With the Bush-Cheney team finally in the White House and investigations and incriminations swirling around the energy crisis in California, Enron executives continued to focus both east and west in the first half of 2001. In the hope of selling Enron's "solution" to California's energy problems, Ken Lay met privately with Arnold Schwarzenegger and other business leaders in May 2001. When the San Francisco Chronicle broke the story about the meeting, one of Jeff Skilling's friends -- a former colleague from his days at McKinsey & Co. -- warned Skilling that Enron should be more careful about public relations in the days ahead. Meanwhile, Enron's governmental affairs executives were working hard to curry favor with the Bush White House -- and to ensure that legislation unfriendly to Enron never left Capitol Hill.

To: Jeff Skilling
From: Kevin Scott
Date: May 26, 2001
Subject: Enron's secret bid to save deregulation

Jeff:

Candidly, this wouldn't have been my approach (posh location, closed format, odd group, seemingly self-serving agenda).

I read the article below as unsympathetic and almost mocking in its tone toward Enron. It's noteworthy the Beverly Hills meeting was not covered in the Los Angeles papers. Instead, this article comes from the front page of the Bay Area's San Francisco Chronicle (Democratic bastion and home to both of California's United States Senators, power broker Willie Brown, Attorney General Bill Lockyer and the state's public utility commission).

Consistent with my concern about a "coast-to-coast firestorm" engulfing Enron, the New York Times ran two articles today that were unsupportive of the company...

These follow the Times' tough piece on Ken Lay yesterday. Undoubtedly, the Washington Post will have to get into fray soon.

My feeling is that just as with the "business" side, Enron's public policy strategy needs [to] be well informed, sophisticated and comprehensive. I fear that anything less will fuel the potential of undesirable outcomes for Enron's reputation, leadership and shareholder value.

Kevin

To: Ken Lay and Steve Kean
From: Enron governmental affairs executives Rick Shapiro and Linda Robertson
Date: June 1, 2001
Subject: The President's Dinner, A Congressional Salute Honoring President Bush and Vice President Cheney, June 7, 2001, in Washington, DC

...The President's Dinner is a joint fundraising effort by the National Republican Congressional Committee (NRCC) and the National Republican Senatorial Committee (NRSC). We contacted both Congressman Tom DeLay and the House Senate Dinner committee to ensure that Enron could fully participate in The President's Dinner and receive credit for money we have already committed to the Committees earlier this year.

With the assistance of Congressman Tom DeLay, we were able to apply our previously contributed soft money toward this dinner. Consequently, we will be credited as giving $250,000 to this event, even though we are being asked to give only $50,000 in new soft money. Our earlier contributions of $100,000 each to the NRCC and NRSC will make up the remaining money. You will be listed as Co-Chair of the event, the highest level of giving. We will be crediting Congressmen DeLay, Armey, Barton and Tauzin for raising the $100,000 allocation for the NRCC. As for $100,000 we earlier gave the NRSC, Senator Kay Bailey Hutchison has requested that Enron give her some credit for raising the money. We would like to split it among several other Senators.

In addition, Congressman Tom DeLay has asked Enron to contribute $100,000 to his leadership committee, ARMPAC, through a combination of corporate and personal money from Enron's executives. ARMPAC funds will be used to assist other House Members as well as the redistricting effort in Texas. We will be meeting this request over the course of this calendar year...

To: Enron executives Steve Kean, Richard Shapiro, Linda Robertson, et al.
From: John Shelk [Enron vice president for governmental affairs]
Date: July 6, 2001
Subject: Status of Discussions on Electricity Legislation -- No Agreement Reached.

Once again today I participated in the discussions on possible electricity legislation held in the offices of Majority Whip Tom DeLay with other interested parties including industry segments, public power and state regulators. The other congressional participants were staff to Reps. Steve Largent and Chip Pickering.

After meeting all week (except Wednesday), the group was unable to reach an agreement or even a provisional consensus on what could be placed in an electricity title that could be added to the comprehensive energy package that the House Energy and Commerce Committee will begin to process next week...

As noted, the lack of an agreement reduces our exposure when the mark up occurs...

To: Jeff Skilling and his secretary, Joannie Williamson
From: Bill Gowan, Election Day Consulting, LLC
Date: July 17, 2001
Subject: Tom DeLay CA Aug. Dinner & Golf

Jeff, I spoke to Joannie this afternoon and asked for your e-mail to send this invitation. Here is the initial information on the event. We are expecting additional members of Congress to attend both events. If you have any questions or comment, please let me know...

Tom DeLay / ARMPAC
Guest Speaker -- David Horowitz
Four Seasons Aviara -- Dinner & Golf Tournament

The event will take place:
Wednesday, August 15
Four Seasons Aviara (Northern San Diego, CA)

Golf ... Limited to 40 people ... Cost is $5k per person.
Dinner ... Speakers Tom Delay and David Horowitz ... $1,500 per person, $2,500 per couple ... There are four levels of sponsorship: $100K, $50k, $25k and $15k. Contribution levels will also transfer from the dinner and/or Golf Tournament to the ARMPAC "contributor sponsorship program."

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Just as Rosalee Fleming handled Ken Lay's e-mail correspondence with his family, so a woman named Barbara VanDerVliet sometimes handled family correspondence for Lay's wife, Linda. Her work touched on issues that all families face -- the planning and politics of family holiday dinners, among them -- and on some issues that few workaday families ever have to consider.

Members of the Lay family
From: Barbara VanDerVliet
Date: Sept. 28, 2001
Subject: Thanksgiving

Hello everyone,

I am doing an inquiry as to what each family's level of participation will be for Thanksgivings. If it is an immediate family-only event, when will you be arriving in Galveston, how many people in your family will be there, and will you be attending the dinner?

Mr and Mrs Lay will be there from the 21st-25th of November.

If it is a family plus dinner then what will be your level of participation then? Please answer all the above questions as well as who else you would like to invite?

Please respond by October 5th.

Thanks, Barb.

Members of the Lay family
From: Barbara VanDerVliet
Date: Sept. 28, 2001
Subject: Furniture!

Hello everyone,

Mrs. Lay is taking inventory and organizing her furniture. She has asked me [to] email everyone with the request for everyone to photograph all furniture that is not your own. This means that if you have any of hers or your fellow siblings furniture she would like a photo for our records by the 12th of October.

I have a digital camera or a polaroid that you can borrow. If you have no foreign furniture please reply with a "Nope, don't have any!" by Friday October 5th.

Also on a side note, Please be on time for the family dinner on the 12th of October. We will be taking the kiddy Christmas shot before dinner.

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In the summer and fall of 2001, the Enron empire began to crumble. In August, Jeff Skilling, who had replaced Lay as CEO in February, resigned suddenly for what were said to be personal reasons. Lay took his old job back, and Wall Street began to demand more detailed financial information about Enron's performance. In October, Enron announced that it would take $10.1 billion in charges, a substantial portion of which it attributed to investment partnerships that were run by CFO Andrew Fastow, who was either fired or forced to quit on October 24, 2001. The next day, Lay's daughter sent Lay an upbeat assessment of Enron's future.

To: Ken Lay
From: Elizabeth Vittor
Date: Oct. 25, 2001
Subject: More Good News

Dad,

The message boards look really good today. There are one or two bad guys, but they are the shorts and everyone else is betting on stock back in the 20s before the weekend and a turnaround. The general consensus is Enron is still a good company with good earnings and this is a great time to buy.

Love You, Dad,

Me

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