Obama faces major oversight test on executive pay

The Obama administration faces one of its first tests on its commitment to transparency from House Oversight and Government Reform Chairman Edolphus Towns (D-N.Y.), who is demanding answers on the administration’s pledge to curb executive pay.

Towns wrote Treasury Secretary Tim Geithner on Tuesday, demanding that the cabinet agency turn over information and records related to alleged plans to circumvent congressional provisions on executive pay by creating entities to serve as middlemen when doling out bailout funds.

“As you are no doubt aware, Congress sought to protect taxpayer funds used to bail out banks and other struggling companies by imposing conditions designed to prevent excessive compensation and to ensure that taxpayer funds will be repaid in the future,” Towns wrote in his letter. “I will strongly oppose any attempt to weaken or bypass these restrictions, or to violate the spirit, if not the intent, of these laws.”

The letter represents a test for both Obama and Towns, the former who promised transparency and responsiveness in his administration, and the latter who pledged aggressive oversight of the administration, despite both the White House and Congress being controlled by Democrats.

Towns explicitly asked Geithner in his letter whether or not the Treasury has considered methods to subvert congressional regulations on executive compensation, with answers due to the committee by Thursday, April 16.