While Standard & Poor’s was downgrading U.S. debt, it was spending millions on a lobbying campaign to limit federal oversight and protect its role in financial markets. McGraw-Hill, S&P’s parent company, spent more than $11 million on lobbying during the past 15 years, including at least $1 million on S&P-related legislation,
The Washington Post reported.
The firm’s employees also have given more than $500,000 in contributions to federal candidates since 1989, primarily to Democrats, according to an analysis of federal disclosure records by the Sunlight Foundation. S&P, Moody’s Investors Service and Fitch Ratings, the country’s two other top rating firms that pass judgment on the government’s credit worthiness, have spent more than $16 million on lobbying related to financial legislation, the Post reported.
Craig Holman, government affairs lobbyist for Public Citizen, told the Post that S&P effectively serves a “quasi-governmental” function because of the power it has in shaping major economic policies.
“S&P wields a huge club over Congress and the president because the company can simply dictate public policies that have huge ramifications for the country and for the government,” the Post quoted Holman as saying. “Its influence over the government’s purse can easily be employed as a powerful tool to win concessions from the federal government that are in S&P’s own interest rather than the public’s interest.”
Officials with all three ratings companies maintain their financial analysts are walled off from lobbyists. “Our analysts convey independent opinions about creditworthiness to the market using rigorous analytical criteria,” McGraw-Hill’s Patricia Rockenwagner told the Post. “Our lobbyists express views about public policy to the government. There is a strict firewall that separates the two — always has been, always will be.”
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