“We are now living in the America that we warned our fellow citizens could come to pass if President Obama were re-elected,” he wrote on his website.
Harold McGraw III, CEO of McGraw Hill, the parent company of Standard and Poor claims that his company is a victim of retaliation by Obama's DOJ for downgrading the county's credit rating. Both Moody's and S&P were under investigation for issuing poor guidance leading up to the 2008 financial meltdown however after S&P downgraded US debt the investigation of S&P ramped up and the investigation of Moody's was closed.
In an affidavit McGraw states that he was warned by then Secretary of Treasury Timothy Geithner that he could expect bad things to happen. A chronology that was stapled to McGraw's affidavit states:
Mr. Geithner expressed anger at the downgrade. In the course of ourIt sort of reminds me of a classic movie confrontation: "I can't remember the last time that you invited me to your house for a cup of coffee." or "Sorry about the pretty fish."
discussion, he referred to an asserted two trillion dollar error in S&P’s work, an error that he had
described in various discussions with the media following the announcement of the downgrade.
Having been briefed on the issue by S&P personnel in the wake of those statements by Mr.
Geithner, I explained to him that in relying on Congressional Budget Office figures, as it had,
S&P had not made an error. Mr. Geithner said that S&P had made a huge error and that “you are
accountable for that.” He added that S&P had a previous history of errors and that this was not
the first mistake it had made.
As I reported contemporaneously to my colleagues, he said that “you have
done an enormous disservice to yourselves and to your country”, that the U.S. economy was bad
and that the downgrade had done real damage. S&P’s conduct would be “looked at very carefully” he said. Such behavior could not occur, he said, without a response from the government.
About the only agreement in the media is that the case is probably two years away from settlement but McGraw does not seem to be in any mood to plea bargain. He has elevated it to a First Amendment case and is demanding discovery of communication between Treasury and DOJ. I strongly encourage you to read the motion. It begins:
A. The United States Must Produce Documents Relating to theUnder section C it states:
Independence or Objectivity of Ratings or Rating Agencies. .............. 3
B. The United States Must Produce Documents Relating to the
Conduct of Mortgage Lenders, Financial Institutions and
Issuers of the Securities at Issue. ........................................................ 12
C. The United States Must Produce Documents Relevant to
S&P’s First Amendment Retaliation Defense. ................................... 16
S&P asks this Court to compel just the same sort of discovery that JudgeThis could get exciting!
Kelleher ordered on just the same sort of affirmative defense: discovery as to
documents from the highest levels of the government and the DOJ concerning the
decision to commence a litigation that was arguably filed to punish those whose
speech offended the government.
1 comment:
I had not heard of D'Souza's indictment until I read it here. Yes, this is suspicious.
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