Although Media Matters poo pooed the very idea that Obama’s DOJ would engage in retribution for the downgrade, maybe now that distrust in government is suddenly in vogue, we should take another look at that lawsuit.
“Why not Moody’s? Why not Fitch?” John Berlau of the American Spectator wondered.
Of all the questions raised by the U.S. government’s strange case against Standard & Poor’s — a lawsuit that actually asserts that some of the nation’s largest banks were S&P’s “victims,” and that the credit rating firm somehow fooled these banks about products the banks actually created — the lack of similar actions against S&P competitors still rings the most alarm bells.
S&P, Fitch and Moody’s all gave AAA rating to many packages of subprime mortgages that imploded. But of those three, only S&P downgraded the U.S. government from its decades-old AAA credit rating.
Floyd Abrams, the attorney representing S&P’s parent company McGraw-Hill in the litigation and a veteran First Amendment lawyer (and yes, the First Amendment is a strong concern here, as I will get to in a second), has said that the government ramped up its investigation of S&P shortly after the downgrade in 2011. “Is it true that after the downgrade the intensity of this investigation significantly increased? Yeah,” Floyd Abrams, S&P’s lead attorney, told CNBC in an interview last week. “We don’t know why.”
I bet we can make an educated guess why.
Full report, here.