charge of drafting the order. Kleinman said he would get a draft to Dunn early next week. Dunn said he had no objection if the generators got documents from ISO. He asked that the generators call ISO directly and see if ISO would give the documents to them. Several generators said they would do that. The meeting was maintained at a very professional level. Dunn's approach was one of a class action lawyer in a roomful of big corporate defendants- urging everyone to get along because as "professionals" everyone knew how the game gets played. However, he is seriously understaffed. He has few resources for litigation- nor has he resources to review the millions of documents he has requested. He must be relying on either outside experts- or outside allies- to do that. Given that, it is hard to see how a confidentiality order could be enforced against him, regardless of what he staff discloses. Further,` if he uses outside experts to do who are not bound by the order they will likely go to work against us later with the information. The generators already have made considerable productions to the AG and they may be less troubled by this. They certainly seemed willing to play ball at the meeting- although privately they may have other plans which they did not air with Dunn. We should talk to them about that. ======================================================= This email message is for the sole use of the intended recipient(s) and may contain confidential and privileged information. Any unauthorized review, use, disclosure or distribution is prohibited. If you are not the intended recipient, please contact the sender by reply email and destroy all copies of the original message. To reply to our email administrator directly, send an email to postmaster@brobeck.com BROBECK PHLEGER & HARRISON LLP http://www.brobeck.com