Enron Corp. - University of California | Office of The President

day-to-day activities would be managed by Enron insiders Fastow, Kopper, and Glisan. It explained
that "[t]he Partnership expects that Enron will be the Partnership's primary source of investment
opportunities" and that it "expects to benefit from having the opportunity to invest in Enron-
generated investment opportunities that would not be available otherwise to outside investors."
It specifically noted that Fastow's "access to Enron's information pertaining to potential
investments will contribute to superior returns." In addition, investors were told that a similar
Fastow controlled partnership (JEDI) that had done deals with Enron like the ones LJM2 would
do had tripled their investment in just two years and that overall returns of 2,500% to LJM2
investors were actually anticipated, In short, the non-public offering memorandum Vinson &
Elkins participated in drafting was an invitation to join in the benefits of self-dealing transactions
with Enron.
814. Vinson & Elkins knew it was indispensable that LJM2 be formed before year-end 99
because of the need to use it as a vehicle to consummate several transactions with Enron before year-
end 99 to create huge profits for Enron in the 4thQ 99 so that Enron could meet and exceed its
forecasted 99 earnings. However, as had been the case with Chewco at year-end 97, there was
tremendous time pressure and it could not get done. Merrill Lynch could not raise the money from
outside investors in LJM2 in time to fund LJM2 by year-end 99 with sufficient capital to enable it
to do the desperately needed transactions with Enron. So, with the knowledge of Vinson & Elkins,
on or about 12/22/99, certain Enron bankers, knowing that LJM2 was going to be an extraordinarily
lucrative investment anyway created documentation that enabled the banks to advance virtually
100% of the monies needed to initially fund LJM2, i.e., many times more than the banks' allocated
shares in 12/99. Key year-end LJM deals, involving LJM, detailed elsewhere, were:
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