NEW YORK: The United States, which is suing Standard & Poor’s (S&P) for US$5 billion (RM15.8 billion) over its credit ratings, said on Monday it is confident that documents the rating agency wants for its defence will not show that the suit was filed in retaliation for a downgrade of the country’s debt.
In a filing with the District Court in Santa Ana, California, the Department of Justice said S&P’s “general suspicions” do not justify the rating agency’s request for the release of dozens of unredacted documents, including materials from former treasury secretary Timothy Geithner.
The Justice Department said it has submitted the documents to judge David Carter, and is “confident” that his review will prove they “do not support the defendants’ allegations of retaliation in any way”.
Indeed, the Justice Department added in a footnote: “The US believes that the redacted information in certain documents would affirmatively rebut S&P’s claims.”
Other material was redacted because it was privileged or irrelevant.
A hearing is set for September 9.
S&P, a unit of New York-based McGraw Hill Financial Inc, has said the government singled it out for a suit after it took away the US’ “triple-A” rating on August 5 2011.
The US$5 billion suit filed in February last year accused S&P of issuing inflated ratings before the 2008 financial crisis to win
more fees from issuers, and failing to downgrade debt backed by
mortgage-backed securities fast enough.
Harold McGraw, the chairman of McGraw Hill, has said Geithner angrily told him on August 8 2011, three days after the downgrade, that the downgrade was based on a “huge” error, and that the company would be held “accountable”.
S&P has said its ratings are opinions protected by the Constitution’s First Amendment. Reuters