Senators want details of Bear Sterns bailout

WASHINGTON (CNN) -- Key senators are asking questions about the recent pennies-on-the-dollar sale of investment firm Bear Stearns to JPMorgan Chase.

JPMorgan Chase was able to buy the troubled Wall Street firm 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," Sen. Max Baucus, D-Montana, said in a statement announcing a request for information.

Baucus is chairman of 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."

Baucus and Grassley co-authored a letter Wednesday to Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke, and the top executives at Bear Stearns and JPMorgan Chase, giving them until Friday to hand over detailed information on the Bear Stearns transaction.

A committee aide did not immediately know if lawmakers might try to block the deal if they are unhappy with their findings.

In the letter, which also went to the head of the Federal Reserve Bank of New York, the senators asked for details of the Bear Stearns assets the Federal Reserve agreed to secure and other pertinent specifics of the transaction -- some of which are still evolving in the wake of JPMorgan Chase's announcement Monday that it was raising its offer for Bear Stearns from $2 a share to roughly $10.

As part of the deal, the Federal Reserve guaranteed up to $29 billion of Bear Stearns' assets. E-mail to a friend

All About Economic Issues • U.S. Senate Committee on Finance