Company Name: El Paso Corp.
Public Availability Date: March 6, 2006

Document Sections:

INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
STAFF REPLY LETTER

[INQUIRY LETTER]

By Federal Express

Office of Chief Counsel
Division of Corporation Finance
U.S. Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549

Re: Proposal Submitted by Lucian Bebchuk

Ladies and Gentlemen:

We are writing on behalf of our client, El Paso Corporation, a Delaware corporation ("El Paso"). El Paso has received from Mr. Lucian Bebchuk, one of its stockholders, a letter requesting that a proposal and accompanying supporting statement (the "Proposal") be included in El Paso's proxy materials for its next Annual Meeting of Stockholders. A copy of the Proposal is attached hereto as Exhibit A. El Paso expects to file its definitive proxy materials on or about March 29, 2006.

On behalf of El Paso, we respectfully notify the staff of the Division of Corporation Finance of the U.S. Securities and Exchange Commission (the "Division") and Mr. Lucian Bebchuk, to whom we are today sending a copy of this letter, that El Paso intends to omit the Proposal from its proxy materials for the reasons set forth below. In accordance with Rule 14a-8 of the Securities Exchange Act of 1934, as amended, we enclose six (6) copies of this letter (which constitutes both the required statement of reasons and supporting opinion of counsel) and the Proposal. El Paso respectfully requests the concurrence of the staff of the Division that no enforcement action will be recommended if El Paso omits the Proposal from its proxy materials.

Factual Background

El Paso received the Proposal on December 7, 2005. The Proposal requests that the following matter be submitted to a vote of the stockholders at the next Annual Meeting of the Stockholders:

"It is hereby RESOLVED that pursuant to Section 109 of the Delaware General Corporation Law, 8 Del. C. §109, Article 5 of the Corporation's Second Amended and Restated Certificate of Incorporation, and Article XII of the Corporation's By-laws, the Corporation's By-laws are hereby amended by adding a new Section 16 to Article III of the Corporation's By-laws, as follows:

SECTION 16. REQUIRED DISCLOSURES OF THE BOARD

To the extent permitted under federal and state law, in any proxy statement in which the Board discloses to stockholders information about the compensation of the Chief Executive Officer and other "named executive officers" as that term is defined in Item 402 of SEC Regulation S-K during a preceding period (the "reported period"), the Board will disclose to stockholders the estimated monetary value of the benefits to which each such named executive officer had any vested rights as of the last day of the reported period under any pension, retirement or deferred compensation plan, including any supplemental executive retirement plan, established by the Corporation.

This By-law shall be effective immediately and automatically as of the date it is approved by the vote of stockholders in accordance with Article XII of the Corporation's By-laws."

Discussion of Reasons for Omission

El Paso may omit the Proposal from its 2006 proxy statement because it has been substantially implemented

El Paso believes that the entire Proposal may be omitted pursuant to Rule 14a-8(i)(10) because the Proposal has been substantially implemented. Rule 14a-8(i)(10) provides that a company may exclude a shareholder proposal if "the company has already substantially implemented the proposal," thereby rendering it moot. As demonstrated below, El Paso currently provides all of the compensation-related disclosures that the Proposal would require in the Executive Compensation, Compensation Committee Report on Executive Compensation and Benefit Plans section of its annual proxy statement. The Executive Compensation section (pages 21 through 25), Compensation Committee Report on Executive Compensation (pages 27 through 36) and description of El Paso's supplemental benefits plan (page 39) in the Benefit Plans section of the 2005 Definitive Proxy Statement (the "Proxy Statement") are attached as Exhibit B.

Under the standard expressed by the Commission in Exchange Act Release No. 34-19135 (August 16, 1983), a proposal may be omitted if it has been "'substantially implemented by the issuer,'" though it has not been "fully effected." In establishing this subjective interpretative position, the Commission "determined that the previous formalistic application of this provision defeated its purpose." A company has substantially implemented a shareholder proposal if the company's relevant policies, practices and procedures "compare favorably with the guidelines of the proposal." Texaco, Inc. (March 28, 1991). When a company has the essential objectives of a policy in place, or has policies, procedures and standards concerning the subject matter of the proposal in place, the Division has consistently found that the proposal has been substantially implemented and can be omitted under Rule 14a-8(i)(10). See, e.g. The Talbots, Inc. (April 5, 2002) (permitting exclusion of a proposal requesting implementation of a code of corporate conduct based on United Nations standards, where the company revised its social and human rights policy and published an annual report); The Gap, Inc. (March 16, 2001) (permitting exclusion of a proposal requesting a report on the child labor practices of the company's suppliers when the company had an established code of vendor conduct and disseminated detailed labor information to shareholders). Likewise, El Paso's current policies, practices and procedures compare favorably with the executive compensation disclosure guidelines in the Proposal.

Essentially, the Proposal requests that El Paso make proxy disclosures that estimate the monetary value of certain executive benefits, including benefits under pension, retirement and deferred compensation plans. However, as demonstrated in Exhibit B, El Paso already meets, and in fact exceeds the disclosure requirements recommended in the Proposal.

On page 21 of Exhibit B, El Paso provides a Summary Compensation Table summarizing all annual and long-term compensation for its Chief Executive Officer and its four most highly compensated executives (the "Named Executives"). This table includes information on restricted stock awards, securities underlying options, long-term incentive payouts, and other compensation, including El Paso's contributions to the El Paso Retirement Savings Plan and supplemental company match under the Supplemental Benefits Plan. The notes accompanying the chart on the following pages provide more detailed descriptions of the payments that are outlined in the Summary Compensation Table. Most notably, the company provides charts showing all of El Paso's contributions to the Retirement Savings Plan (page 22), Option Grants (page 23), and all payments into the Pension Plan (page 25).

Additionally, The Compensation Committees Report on Executive Compensation (beginning on page 27 of Exhibit B) provides a detailed explanation of El Paso's general compensation philosophy and the components that make up the total compensation of its Named Executives. Most notably, the table on page 31 summarizes the total potential benefits that the Named Executives could receive pursuant to El Paso's employee benefit, severance protection and equity compensation plans assuming certain termination, retirement and change in control events. Furthermore, the description of El Paso's supplemental benefits plan (page 39 of Exhibit B) in the Benefit Plans section includes a table which summarizes the Named Executives' supplemental retirement savings and pension benefits. El Paso's disclosures are well in excess of those required by applicable SEC and NYSE requirements as well as those recommended by the Proposal and El Paso intends to continue to provide full and transparent disclosures regarding director and executive compensation.

It is the position of El Paso that the annual proxy statement meets and exceeds the disclosure requirements in the Proposal. Therefore, the Company believes that it may exclude the Proposal as substantially implemented under Rule 14a-8i(10).

Request

For the foregoing reasons, El Paso respectfully requests that the Division confirm that it will not recommend enforcement proceedings if El Paso omits the Proposal from its 2006 proxy materials. Should you have any questions or comments regarding the foregoing, please do not hesitate to contact the undersigned at 713/226-1496. Please acknowledge receipt of this letter and enclosures by stamping the enclosed additional copy of this letter and returning it in the enclosed self-addressed stamped envelope. We appreciate your timely attention to this request.

Very truly yours,

/s/

David F. Taylor

Enclosure

cc: Via Facsimile

Mr. David Siddall
El Paso Corporation
1001 Louisiana Street
Houston, Texas 77002

By Certified Mail

Mr. Lucian Bebchuk
1545 Mass. Ave.
Cambridge, MA 02138

Michael Meenan (Firm)

[INQUIRY LETTER]

December 7, 2005

VTA OVERNIGHT MAIL
Corporate Secretary
El Paso Corporation
P.O. Box 2511
Houston, TX 77252-5211

Re: Shareholder Proposal of Lucian Bebchuk

To whom it may concern:

I am the owner of 450 shares of common stock of El Paso Corporation (the "Company"), which I have continuously held for more than 1 year as of today's date. I intend to continue to hold these securities through the date of the Company's 2006 annual meeting of shareholders.

Pursuant to Rule 14a-8, I enclose herewith a shareholder proposal and supporting statement (the "Proposal") for inclusion in the Company's proxy materials and for presentation to a vote of shareholders at the Company's 2006 annual meeting of shareholders.

Please let me know if you would like to discuss the Proposal or if you have any questions.

Sincerely,

/s/

Lucian Bebchuk

PROPOSAL

It is hereby RESOLVED that pursuant to Section 109 of the Delaware General Corporation Law, 8 Del. C. §109, Article 5 of the Corporation's Second Amended and Restated Certificate of Incorporation, and Article XII of the Corporation's By-laws, the Corporation's By-laws are hereby amended by adding a new Section 16 to Article III of the Corporation's By-laws, as follows:

SECTION 16. REQUIRED DISCLOSURES OF THE BOARD

To the extent permitted under federal and state law, in any proxy statement in which the Board discloses to stockholders information about the compensation of the Chief Executive Officer and other "named executive officers" as that term is defined in Item 402 of SEC Regulation S-K during a preceding period (the "reported period"), the Board will disclose to stockholders the estimated monetary value of the benefits to which each such named executive officer had any vested rights as of the last day of the reported period under any pension, retirement or deferred compensation plan, including any supplemental executive retirement plan, established by the Corporation.

This By-law shall be effective immediately and automatically as of the date it is approved by the vote of stockholders in accordance with Article XII of the Corporation's By-laws.

SUPPORTING STATEMENT

I believe that decisions by the Board and its compensation committee regarding the compensation of the Corporation's senior executives are important and could have a significant effect on shareholder interests. In order for shareholders to be accurately informed regarding such decisions and to have a good picture of the Board's performance and the Corporation's governance, it is essential that information about the total amount and makeup of the compensation of top executives be comprehensive and transparent. Therefore, I believe that it is desirable for the Board to provide shareholders with information about the monetary value of benefits from pension, retirement, or deferred compensation plans that provide benefits to senior executives. By making the compensation accorded to top executives more transparent, the proposed By-law could enable shareholders to better assess the compensation decisions made by the Board. As a result, the proposed By-law could in my view make the Board more accountable and improve the way in which compensation arrangements are set and the Corporation is governed.

I urge you to vote "yes" to support the adoption of this proposal.

[INQUIRY LETTER]

January 25, 2006

VIA TELECOPY AND U.S. MAIL

U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
Mail Stop 3010
100 F. Street N.E.
Washington, D.C. 20549

Re: Shareholder Proposal Submitted by Lucian Bebchuk for Inclusion in El Paso Corporation's 2006 Proxy Statement

Ladies and Gentlemen:

This letter is submitted on behalf our client, Lucian Bebchuk in connection with the shareholder proposal which Mr. Bebchuk submitted to El Paso Corporation ("El Paso" or the "Company") for inclusion in the Company's 2006 Proxy Statement (the "Proposal").

We have received a letter dated January 6, 2006 from Locke Liddell & Sapp LLP on behalf of El Paso to the Staff of the Division of Corporation Finance (the "Staff") of the U.S. Securities and Exchange Commission (the "Commission") requesting the Staff's concurrence that it will not recommend enforcement if the Company excludes the Proposal from its 2006 Proxy Statement (the "No-Action Request"). Please be advised that we intend to submit a response to the No-Action Request, which we will provide to the Commission no later than Monday, February 6, 2006.

Please contact me in the event that you require our response before the above-specified date or if the proposed timing of our response is otherwise unacceptable.

Sincerely,

/s/

P. Bradford deLeeuw

PBD:cme

[INQUIRY LETTER]

VIA TELECOPY AND OVERNIGHT MAIL

U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
450 Fifth Street, N.W.
Washington, D.C. 20549-0402

Re: Shareholder Proposal Submitted by Lucian Bebchuk for Inclusion in El Paso Corporation's 2006 Proxy Statement

Ladies and Gentlemen:

This letter is submitted on behalf our client, Lucian Bebchuk¹ in response to the letter dated January 6, 2006 from Locke Liddell & Sapp LLP (the "No Action Request Letter") on behalf of El Paso Corporation ("El Paso" or the "Company") to the Staff of the Division of Corporation Finance (the "Staff") of the U.S. Securities and Exchange Commission (the "Commission"). The No Action Request Letter asks the Staff to concur in the Company's view that the shareholder proposal submitted to the Company by Mr. Bebchuk (the "Proposal") may be excluded from the Company's 2006 proxy statement pursuant to Rule 14a-8(i)(10). Contrary to the Company's representations in its No Action Request Letter, the Proposal has not been substantially implemented by the Company, and therefore, there is no basis to exclude the Proposal from El Paso's proxy statement.

Essentially, El Paso seeks to meet its burden of showing that it is entitled to exclude the Proposal pursuant to Rule 14a-8(i)(10) by: (a) arguing that it voluntarily disclosed information in its 2005 proxy statement which is similar to the information required by the Proposal; and (b) baldly asserting that "El Paso intends to continue to provide full and transparent disclosures regarding director and executive compensation." No Action Request Letter at 3 (emphasis added). This argument falls far short of establishing sufficient grounds to exclude the Proposal.

As an initial point, El Paso wholly fails to grasp that the Proposal does not request the Company to demonstrate that it voluntarily made specified disclosures on a single past occasion, nor request that the Company implement voluntary disclosure guidelines, principles or policies. To the contrary, the Proposal directly amends the Company's bylaws to establish a binding disclosure requirement which would apply prospectively to future proxy statements. Under Delaware law, a shareholder enacted bylaw is not equivalent to policy or resolution of the board - and thus, even if El Paso had undertaken such measures, it still would not have substantially implemented the Proposal.

Secondly, El Paso has failed to identify a single board resolution, guideline, policy or principle which embodies a requirement (or even a stated commitment) to disclose the information which would be required by the Proposal. To the contrary, El Paso's "Corporate Governance Guidelines" (attached hereto as Exhibit A) are entirely silent on the issue of executive compensation disclosure and El Paso's "Compensation Committee Charter" (attached hereto as Exhibit B) merely states that the Compensation Committee "shall prepare and provide a report to stockholders of the Company on executive compensation for inclusion in the Company's annual proxy statement, in accordance with applicable rules and regulations of the SEC." (Emphasis added).

Finally, even assuming for argument's sake that El Paso could meet its burden merely by arguing that it previously, on a single occasion, disclosed the information that would be required by the Proposal, El Paso's argument would still fail because the 2005 proxy statement does not disclose the executive compensation information required by the Proposal.

I. The Proposal Amends The Company's Bylaws To Require Specific Disclosures In The Company's Future Proxy Statements

The Proposal, if adopted by shareholders, amends the Company's by-laws (the "Bylaw Amendment") to require the Company to make specific executive compensation disclosures that are not currently required by applicable law, including: (i) the Commission's rules and regulations and (ii) the rules and regulations of the New York Stock Exchange ("NYSE"), upon which the Company's stock is listed.

It is incontrovertible (and, El Paso does not dispute) that the disclosure required by the Bylaw Amendment is not currently required by applicable law. In fact, in its discussion of the recently Proposed Rule on Executive Compensation And Related Party Disclosure, the Commission cited to an article by Mr. Bebchuk to highlight this specific deficiency in the current executive compensation disclosure rules. See Release Nos. 33-8655; 34-53185; IC-27218; File No. S7-03-06 (January 27, 2006) at p. 75 n. 152 (citing Lucian A. Bebchuk and Jesse M. Fried, Stealth Compensation via Retirement Benefits, 1 Berkeley Bus. L.J. 291, 314-316 (2004)).

It is similarly incontrovertible (and, again, El Paso does not dispute) that El Paso's shareholders possess the authority to legally enact the Bylaw under Delaware law.² Under the Delaware General Corporation Law (the "DGCL"), the shareholders are vested with the power to adopt bylaws, which power may be shared with the board of directors if the corporation's certificate of incorporation so provides. DGCL §109(a); Unisuper Ltd. v. News Corp., No. 1699-N, 2005 WL 3529317, at *6 n. 48 (Del. Ch. Dec. 20, 2005) ("In addition, the Delaware General Corporation Law vests shareholders with the power to adopt, amend or repeal bylaws relating to the business of the corporation and the conduct of its affairs.").³ Article XII of El Paso's By-laws, as amended July 31, 2003 (attached hereto as Exhibit C) provides that:

These By-laws may be altered or repealed and new By-laws may be made by the affirmative vote, at any meeting of the Board, of a majority of the entire Board, subject to the rights of the stockholders of the corporation to amend or repeal By-laws made or amended by the Board by the affirmative vote of the holders of record of a majority in number of shares of the outstanding stock of the corporation present or represented at any meeting of the stockholders and entitled to vote thereon, provided that notice of the proposed action be included in the notice of such meeting.

(emphasis added). Similarly, Article 5 or El Paso's Articles of Incorporation (attached hereto as Exhibit D) provides:

The Board of Directors shall have the power to adopt, amend or repeal the By-laws of this corporation, subject to the power of the stockholders to amend or repeal such By-laws. The stockholders having voting power shall also have the power to adopt, amend or repeal the By-laws of this corporation.

(emphasis added).

Thus, even assuming arguendo that El Paso could demonstrate that it had established a policy of voluntarily disclosing the information which the Bylaw Amendment would require, this would still be insufficient to demonstrate that the Company has "substantially implemented" the proposal within the meaning of Rule 14a-8(i)(10). For example, in United Technologies Corporation (January 19, 2006) ("UTC"), the American Federation of State, County and Municipal Employees ("AFSCME") submitted a proposal to amend UTC's bylaws to provide for a majority vote standard in director elections. UTC argued, that it could omit the proposal under Rule 14a-8(i)(10) because it had already adopted "governance principles" which substantially implemented majority voting:

We believe that the adoption of the UTC Governance Principle as part of UTC's Corporate Governance Guidelines substantially implements, and compares favorably with, the AFSCME Proposal. The Board has exercised its judgment in crafting an appropriate governance change. The adoption of the change in the form of a governance principle, rather than as an amendment to the bylaws as advocated by the Proponent, does not diminish to any degree its effectiveness and importance as a governance provision. Not all significant governance rules, principles and practices are embodied in bylaws or certificates of incorporation.⁴

The Staff declined to concur in the company's view that it could exclude the proposal under rule 14a-8(i)(10). See also MeadWestvaco Corporation (January 12, 2006) (proposal to amend the company's certificate of incorporation or bylaws to provide for majority voting could not be excluded as substantially implemented based upon the company's amendment of its "Corporate Governance Principles."); Capital One Financial Corporation (January 12, 2006) (same); General Electric Company (January 12, 2006) (declining no-action relief where company received a proposal asking the board to take the necessary steps to amend the company's certificate of incorporation to provide for a majority vote standard and the company argued that it had already amended its "Governance Principles" in a manner which compared favorably to the proposed charter amendment); Gannett Co., Inc. (January 10, 2006) (declining no action relief where company argued that it could exclude proposal seeking amendment of company's bylaws or certificate to require majority voting in director elections as "substantially implemented" because the company had already adopted a "majority voting policy")⁵; Hewlett-Packard Company (January 5, 2006) (same); PG&E Corporation (February 28, 2002) (Staff denied no-action relief with respect to proposal requesting adoption of a bylaw that the board nominate independent directors to key board committees based on company's argument that "corporate governance guidelines" accomplished same result.).⁶

More fundamentally, the proposition that a bylaw enacted by shareholders is functionally the same thing as a "policy" adopted by a board of directors is a complete fallacy, and was recently refuted by a recent decision of the Delaware Court of Chancery, Unisuper Ltd. v. News Corp., No. 1699-N, 2005 WL 3529317 (Del. Ch. December 20, 2005) (attached hereto as Exhibit E). In Unisuper, News Corporation ("News Corp.") sought shareholder approval for a plan to reorganize as a Delaware Corporation. In order to quell the opposition of institutional investors which threatened to derail the planned reorganization, News Corp. promised not to extend its poison pill shareholder rights plan without first putting the extension to a shareholder vote and manifested its promise by adopting a "Board Policy". 2005 WL 3529317, at *2-3. However, News Corp. subsequently ignored its stated "policy" and reneged on its promise by unilaterally extending its poison-pill. Id. at *3. In response, shareholders brought suit in the Delaware Court of Chancery on October 7, 2005, seeking to invalidate News Corp.'s extension of its poison pill and to prohibit any further extensions absent shareholder approval. Plaintiffs alleged causes of action based upon theories of inter alia breach of fiduciary duty, fraud and contract. While upholding plaintiffs claims under a breach of contract theory, the Court of Chancery specifically noted that, in the absence of a separate contractual right, a "board policy" could simply be repealed or ignored by the board, noting that a "board policy... is a more transitory right than a charter provision" (Id. at *4 n. 39)⁷ and agreeing that "board policies, like board resolutions, are typically revocable by the board at will." Id. at *4. Expounding on this principle, the Court further stated:

This Court's statement about board policies in General Motors simply reiterates an elementary principle of corporate law: If the board has the power to adopt resolutions (or policies), then the power to rescind resolutions (policies) must reside with the board as well.

Id. at *5. See also 18 Am. Jur. 2d, Corporations, §259 ("A resolution is not a bylaw. It is an informal enactment of a temporary nature providing for the disposition of certain administrative business of the corporation."; 18 C.J.S. Corporations, §111 ("[A] resolution, unlike a bylaw, is an informal enactment of a temporary nature."); Fletcher Corp. Fms., §3265 (4th ed.) ("Any resolution intended to be of a permanent character should not be passed in the form of a resolution but should be in the form of an amendment or addition to the bylaws").

A bylaw validly enacted by shareholders cannot simply be repealed or ignored like a board enacted resolution or "policy." As noted above, El Paso's certificate and bylaws expressly provide that the board of directors' power and authority to amend the Company's bylaws is subject to the right of shareholders to amend the bylaws. Moreover, under Delaware law, "when shareholders exercise their right to vote in order to assert control over the business and affairs of the corporation the board must give way. This is because the board's power-which is that of an agent's with regard to its principal-derives from the shareholders, who are the ultimate holders of power under Delaware law." Unisuper Ltd. v. News Corp., No. 1699-N, 2005 WL 3529317, at *6 (Del.Ch., December 20, 2005) (emphasis added).

Accordingly, El Paso's argument that it has "substantially implemented" the Proposal - not by adopting a bylaw amendment to require specified disclosures - but because El Paso allegedly voluntarily disclosed related information in its 2005 proxy statement is frivolous. And even if El Paso could demonstrate that it has adopted guidelines, policies, principles or resolutions endeavoring to provide the requested disclosure (which it has not), it still would not have "substantially implemented" the Proposal consistent with the meaning of Rule 14a-8(i)(10).

II. El Paso Has Failed To Identify Any Formal Or Informal Rules, Guidelines, Policies, Resolutions Or Bylaws Which Concern The Disclosure Required by The Proposed Bylaw

Stripped of its verbiage, El Paso's "substantially implemented" argument relies entirely upon the Company's 2005 proxy statement, which the Company relies upon for the following conclusory propositions:

(1) "El Paso currently provides all of the compensation-related disclosures that the Proposal would require in...[a] section of its annual proxy statement" (No Action Request at 2);

(2) "El Paso's current policies, practices and procedures compare favorably with the executive compensation disclosures in the Proposal" (Id.);

(3) "El Paso already meets, and in fact exceeds the disclosure requirements recommended in the Proposal (No Action Request at 3); and

(4) "El Paso intends to continue to provide full and transparent disclosures regarding director and executive compensation." (Id.).

However, the No Action Request fails to identify any formal or informal Company policies, resolutions, guidelines or principles which support these broad assertions and a review of El Paso's Governance Documents (available at http://www.elpaso.com/govern/default.shtm) reveals that these statements are simply untrue.

In reality, El Paso does not have any "current policies, practices and procedures [which] compare favorably with the executive compensation disclosures in the Proposal." El Paso's website represents that: "[t]he principles approved by the board of directors in the Corporate Governance Guidelines, along with the charters of the board committees, provide the foundation for the governance of El Paso." However, the "Corporate Governance Guidelines" (attached hereto as Exhibit A) are entirely silent on the issue of executive compensation disclosure.⁸ Moreover, El Paso's "Compensation Committee Charter" (attached hereto as Exhibit B) merely states that the Compensation Committee "shall prepare and provide a report to stockholders of the Company on executive compensation for inclusion in the Company's annual proxy statement, in accordance with applicable rules and regulations of the SEC. (emphasis added). Thus, El Paso's "current policies, practices and procedures" merely aim to ensure compliance with the existing rules concerning disclosure of executive disclosure, which, as noted above do not require the disclosures which would be required by the Proposal.⁹ Accordingly, even if it were theoretically possible for El Paso to somehow substantially implement the Proposal without amending its bylaws (which it is not), the Company would still not be entitled to omit the Proposal in reliance upon Rule 14a-8(i)(10).

III. El Paso's 2005 Proxy Statement Did Not Disclosure The Information Required by The Proposed Bylaw Amendment

As discussed above, El Paso: (i) indisputably has not adopted a bylaw requiring the Company to disclose the value of retirement benefits awarded to its most senior executive officers; and (ii) demonstrably has not adopted any board policies or guidelines which embody a requirement (or a commitment) to disclose such information. El Paso's remaining argument - that the Company "substantially implemented" the Proposal simply because it voluntarily disclosed the information which the Proposal would require in its 2005 proxy statement - is preposterous.

Even if El Paso could demonstrate that the Company disclosed the information required by the Proposal in its 2005 proxy statement, El Paso's voluntarily disclosure of information on a single occasion - which the Proposal would require the Company to disclose prospectively - simply does not suffice to show that the Company has substantially implemented the Proposal. For example, while El Paso provided estimates of the pension plan value in its 2005 proxy statement, its 2004 proxy statement omits any such disclosure. There is simply no reasonable basis to conclude that the Company's future proxy statements will more closely resemble its 2005 statement rather than its 2004 statement.

Moreover, El Paso's assertions that it "currently provides all of the compensation-related disclosures that the Proposal would require" (No Action Request at 2) and that it "already meets, and in fact exceeds the disclosure requirements recommended in the Proposal" (No Action Request at 3) are demonstrably false. See, e.g., 2005 proxy statement at p. 31 ("The amounts reflected in this [potential total benefits] table do not reflect the balances, if any, that each individual may have vested in El Paso's Retirement Savings Plan. All amounts are for illustrative purposes only based upon amounts payable in the event of certain events of termination of employment as of December 31, 2004.") (emphasis added). Additionally, while the 2005 proxy statement includes information regarding contributions on behalf of individual executives to the Company's retirement savings plan, the Company did not disclose this information in prior years. Thus, it is impossible for shareholders to determine (or event to estimate) the balances of the executives' vested interests in the retirement savings plan. Accordingly, there simply no basis whatsoever for the Company to argue that it may exclude the Proposal as substantially implemented based upon its 2005 proxy statement.

Conclusion

For the foregoing reasons, we believe that Lucian Bebchuk's Proposal should be included in El Paso's 2006 Proxy Statement and that El Paso's request for no-action relief should be denied. As set forth above, there is simply no credible basis for El Paso's argument that it has substantially implemented the Proposal. We would be happy to provide the Staff with additional information or to further discuss these issues. Please feel free to call the undersigned at your convenience. In accordance with Rule 14a-8(j), we have enclosed six (6) copies of this letter. We have also enclosed an additional copy, which we ask that you kindly date-stamp and return to us in the enclosed, self-addressed stamped envelope.

Sincerely,

/s/

Michael J. Barry

cc: Lucian Arye Bebchuk (via overnight mail)

David F. Taylor, Esq. (via overnight mail)

-----FOOTNOTES-----

¹ Lucian Arye Bebchuk is the William J. Friedman and Alicia Townsend Friedman Professor of Law, Economics, and Finance at Harvard Law School. Mr. Bebchuk is author of numerous publications and scholarly papers on executive compensation, including: Bebchuk, L. and J. Fried, 2004, Pay without Performance: The Unfilled Promise of Executive Compensation, Harvard University Press, Cambridge, MA; Lucian A. Bebchuk and Jesse M. Fried, Stealth Compensation via Retirement Benefits, 1Berkeley Bus. L.J. 291, 314-316 (2004); Bebchuk, Lucian Arye and Grinstein, Yaniv, "The Growth of Executive Pay." Oxford Review of Economic Policy, Vol. 21, pp. 283-303, 2005; Bebchuk, Lucian Arye and Jackson, Robert J., "Executive Pensions (Earlier Circulated as Putting Executive Pensions on the Radar Screen)" (March 2005). Harvard Law and Economics Discussion Paper No. 507 http://ssrn.com/abstract=694766; Bebchuk, Lucian Arye and Grinstein, Yaniv, "Firm Expansion and CEO Pay" (November 2005). Harvard Law and Economics Discussion Paper No. 533 http://ssrn.com/abstract=838245.

² The bylaws of a corporation are "the self-imposed rules and regulations deemed expedient for ... the ... convenient functioning" of the corporation. Gow v. Consolidated Coppermines Corp., 165 A. 136, 140 (Del. Ch. 1933).

³ See also Frantz Manufacturing Co. v. EAC Industries, 501 A.2d 401, 407 (Del. 1985) ("The power to make and amend the bylaws of a corporation has long been recognized as an inherent feature of the corporate structure."); Hollinger Intern., Inc. v. Black, 844 A.2d at 1078 ("By its plain terms, §109 provides stockholders with a broad right to adopt bylaws 'relating to the business of the corporation, the conduct of its affairs, and its rights or powers or the rights or powers of its stockholders, directors, officers or employees.'") (citation omitted).

⁴ It is not uncommon for corporations to opportunistically argue exactly the opposite position to the Staff. See, e.g., Exxon Mobil Corporation (March 13, 2005) (granting no-action relief where company argued that "[i]t is one thing for a company to have a policy of independence regarding its chairman; it is quite another matter for a company to be in breach of its by-laws should the shareholders fail to elect sufficient independent directors, or should an independent director decline to serve as chairman.").

⁵ In Gannett Co. the company argued that "[t]he fact that Gannett has chosen to implement its substantially similar voting standard by way of a corporate policy rather than an amendment to its certificate of incorporation or bylaws does not change the fact that Gannett has substantially implemented the Proposal. The effect of the policy is substantially the same as if it were contained in Gannett's bylaws."

⁶ The three no-action letters cited by El Paso are wholly inapposite and lend no support to its erroneous argument that it has substantially implemented the Proposal. Texaco, Inc. (March 28, 1991) concerned a proposal which requested that Texaco "subscribe to a set of environmental guidelines which suggest implementing operational and managerial programs as well as making provision for periodic assessment and review." (March 28, 1991 letter from the Commission granting reconsideration request) (emphasis supplied). The Staff granted Texaco's request for reconsideration and issued its no-action letter after Texaco provided voluminous documentation of its own environmental policies and initiatives. Similarly, the shareholder proposal in Talbots, Inc. (April 5, 2002) requested that Talbots "commit itself" to the establishment of a "code of corporate conduct" based upon International Labor Organization workplace human rights standards. The Staff issued a no-action letter based upon Talbot's demonstration that it had already adopted a similar code of corporate conduct. Likewise, in The Gap, Inc. (March 16, 2001) the shareholder proposal "request[ed] that the Board of Directors prepare a report on the child labor practices of Gap suppliers." The Staff concluded that the company had substantially implemented the proposal because The Gap demonstrated that it had already established and implemented a comprehensive and multi-faceted "Vendor Code" which directly addressed the issues that were the subject of the requested report. Unlike the proposals in the above no-action letters, Mr. Bebchuk's Proposal does not request that El Paso: (i) subscribe to a set of guidelines; (ii) establish a code of corporate conduct; or (iii) prepare a report. To the contrary, the Proposal directly amends El Paso's bylaws to require specific executive compensation disclosure in El Paso's proxy statements.

⁷ Under Delaware law, bylaws are subordinate to the certificate of incorporation and statutory law, see Oberle v. Kirby, 592 A.2d 445,457-58 (Del. 1991); Prickett v. American Steel and Pump Corp., 253 A.2d 86, 88 (Del. Ch. 1969); State ex rel. Brumley v. Jessup & More Paper Co., 24 Del. 370 (1910); Gaskill v. Glady's Gelle Oil Co., 146 A. 337 (Del. Ch. 1929).

⁸ The only mention of executive compensation in El Paso's Corporate Governance Guidelines consists of general descriptions of the functions and duties of the Compensation Committee of the board and does not address or concern the Company's disclosure practices. See, e.g., Corporate Governance Guidelines at 5 ("The Compensation Committee will evaluate the performance of the Chief Executive Officer at least annually and report such evaluation to the Board."); Id. at 5-6 ("The Compensation Committee shall be responsible for reviewing the executive compensation program of the Company to ensure that it is adequate to attract, motivate and retain competent executive personnel and that it is directly and materially related to the short-term and long-term objectives of the Company and its stockholders, the operating performance of the Company and such other factors as deemed appropriate by the Compensation Committee.")

⁹ Moreover, while the No Action Request letter claims that El Paso "already meets, and in fact exceeds the disclosure requirements recommended in the Proposal" and "intends to continue to provide full and transparent disclosures regarding director and executive compensation" we note that El Paso's 2004 proxy statement did not substantially disclose information regarding to the value of retirement benefits received by its top executive officers. Thus, even if El Paso, could demonstrate that it disclosed the information required by the Bylaw Amendment (which, as discussed below, it cannot) on a single occasion in 2005, there is still no reason to presume that El Paso's future disclosures will contain such information.

[STAFF REPLY LETTER]

March 6, 2006

Response of the Office of Chief Counsel Division of Corporation Finance

Re: El Paso Corporation Incoming letter dated January 6, 2006

The proposal would amend the bylaws to require disclosure in the company's proxy statements of the estimated monetary value of benefits in which "named executive officers" had any vested rights as of the last day of the reported period under any pension, retirement or deferred compensation plan, including any supplemental executive retirement plan established by the company.

We are unable to concur in your view that El Paso may exclude the proposal under rule 14a-8(i)(10). Accordingly, we do not believe that El Paso may omit the proposal from its proxy materials in reliance on rule 14a-8(i)(10).

Sincerely,

/s/

Timothy Geishecker
Attorney-Adviser