Subject: RE: Report: Enron CFO Reaped Millions from Partnership
From: [email-masked]
To: [email-masked], [email-masked], [email-masked]
Date: Fri, 19 Oct 2001 12:47:42 -0700 (PDT)

I wish I was that smart!

-----Original Message-----
From: Appling, Mike [mailto:[email-masked]]
Sent: Friday, October 19, 2001 12:47 PM
To: Steven Wolf (E-mail)
Cc: Whitt, Mark
Subject: FW: Report: Enron CFO Reaped Millions from Partnership

Didn't want to inflame him as he masterminded the whole thing. When he made
the comments about a pay cut to work at Western, he wasn't talking about
salary and bonus and normal such things.  He was talking about the Enron
management investment gain scheme for which they reaped millions.  Hell, he
and Luce and other employees at Enron probably made a killing shorting the
stock from 80 to 30.

-----Original Message-----
From: Wolf, Steven (EKT) [mailto:[email-masked]]
Sent: Friday, October 19, 2001 1:44 PM
To: Appling, Mike
Subject: RE: Report: Enron CFO Reaped Millions from Partnership

why didn't you send that to whitt

> -----Original Message-----
> From:	Appling, Mike [SMTP:[email-masked]]
> Sent:	Friday, October 19, 2001 1:30 PM
> To:	Jerry Jernigan (E-mail); Steven Jernigan (E-mail); Steven Wolf
> (E-mail)
> Subject:	FW: Report: Enron CFO Reaped Millions from Partnership
> 
> Two words, slime ball.
> 
> ma
> 
> -----Original Message-----
> From: [email-masked] [mailto:[email-masked]]
> Sent: Friday, October 19, 2001 12:00 PM
> To: Appling, Mike
> Subject: Report: Enron CFO Reaped Millions from Partnership
> 
> 
> 
> http://www.cfo.com 
> 
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> Today in Finance
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> 
> Friday, October 19, 2001
> Report: Enron CFO Reaped Millions from Partnership
> 
> By Stephen Taub
> 
> Talk about the appearance of a conflict of interest. 
> 
> A limited partnership organized by Andrew Fastow, CFO at Enron Corp. since
> 1997, racked up millions of dollars in profits from transactions conducted
> with the energy company, according to The Wall Street Journal, citing an
> internal partnership document. 
> 
> The partnership reportedly renegotiated the terms of deals with Enron in
> ways that boosted its financial positions or reduced its risk of losses. 
> 
> Fastow and his partnership associates are said to have racked up more than
> $7 million in management fees and about $4 million in capital increases
> last
> year. The huge sums came from their investment of nearly $3 million in the
> partnership LJM2 Co-Investment LP, the Journal claims. 
> 
> The limited partnership was set up in December 1999 mainly to do business
> with Enron, and big-time investors include Wachovia Corp., General
> Electric
> Co.'s General Electric Capital Corp., and Credit Suisse First Boston,
> according to the account in the paper. 
> 
> The gains from the deals were revealed in a report to partnership
> investors
> dated April 30, which was signed by general partner Fastow, says the
> Journal. 
> 
> Enron officials had no comments for the Journal in regard to the LJM2
> partnership document. However, it would seem there might be some concerns
> as
> Fastow, as Enron's CFO, has fiduciary duties to Enron shareholders. 
> 
> On Tuesday, Enron stunned investors with the announcement that it had
> taken
> a $1.01 billion charge in the third quarter due mostly to write-downs of
> lousy investments, resulting in a $618 million loss for the three-month
> period. 
> 
> Downgrades Up, Upgrades Down
> According to Moody's Investors Service, credit rating downgrades of U.S.
> corporations far exceeded upgrades in the third quarter. In a press
> release,
> Moody's noted that the ratings of 125 companies were knocked down in the
> quarter, while only 43 corporations received credit upgrades. This is the
> 14th consecutive quarter that downgrades have exceeded upgrades. 
> 
> Among junk credits, 93 issuers were downgraded--versus only 19
> upgrades--in
> the third quarter. The ratings news wasn't so bad for investment-grade
> firms, however, which experienced 32 downgrades, versus 24 upgrades. 
> 
> Recently, Moody's reported a third-quarter surge in junk defaults. The
> hardest hit sectors were airlines, telecommunications, motor vehicle
> parts,
> and chemical companies, while the strongest sector was oil and gas. 
> 
> Moody's senior economist John Puchalla said an increase in risk aversion,
> a
> loss of revenues, and the potential changes in demand away from travel and
> tourism-related industries, have weakened credit quality since the
> September
> 11 terrorist strikes. 
> 
> Moody's also pointed out that most aggregate measures of corporate debt
> protection remain stronger now than in the late 1980s and early 1990s.
> "The
> much stronger credit position of financial institutions also diminishes
> the
> likelihood of a broad-based credit crunch," noted a Moody's press release.
> 
> 
> The press release also stated that "the lowest short- to intermediate-
> term
> borrowing costs and one of the biggest infusions of fiscal stimulus since
> the mid-1960s, as well as the fastest annual expansion of M2, or financial
> liquidity, since 1983, signal the return of above-average expenditures
> growth by 2002's second half." 
> 
> Read On! For More of Today in Finance
> http://m.s.maildart.net/link_30322_6517492_1_120083435_32931886_0_79
> 
> 
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> 
> Also on CFO.com:
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> http://m.s.maildart.net/link_30326_6517492_1_120083435_32931886_0_7d
> 
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> Copyright (c) 2001 CFO Publishing Corporation
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