February 12, 2002

Mr. Stephen Cooper
Chairman and Chief Executive Officer
Enron Corporation
1400 Smith Street
Houston, Texas 77002

Dear Mr. Cooper:

As part of the ongoing Committee on Energy and Commerce’s investigation of the policy implications of the failure of the Enron Corporation and its related subsidiaries and partnerships, I have become concerned with the stewardship of Enron of the gas pipelines it has owned, operated, or controlled for the past ten years, both here and abroad. This letter seeks information regarding the adequacy of Enron expenditures for the safety of such pipelines. Such expenditures would involve both labor and capital expenses for inspection, maintenance, and replacement of these pipelines. The most serious example of possible Enron negligence involves the November 1996 Rio Piedras incident involving the explosion of the pipeline operated by your San Juan Gas subsidiary.

In its report on that disaster, the National Transportation Safety Board (NTSB) found that Enron, despite knowing for 10 years that San Juan Gas did not comply with pipeline safety requirements, failed to adequately correct the deficiencies of its subsidiary. In the lawsuits seeking damages for wrongful death and other injuries to the victims, apparently Enron/San Juan agreed not to litigate the cause of the explosion, leaving only the question of damages.

I was distressed to learn Enron has used its bankruptcy filing as an excuse to prevent the payment of damages by its insurance carriers. According to a press account, Enron maintains that settlement of the damage claims would be a "distraction" from the company’s reorganization efforts. Given the sufficiency of Enron’s insurance, such a claim appears to reflect the continuing indifference of the company to the human toll left in the wake of its policy decisions.

Such indifference as detailed in the NTSB’s report creates suspicion regarding the sufficiency of Enron’s investment of the human and other capital necessary to assure that such disasters do not occur at San Juan Gas or its other subsidiaries that operate gas pipelines. Accordingly, I request that you provide the following documents no later than the close of business on Friday, March 8, 2002:

1. All records relating to the decision(s) to delay hearing or settlement of the claims of the victims of the San Juan Gas disaster.
   
2. All records relating to agreements with insurance companies that cover the risk of the 1996 Rio Piedras explosion. I understand that at least nine companies and policies are involved.
   
3. All records regarding safety issues raised at San Juan Gas propane pipeline or any other pipeline owned or operated by Enron or any subsidiary or partnership since January 1, 1992. Such records should include but not be limited to any internal or external consultant or engineering reports that in whole or part evaluate safety issues. With regard to San Juan Gas, such records should include the Gillespie Report, prepared by Gillespie Ventures, Inc. on December 27, 1995; the 1996 Heath Survey/Rio Piedras Area; and, the August 1, 1996, De La Fuente Operational Assessment on San Juan Gas.
   
4. All due diligence documents that describe any safety concerns relating to the purchase or sale of gas pipelines or entities that own or control gas pipelines since January 1, 1992.
   
5. All memoranda, including but not limited to e-mail traffic, of meetings, phone calls and other contacts with Administration officials regarding gas pipeline safety, or which discuss strategy or other planning for such contacts, from January 1, 1992, to the present. This would include contacts by employees or contractors for Enron, its subsidiaries and other related entities that Enron owned or control. Additionally, this would include any internal economic analyses of regulatory or statutory proposals related to those contacts, such as those produced by the computer cost calculating program known as "the matrix" that a February 10, 2002, Washington Post article recently reported was used as a primary tool for deciding the company’s regulatory policies.

Thank you for your assistance. If you have any questions regarding these requests, please contact me, or have your staff contact Rick Kessler or David Nelson of the Committee on Energy and Commerce Democratic staff at (202) 226-3400.

Sincerely,

 
JOHN D. DINGELL
RANKING MEMBER

cc: The Honorable W. J. "Billy" Tauzin, Chairman
Committee on Energy and Commerce