Author Topic: S&P Tells Judge: Obama, Geithner Wanted Payback for US Downgrade  (Read 361 times)

0 Members and 1 Guest are viewing this topic.

Offline happyg

  • Hero Member
  • ****
  • Posts: 11,822
S&P Tells Judge: Obama, Geithner Wanted Payback for US Downgrade
« on: February 25, 2014, 11:09:35 AM »
Standard & Poor’s said a meeting between President Barack Obama and his treasury secretary in 2011 just before the company was warned to expect a response to its downgrade of U.S. debt justifies its need to see White House communications to defend itself against fraud claims.

The timing of the conference between Obama and then-U.S. Treasury Secretary Timothy Geithner, memorialized in his own calendar records, before Geithner voiced his anger about the downgrade to McGraw Hill Financial Inc. Chairman Harold W. McGraw III may support S&P’s claim that the fraud lawsuit the Justice Department filed against it last year was retaliation, the company said today in a filing in federal court in Santa Ana, California.

The government seeks as much as $5 billion in civil penalties for losses to federally insured banks and credit union who relied on the S&P’s claims that its ratings of residential mortgage-backed securities and collateralized-debt obligation, prior to the collapse of the U.S. housing market, were free of conflicts of interest.

S&P has said it gave the same ratings as Moody’s Corp. to those securities and was singled out by the Justice Department because it was the only credit rating company to downgrade the U.S. in August 2011. Geithner met with Obama the morning of Aug. 8, 2011, three days after the downgrade, S&P said in its filing.

“Immediately after his meeting with the President, Secretary Geithner returned to his office and, at 10:15 a.m., he called Mr. McGraw personally,” S&P said, citing Geithner’s calendars available on the Treasury Department’s website. The calendar entries don’t reflect what was discussed. “On that call, Secretary Geithner stated to Mr. McGraw that S&P had done an ‘enormous disservice to yourselves and to your country.’”

‘Fishing Expedition’

The Justice Department said last month that S&P’s quest for White House records was a “fishing expedition” and urged U.S. District Judge David Carter to deny the rating company’s request to force the government to hand over the information.

The government alleged in its Feb. 4, 2013, complaint that S&P knowingly downplayed the risk on securities before the credit crisis to win business from investment banks seeking the highest possible ratings to help them sell the instruments. The Justice Department has denied any connection between the downgrade and the lawsuit.

Ellen Canale, a spokeswoman for the Justice Department, had no immediate comment on today’s filing. Jay Carney, White House press secretary, didn’t immediately respond to an e-mail seeking comment.

“The allegation that former Secretary Geithner threatened or took any action to prompt retaliatory government action against S&P is false,” Jenni LeCompte, a spokeswoman for Geithner, said in an e-mailed statement last month.

The case is U.S. v. McGraw Hill Financial Inc., 13-779, U.S. District Court, Central District of California (Santa Ana).


Read Latest Breaking News from Newsmax.com http://www.newsmax.com/Newsfront/s-p-lawsuit-retaliation-downgrade/2014/02/25/id/554537#ixzz2uLo6fkRW
 Urgent: Should Obamacare Be Repealed? Vote Here Now!

Online Oceander

  • Technical
  • Hero Member
  • ****
  • Posts: 44,073
  • #ToldYouSo
Re: S&P Tells Judge: Obama, Geithner Wanted Payback for US Downgrade
« Reply #1 on: February 25, 2014, 01:29:10 PM »
interesting, although such a request by S&P would be better if couched in terms of a counterclaim for abuse of process or malicious prosecution, rather than simply as a defense to alleged fraud; after all, if S&P did, in fact, commit the alleged fraud (not sayin' they did or did not), then the motive for bringing this suit against it is not particularly relevant.

Offline truth_seeker

  • Hero Member
  • ****
  • Posts: 17,096
  • Common Sense Results Oriented Conservative Veteran
    • The place where argument addicts can go
Re: S&P Tells Judge: Obama, Geithner Wanted Payback for US Downgrade
« Reply #2 on: February 25, 2014, 01:56:16 PM »
A few years prior to this, the rating agencies were giving top marks to toxic mortgage backed securities.

They should have been sued clear out of business, for knowingly committing fraud, over that.

Downgrading the US Govt. securities was an act, to reestablish their "credibility."

Online Oceander

  • Technical
  • Hero Member
  • ****
  • Posts: 44,073
  • #ToldYouSo
Re: S&P Tells Judge: Obama, Geithner Wanted Payback for US Downgrade
« Reply #3 on: February 25, 2014, 02:02:49 PM »
A few years prior to this, the rating agencies were giving top marks to toxic mortgage backed securities.

They should have been sued clear out of business, for knowingly committing fraud, over that.

Downgrading the US Govt. securities was an act, to reestablish their "credibility."

I'm not so sure the poor grading given earlier was fraudulent, or simply out of negligence, even if gross; but in any event, if there is a colorable, good-faith basis for the claims they're being sued on, then the motives for bringing those claims are largely irrelevant.  If Person A causes a traffic accident with Person B, Person B is still entitled to sue Person A even if he - Person B - hates A's guts and would probably not have sued if he'd been friends with A instead.

Offline Gazoo

  • Inactive Members
  • Hero Member
  • ****
  • Posts: 3,968
Re: S&P Tells Judge: Obama, Geithner Wanted Payback for US Downgrade
« Reply #4 on: February 25, 2014, 02:04:22 PM »

When they attack/litigate S&P for daring to downgrade the U.S. when the long legged mack daddy, self appointed mob King, is President. They will attack/bully anyone.

We have radical mob-ruling thugs in our White House and no one cares because Obama happens to be half-black. If Obama were white would he be impeached by now?
"The Tea Party has a right to feel cheated.

When does the Republican Party, put in the majority by the Tea Party, plan to honor its commitment to halt the growth of the Federal monolith and bring the budget back into balance"?


Share me

Digg  Facebook  SlashDot  Delicious  Technorati  Twitter  Google  Yahoo
Smf