Report of Independent Registered Public Accounting Firm


To the Board of Directors and Shareholders of
Flaherty & Crumrine Preferred Income Opportunity Fund Incorporated:

In planning and performing our audit of the financial statements of
Flaherty & Crumrine Preferred Income Opportunity Fund Incorporated as of
and for the year ended November 30, 2006, in accordance with the
standards of the Public Company Accounting Oversight Board (
United States), we considered its internal control over financial
reporting, including control activities for safeguarding securities, as a
basis for designing our auditing procedures for the purpose of expressing
our opinion on the financial statements and to comply with the
requirements of Form N-SAR, but not for the purpose of expressing an
opinion on the effectiveness of Flaherty & Crumrine Preferred Income
Opportunity Fund Incorporated's internal control over financial
reporting. Accordingly, we express no such opinion.

The management of Flaherty & Crumrine Preferred Income Opportunity Fund
Incorporated is responsible for establishing and maintaining effective
internal control over financial reporting. In fulfilling this
responsibility, estimates and judgments by management are required to
assess the expected benefits and related costs of controls. A company's
internal control over financial reporting is a process designed to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with U.S. generally accepted accounting
principles. Such internal control includes policies and procedures that
provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use or disposition of a company's assets
that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to
the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or
procedures may deteriorate.

A control deficiency exists when the design or operation of a control
does not allow management or employees, in the normal course of
performing their assigned functions, to prevent or detect misstatements
on a timely basis. A significant deficiency is a control deficiency,
or combination of control deficiencies, that adversely affects the
company's ability to initiate, authorize, record, process or report
external financial data reliably in accordance with U.S. generally
accepted accounting principles such that there is more than a remote
likelihood that a misstatement of the company's annual or interim
financial statements that is more than inconsequential will not be
prevented or detected. A material weakness is a significant
deficiency, or combination of significant deficiencies, that results
in more than a remote likelihood that a material misstatement of the
annual or interim financial statements will not be prevented or detected.

Our consideration of Flaherty & Crumrine Preferred Income Opportunity
Fund Incorporated's internal control over financial reporting was for
the limited purpose described in the first paragraph and would not
necessarily disclose all deficiencies in internal control that might
be significant deficiencies or material
weaknesses under standards established by the Public Company
Accounting Oversight Board (United States). However, we noted no
deficiencies in Flaherty & Crumrine Preferred Income Opportunity Fund
Incorporated's internal control over financial reporting and its
operation, including controls for safeguarding securities, that we
considered to be a material weakness as defined above as of
November 30, 2006.

This report is intended solely for the information and use of
management and the Board of Directors of Flaherty & Crumrine
Preferred Income Opportunity Fund Incorporated and the Securities and
Exchange Commission and is not intended to be and should not be used
by anyone other than these specified parties.


/s/ KPMG LLP

Boston, Massachusetts
January 17, 2007