The Senate Governmental Affairs Committee is investigating allegations of cronyism at the Federal Housing Finance Board.

In a letter to Finance Board Chairman Bruce A. Morrison, committee Chairman Fred Thompson requested information on how bank board executives are selected and on Mr. Morrison's authority to compensate them, among other issues.

The Tennessee Republican seeks to determine "whether the FHFB is fufilling its statutory mandates and is using its resources properly," according to the April 23 letter, which did not become public until reported by The Wall Street Journal on Thursday.

The Finance Board has until May 20 to respond. A spokesman for the agency, which regulates the Federal Home Loan Bank System, said it was complying with the request.

The Finance Board's operations have attracted attention since Lawrence U. Costiglio objected to his March 9 dismissal by President Clinton. Mr. Costiglio's five-year term on the board expired in 1995, but he stayed on, waiting for a successor to be named. Mr. Costiglio has accused Mr. Morrison of stacking the agency and the Home Loan banks with ideological allies. Senate Banking Committee Chairman Alfonse M. D'Amato called Mr. Costiglio's firing "legally dubious" and promised to investigate.

Mr. Morrison has denied the charges.

After evaluating the Finance Board's response, the committee could decide to hold hearings, request further documentation, examine statutory or regulatory problems with the agency, or drop the inquiry altogether.

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