Subject: RE: Tom McQuade's Deposition
From: [email-masked]
To: [email-masked], [email-masked]
Cc: [email-masked], [email-masked]
Date: Mon, 9 Jul 2001 12:33:44 -0700 (PDT)

I don't think the depo did any real damage. In any event, it's a good time for an update. 
	My assistant has set a tentative meeting for Wednesday at 3:30 pm.  We will confirm with Greg Markel and George and keep you posted.  In the meantime, please call with any questions.  Thanks. 

-----Original Message-----
From: Shankman, Jeffrey A. 
Sent: Monday, July 09, 2001 8:22 AM
To: Brownfeld, Gail; Mcclellan, George
Cc: Sanders, Richard B.; Burns, Jennifer
Subject: RE: Tom McQuade's Deposition

Gail, what is your take on McQuade's depo.  I'd like an update ASAP and will make time. This email below concerns me a great deal.   Please get on my calendar.  

Jeff

-----Original Message-----
From: Brownfeld, Gail 
Sent: Friday, July 06, 2001 4:43 PM
To: Mcclellan, George; Shankman, Jeffrey A.
Cc: Sanders, Richard B.
Subject: FW: Tom McQuade's Deposition

	FYI.  Please call with any questions.  I am trying to set up a call with our outside counsel early next week.  After we talk with them, I'd like to visit with Jeff (if he's available) and fill him in on the events of the last couple of weeks and answer any questions.  

-----Original Message-----
From: Johnson, Christopher P. [mailto:[email-masked]]
Sent: Wednesday, July 04, 2001 1:19 PM
To: Markel, Gregory A.
Cc: Brownfeld, Gail; Zeisler, Aaron M.
Subject: Tom McQuade's Deposition

Greg:

Tom McQuade's deposition was an adventure.  I spent all day Monday prepping
him and I could not get him to say a word.  When I asked him about the
issues re Massey, he said he remembers talking to Massey, but he didn't
discuss buying 3/4" coal from Massey; McQuade said that his focus was on
selling the 3/4" synfuel output and that Matt Arnold must have had the
discussions with Massey re buying 3/4" coal.  Massey had an internal memo
saying that McQuade referenced a need for a 3/4" top size because of
Sempra's PLR, but McQuade said steadfastly that he knew nothing about the
PLR, never discussed 3/4" in the context of coal (as opposed to synfuel),
and said that Matt must have had those discussions.  In short, based on the
fact that McQuade wouldn't talk to me, I figured this depo would be a
breeze.

When we got to the depo, however, McQuade became "Chatty Cathy."  He had the
opportunity to take use one word answers, but he routinely felt a need to
expound.  For the most part, it didn't matter, because Jonathan Siegel was
taking the depo and was getting nowhere.  I kept reminding McQuade during
breaks to answer and shut up, and he kept acknowledging that that was what
he would do.  Once we resumed the depo, however, he kept falling back into
his habit of saying too much.  In the afternoon, I cut him off at points:
"You've answered that question.  Now wait for the next one."

More importantly, McQuade's testimony regarding Massey began to sound
evasive to me.  He was looking back and forth at the internal Massey
correspondence as if a light had gone off in his head, but was still saying
that he didn't discuss purchasing coal.  The Massey stuff is not a big issue
in the case, and I started fearing that McQuade's testimony would make it
one -- e.g., they read in the Massey depo, read parts of McQuade and then
say that McQuade lied about it.  McQuade had one other big screw-up: after
testifying all morning that there is no standard distribution within 2x0
coal, McQuade said near the end of the day that he told someone in Enron in
November that 2x0 has 30-35% 2x3/4 coal.

During a break late in the afternoon, I asked McQuade what happened with the
Massey testimony.  He said that, after seeing again the internal Massey memo
(written by a guy McQuade knows and trusts) saying that McQuade referenced a
PLR and a 3/4" top size, he began to believe that he MUST have said that to
the Massey guy.  I asked McQuade what he recalled about it.  He said that he
really didn't recall anything other than that he might have referenced size.
He still didn't think he referenced a PLR.  He then told me that the meeting
referenced in the memo was a dinner meeting, he'd had a few drinks, etc.  I
then asked McQuade about the size distribution testimony.  I suggested to
him that 30-35% might be the an outside limit of 2x3/4 coal in 2x0, and
McQuade agreed.

Based upon the foregoing, I asked McQuade just a handful of questions when
Siegel finished (it was 6:20; we started at 9:30).  I think it is the first
time I ever asked clean-up questions of my own witness, but I didn't want
this testimony to stand as it was, and I was sure that I would not want
McQuade at trial to clean it up then.  The size distribution testimony went
smoothly.  McQuade reiterated his testimony from earlier in the day re the
many factors that affect the size distribution within 2x0 and that, because
of those factors, there can be no standard distribution.  I then asked what
he meant when he gave the 30-35% testimony; he said that that was the upper
limit, and that it was by no means a standard.  Enough said on the issue, I
dropped it.

Re Massey, I directed McQuade's attention to the internal Massey memo and
asked whether it refreshed his recollection about discussing coal size with
Massey.  McQuade said that, because he knows the author of the memo, if the
author says McQuade referenced coal size, McQuade must have done so.
McQuade then said that he still doesn't recall any details whatsoever about
the discussion, having had drinks over dinner, etc.  He also testified that,
notwithstanding the reference to a PLR in the memo, he still didn't think he
referenced a PLR because McQuade doesn't think he even knew about a PLR.
McQuade surmised that the Massey guy might have just been assuming that a
PLR was involved.

Siegel then tried to question McQuade again about the Massey meeting, but he
did nothing but screw up the record.  McQuade, for example, testified for
the first time (Siegel hadn't asked before) that he'd actually had 2
meetings with Massey, the second one being with Matt Arnold and Kevin
McGowan.   While Siegel was questioning, I started packing up my things as a
reminder to Siegel that McQuade had a flight to catch.  Siegel "took the
bait" and, after muddying up the record some more, he decided to terminate
the deposition rather than keep McQuade there to learn about his new
recollection.  Siegel said he had no further questions and McQuade and I
were out of the building in seconds.

Bottom line: McQuade was a below average to bad witness, but he ultimately
didn't damage our record.   Because Mel will likely come back at Matt Arnold
about the Massey meetings in an effort to clean up what Siegel left so
muddy, we should be prepared for that.

CPJ

Christopher P. Johnson
Brobeck, Phleger & Harrison, LLP
1633 Broadway
New York, New York 10019
(212) 237-2558
(212) 586-7878
[email-masked]

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