Washington D.C. (August 9, 2011) -- Congressman Dennis Kucinich (D-OH) today wrote the Chairman and CEO of McGraw-Hill Companies, the parent company of Standard and Poor's (S & P), requesting documents concerning a potential conflict of interest regarding S & P's unilateral decision to downgrade the credit rating of the United States of America.
According to their 2010 Annual Report, McGraw-Hill held $1.5 billion in "cash and equivalents" as of December 31, 2010. It is likely that some or all of McGraw-Hill's "cash and equivalents" are invested in U.S. securities, as is frequently the case with U.S. corporations.
McGraw-Hill's Standard & Poor's division issues credit ratings on any U.S. securities in which McGraw-Hill has invested. Standard & Poor's ratings have an effect on the value of those securities and an effect on the value of McGraw-Hill's holdings, creating an inherent conflict of interest.
" Until very recently, this inherent conflict of interest has not been an issue, because all credit rating agencies have consistently given U.S. securities their highest rating. Last Friday, Standard & Poor's alone decided to lower its credit rating of the United States for the first time in history. I am concerned that this decision, which stands in sharp contrast to the actions of Moody's and Fitch, may have been influenced by the financial concerns of McGraw-Hill," wrote Kucinich.
"I am, therefore, requesting that, within the next two weeks, you provide documentation of all investments by McGraw-Hill or its subsidiaries in treasury notes and other securities of the United States, or in money market funds that invest in those securities"
"I look forward to receiving that documentation. If I do not, I will have to conclude that there is something that McGraw-Hill is hiding, and that a thorough investigation of this inherent conflict of interest is warranted."
Congressman Kucinich is the Ranking Member of the Subcommittee on Regulatory Affairs, Stimulus Oversight and Government Spending of the Oversight and Government Reform Committee.
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