Sen. Chuck Grassley (R-IA) just released a letter to White House budget director Peter Orszag that makes a pretty eyebrow-raising claim: The special inspector general charged with overseeing the $700 billion in TARP funds for Wall Street is getting the run-around from the administration as he seeks more information from banks getting bailout money.

According to Grassley, Orszag's Office of Management and Budget (OMB) originally gave Neil Barofsky, the TARP inspector general, freedom to seek information from bailout-participating banks without being subject to the requirements of a law called the Paperwork Reduction Act that aims to limit government agencies' ability to collect third party information.

But then, for reasons unbeknownst to Grassley or Barofsky, it seems that OMB went back on its decision. As Grassley states in his letter:

[M]oments after providing notice to [Barofsky's office] that it would be allowed to proceed with its letter of inquiry to TARP recipients, OMB withdrew the emergency approval it had granted just a few minutes earlier.

It is my understanding that at this time, OMB is requiring [Barofksy] to post a proposed letter of inquiry to TARP recipients for 15 days, wait for comments, and then justify to OMB that it has taken into account the public comments in redrafting the inquiry letter. This is unacceptable.

We have a call into OMB to ask for comment on whether Barofsky is indeed being required to abide by the Paperwork Reduction rules. Here are the straightforward queries that the inspector general was asking of bailout recipients in the first place:

a) a narrative response outlining their use or expected use of TARP funds; b) copies of pertinent supporting documentation (financial or otherwise) to support such a response; c) a description of their plans for complying with applicable executive compensation restrictions; d) certification by a senior executive officer of each company as to the accuracy of all statements [above]

More from Grassley on the developing mystery:

This is very disturbing, especially in light of President Obama's pledges of unprecedented openness and transparency. OMB's decision appears directly contrary to this administration's promise to administer TARP with a new level of transparency and accountability never before seen in Washington.

I am not convinced that the Paperwork Reduction Act applies to the [TARP inspector general] under these circumstances. However, if OMB believes its hands are tied by the statute and that there is no way of avoiding these delays without a legislative fix, then I would have expected OMB to propose to Congress legislative language exempting [the TARP inspector general] from the Paperwork Reduction Act. No such proposal has been made.

Late Update: Looks like a case of crossed wires ... an OMB official says that the inspector general's request for approval of an expedited review under the Paperwork Reduction Act was granted.