S&P testifies administration threatened payback after downgrade; calls lawsuit retaliation

Timothy Geithner, President Obama

A financial giant has filed shocking court pleadings claiming the Obama administration brought a sham lawsuit against it in retaliation for a credit downgrade it had made against the government two years ago.

The government brought a lawsuit against Standard & Poors, seeking $5 billion in fines for the credit rating it had attached to bonds supported by subprime mortgages in the years leading up to the financial crisis, according to CNN.

Lawyers for McGraw-Hill, Standard & Poors’ parent company, filed an affirmative defense Tuesday, claiming that the government lawsuit lacks merit and was filed to punish the firm for its U.S. creditworthiness downgrade during the 2011 debt ceiling debate.

“Only S&P Ratings downgraded the United States and only S&P Ratings has been sued by the United States, even though the S&P ratings challenged by the United States were no different than those of at least one other rating agency,” court filing states. It also said that the firms ratings are protected by First Amendment freedom of speech, making the government’s lawsuit unconstitutional.

To support its claims, Standard & Poors submitted an affidavit from McGraw-Hill’s chairman, Harold McGraw III, regarding a threatening phone call he’d received from then-Treasury Secretary Timothy Geithner mere days after the downgrade, according to Fox News host Megyn Kelly.

“[Geithner said that, ‘you have done an enormous disservice to yourselves and to your country,” the sworn written testimony says. “S&P’s conduct would be ‘looked at very carefully’ he [Geithner] said. Such behavior could not occur, he said, without a response from the government.”

Standard & Poors is calling the government lawsuit against it “impermissibly selective, punitive and meritless litigation,” according to the court documents filed Tuesday.

In short, they claim it’s political payback by a vindictive Obama administration.

Kelly invited Jay Sekulow, chief counsel for the American Center for Law and Justice, and Chris Stirewalt Fox News Digital Politics Editor, to appear on “The Kelly File.”

Stirewalt described McGraw as a “serious individual,” one not likely to make such claims lightly. “He ain’t Glenn Beck,” he quipped.

Watch the exchange, via Fox News, then check out “Sean Hannity says he may move to Florida; Cuomo can keep liberal NY.”


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