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BACKGROUND ON :CRUDE q ONTACTS WITH CHARTER The Charter Conpany receives approximately 100 contacts a month fron various individuals purporting to have access to short or long-term supplies of crude 011. Such contacts are often accompanied by a “reference” to a. specific type of crude oil frou a variety of different oil production locations. Generally speaking, individuals bringing such propositions have as part... - of their proposal a commission fee ranging from S¢ a barrel to occasionally as high as 52 of the total cost per barrel. The (fdeciuce of Charter @t-Companry is to acknowledge such contacts within the framework of day-to-day business, and to evaluate each such proposal for its viability. In the ofl industry it is common practice to | handle such propositions in this regard. Individuals brokering crude of2 are especially prevalent during periods of extreme short supply of crude oil worldwide. It is common practice in most oil-producing countries to distribute their crude ofl production in three ways: 1. Through private ofl companies that have production in that particular’ country. . . | 2. Through nationally owned of1 companies within that country. 3. Through allocations of ofl to various individuals. It is this last distribution network that accounts for the vast majority . of individual oil broker transactions. “SEQUENCE OF EVENTS: CONTACT FROM BILLY CARTER Billy Carter and Mr. Jack MacGregor, a former executive vice president of Carey Energy Company and currently a consultant to Charter, at some point in time had conversations regarding potential brokering of Libyan oil by Mr. Carter. Mr. MacGregor contacted The Charter Company and sci up a meeting | eo ete between the president of Charter Crude 011 Company, Mr. Lewis Nasife, ana?