March 26, 2008

Senators question suspicious Bear Stearns deal

Senators Max Baucus and Charles Grassley are questioning the suspicious sale of investment firm Bear Stearns to JPMorgan Chase.

The transaction for pennies-on-the-dollar was made possible after the Federal Reserve backed it with billions in taxpayer dollars.

"Economic times are tight on Main Street as well as Wall Street, and we have a responsibility to all taxpayers to review the details of this deal," Max Baucus, D-Montana, said in a statement announcing a request for information. Baucus chairs the Senate Finance Committee.

Sen. Charles Grassley, R-Iowa, the top Republican on that committee, said Congress has a responsibility to "look at whether taxpayers will lose money here, what kind of precedent this sets for federal involvement when other firms overextend themselves, how this will affect the marketplace in other direct and indirect ways and whether top executives will come out better than the rank-and-file workers who weren't in the room negotiating the deal."