January 24, 2002

Mr. Kenneth L. Lay
Chairman and Chief Executive Officer
Enron Corporation
1400 Smith Street
Houston, Texas 77002

Dear Mr. Lay:

We are writing to you to gather additional information concerning your Enron stock transactions. We are aware that all public sales of stock must be reported in the following month of such sales. According to these reports, during the past three years, you exercised stock options and then sold stock for a profit of about $205 million. However, these public reports do not include sales of stock back to Enron, which would be used to pay personal loans. A report on sales of stock back to the company is not required until February 14.

An article in the New York Times, dated January 22, 2002, describes in general terms these transactions, based upon statements by your attorney. That article states:

    Mr. Lay had a $4 million revolving line of credit from Enron, which Mr. Silbert said was raised to $7.5 million at some point in 2001. He said that Mr. Lay took out money from that loan, and then repaid it, on 15 separate occasions from February through October.

    In each case, he repaid it by turning over stock to Enron. He appears to have obtained some of those shares by exercising options, while in other cases he returned shares he already owned. Mr. Silbert said Mr. Lay took out the loans from the company when he expected that he was likely to face margin calls from other lenders.

    If those 15 repayments averaged $4 million, then they totaled $60 million, which would represent the value of stock he returned to the company. Mr. Silbert declined to give exact figures, and formal disclosure of the transactions is not required by Securities and Exchange Commission rules until Feb. 14.

We are concerned about the unreported nature of these transactions and their effect upon Enron shareholders and employees, particularly during the stock’s steep decline in 2001.

We request that you provide our Committee with a detailed listing of all loan transactions involving you, Jeff Skilling, Andrew Fastow, Michael Kopper, Rick Buy, Rick Causey, and any other senior executive with your company during 2001. (We understand that you have resigned your position as chairman and chief executive of Enron. With respect to questions relating to other Enron executives, please forward this letter to your successor in the corporation to respond.) The information should include:

1) the date and amount of each loan to you by Enron;

2)     for each repayment of the loan:

a) the date of the repayment;

b)     the amount of the repayment;

c) if the repayment was in the form of stock, the amount of shares and the value assigned to each share of stock for the purpose of repayment of your loans.

3) Please describe the extent to which the Enron Board of Directors was made aware of any loans or repayments.

Although as we noted, public disclosure of these transactions is not required until February 14, we are in the midst of an intensive investigation of the demise of the company. We request that this information be provided to the Committee no later than January 28, 2002. If you have any questions, please contact David Cavicke of the Committee majority staff at (202) 225-2927, or Edith Holleman of the minority staff at (202) 226-3400.

Sincerely,