I don't have any formal training in dog training, this reply is based on my personal experience teaching dogs basic manners.
Has your dog always peed on the carpet at night, or is this a recent occurrence? A dog that used to be house trained but suddenly starts eliminating indoors could have a medical problem and should be assessed by a veterinarian. However, barring any medical problems, a four year old dog should be able to hold their bladder overnight, provided that they get a chance to empty their bladder right before bedtime.
I'm not sure if the towel makes a difference, but the dog should be discouraged from peeing inside and, more importantly, encouraged to pee outdoors. Offer plenty of praise when the dog pees in an appropriate area. If you happen to catch the dog urinating on the carpet, make it clear that this is unacceptable behavior (e.g. by saying "no" or "ah-ah") and immediately lead the dog to the area where you want them to pee (outside). If the dog then does its business in the appropriate area offer plenty of praise.
As long as the dog keeps peeing indoors and until the dog learns where it is appropriate and not appropriate to eliminate, if possible it is best to keep them away from the areas where they tend to pee indoors. In your case this seems to be the carped areas of your home.
Regarding the towel, as long as the dog perceives that it is okay to pee on the carpet this behavior will likely continue, towel or no towel. The difference between the towel in this case and pee pads is that pee pads are offered as an appropriate pee area, and when training dogs to use pee pads they are actively encouraged to eliminate on them.
I hope this gives you a couple of ideas on how to deal with this problem.
Good luck!
He does it wrong on purpose so that you'll tell him to stop cleaning it up because you'll do it right yourself. Then he doesn't have to clean up the pee anymore.
Lol! Sound about right.