Pooled Money Investment Account

Merrill, Lehman, AIG

We are aware of your concerns regarding Merrill, Lehman, and AIG, given the headlines we have been waking up to these days. LAIF, representing about 1/3 of the total Pooled Money Investment Account portfolio, does not have any exposure due to Lehman, Merrill, or AIG. The State Treasurer's Investment Division has not been an investor in direct obligations of either firm (CP or corporate notes) by our own choice for several months, and has no open transactions such as repurchases or reverse repurchases with either firm. We closed our only open reverse agreement with Lehman out on September 15th at our request. Further, we do not deal with or in the AIG name and never have.

Daniel S. Dowell,

Director of Investments