Play Live Radio
Next Up:
0:00
0:00
Available On Air Stations

S&P Accuses U.S. Of Suing To Retaliate For Credit Downgrade

The Justice Department claims Standard & Poor's knew that billions of dollars of mortgage-backed securities were junk but still gave them positive ratings.
Emmanuel Dunand
/
AFP/Getty Images
The Justice Department claims Standard & Poor's knew that billions of dollars of mortgage-backed securities were junk but still gave them positive ratings.

In a court filing, Standard & Poor's is accusing the U.S. government of using the Justice Department to retaliate for the agency's decision to downgrade U.S. debt in 2011.

The accusation by S&P was made while it tried to defend itself in a lawsuit filed against it by the U.S. government, which alleges S&P knew that billions of dollars of mortgage-backed securities were junk, but still gave them positive ratings.

The Wall Street Journal reports:

"S&P has previously indicated that it believes the U.S. lawsuit was politically motivated, but the language in Tuesday's court filing is its strongest to date.

"The Justice Department 'commenced this action in retaliation for [S&P's] exercise of their free speech rights with respect to the creditworthiness of the United States of America,' lawyers for S&P wrote in court documents filed Tuesday in the U.S. District Court for the Central District of California."

The Justice Department told the Journal that the accusations were "preposterous."

CNN Money reports that the Justice Department rejected the notion the day it announced the lawsuit against S&P:

"At a news conference at the time the suit was filed, Justice Department officials denied there was any connection between S&P's downgrade and the suit being filed. They said the probe into S&P's ratings on subprime mortgages started in 2009. They would not comment at the time whether any other credit agency faced similar legal action."

Copyright 2021 NPR. To see more, visit https://www.npr.org.

Eyder Peralta is NPR's East Africa correspondent based in Nairobi, Kenya.
To make informed decisions, the public must receive unbiased truth.

As Southwestern Pennsylvania’s only independent public radio news and information station, we give voice to provocative ideas that foster a vibrant, informed, diverse and caring community.

WESA is primarily funded by listener contributions. Your financial support comes with no strings attached. It is free from commercial or political influence…that’s what makes WESA a free vital community resource. Your support funds important local journalism by WESA and NPR national reporters.

You give what you can, and you get news you can trust.
Please give now to continue providing fact-based journalism — a monthly gift of just $5 or $10 makes a big difference.