◆ SpookStack

OQ O UNCLASSIFIED To: San Diego From: San Diego Re: 205-SD-72665, 05/10/2011 improvements. Examples of the documents provided related to this community donation included separate evaluations, comments and rankings from each of the Advisory Council and Technical Committee members, minutes from the meetings, request for matching funds from state and federal governments to maximize the impact of the donation, donation receipt, requests for bids on equipment, and invoices of the equipment purchased. The bidding process in this instance was not performed by the Trust members, but rather by the beneficiary. For donations where the bidding process was overseen by the Trust members, the lowest bidder was awarded the project. The example municipal donation related to a 09/2008 4,849,754 pesos in-kind donation to the City of Ensenada for 26 patrol cars with radio equipment and a Dodge hatchback. Examples of the documents provided by Jones Day to support this donation included the donation request from the Municipal Secretary of Public Safety, the donation application, Ensenada City Council records, supplier quotes, Technical Committee meetin j letter from the Mayor to the Secretary of the Trast,| stating that the equipment was urgently needed and requesting e Trust make it a priority, a letter from the Secretary of the Trust informing the Mayor that the Trust had decided to purchase the listed equipment, Ensenada City Council agreement to accept the offered donation of police equipment, purchase order and invoices for 26 patrol cars, and a donation receipt from the City of Ensenada. No direct benefit was received by Ensenada officials related to this donation. Sempra accounted for the monetary funding of the trust for book purposes by capitalizing them as part of the LNG plant. The donations were deducted for tax purposes. The accounting treatment was done in accordance with Generally Accepted Accounting Principles (GAAP) in Mexico, and was reviewed and approved by Deloitte & Touche in the United States and Mexico. The $7 million that was capitalized is immaterial in relation to -- the total $1 billion investment in the LNG plant. [ | statea that in Jones Day's review of the Ensenada Trust; idence was uncovered to indicate there was a quid pro quo relationship between the funding of the Trust and any approvals needed from the City of Ensenada for the construction of the LNG plant, nor was any evidence discovered of payments to government officials or their relatives. The only relationship that existed between the funding of the Trust and the building of the plant was that Sempra would not have invested in a Trust for UNCLASSIFIED 4