House Oversight and Government Reform Committee Chairman Edolphus Towns is asking Treasury Secretary Timothy Geithner to prove he is holding bailed-out companies accountable to executive compensation standards.
In a letter released Tuesday, the New York Democrat asked Geithner to explain reports that the Treasury has set up special entities to serve as middlemen that would receive federal bailout funds and then channel the money to corporate recipients to avoid restrictions on executive pay and requirements that the government obtain an ownership interest in bailed-out firms.
"I hope these allegations are not true," Towns wrote, demanding a written response by 4 p.m. on April 16.
"It would be unconscionable and irresponsible for the Treasury Department to permit excessive pay practices to continue at companies that have been rescued by the taxpayers," he wrote.
A Treasury spokesman said the agency "is currently drafting the executive compensation rules that will clarify how the legislation applies. We look forward to working with Congress as we move forward."