Some of mine will pee on anything on the floor, too. A towel or their blankets. I am with them almost 24/7, so what I found works is as soon as they start to cock a leg, I verbally correct them and take them outside. It took time, but now if they forget and start to lift their leg, I make a ah oh sound and they run outside to pee. We have a dog door, so that helps, too. I rarely get peeing in the dog room anymore. The only one that still does is my old blind guy, I think sometimes he gets turned around and can't find the door. With him peeing on the blanket in the pen, that must be harder. I would take everything out and get a smaller crate and see if that helps.
Pam's Chihuahua Sanctuary