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Tuesday, February 25, 2014

S&P Tells Judge: Obama, Geithner Wanted Payback for US Downgrade -- NewsMax

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.

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