Here is an update on new developments that have occurred over the past few days.

New Board Member & Committee Elected

Today, the Enron Board of Directors elected William Powers, Jr., the dean of The University of Texas School of Law in Austin, Texas, to the Board.  Bill currently holds the John Jeffers Research Chair in Law and the Hines H. Baker and Thelma Kelley Baker Chair in Law at The University of Texas School of Law, where he teaches tort, products liability, jurisprudence, legal process, civil procedure and contracts.  He received his J.D. from Harvard Law School in 1973.

Additionally, the Board established a Special Committee that will conduct an in-depth review of the transactions between Enron and entities connected to related parties.  The Special Committee, to be chaired by Bill, comprises independent directors Frank Savage, CEO of Savage Holding LLC as chairman, Paulo Ferraz Pereira, executive vice president of Brazilian-owned investment bank Group Bonanza, and Herbert S. Winokur, Jr., chairman and CEO of Capricorn Holdings, Inc.  The committee is authorized to take any actions it deems appropriate.

The committee has retained William R. McLucas, a former head of the Division of Enforcement of the Securities and Exchange Commission (SEC), with the law firm of Wilmer, Cutler & Pickering as its counsel.  Wilmer, Cutler & Pickering has retained Deloitte & Touche to provide independent accounting advice.

SEC Changes Inquiry to Investigation

We also reported today that the SEC has opened a formal investigation into related party transactions that have been the subject of media reports and were previously the subject of the SEC's formal inquiry.  This is not unusual and we welcome this investigation and are confident that this matter will finally be put to rest.

With so much publicity surrounding our company right now, I want to ask you to keep in mind that not all media reports are accurate or even based on factual information.  We are committed to communicating updates to you every day by voice mail, e-mail or both, so that you know the factual status of our company's situation.

We have created an Enron Updates Intranet site (<http://home.enron.com/updates/>) to keep you apprised of current events.  Please check back frequently for information and new developments.

I truly thank you for your continued hard work and support of our company.