Varney: Geithner's Threat Undermines 'Objective Financial Analysis'

Wednesday, 22 Jan 2014 11:19 AM

By Wanda Carruthers

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The federal government is "undermining objective financial analysis" if it's true that former Treasury Secretary Tim Geithner threatened Standard & Poor's chief Harold McGraw after his financial ratings agency downgraded the U.S. credit rating in 2011, Stuart Varney said on Fox News on Wednesday.

Varney, a Fox News business contributor, explained McGraw, chairman of McGraw-Hill Financial, said Geithner made the threat three days after S&P downgraded the U.S. triple-A credit rating in August 2011.

"Monday morning, Aug. 8, the man who runs S&P, Harold McGraw, gets a phone call from Tim Geithner. Tim Geithner is mad. He's the Treasury Secretary. 

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"He says, 'You guys have got this wrong.' Harold McGraw stands his ground and says, 'We are right.'

"Geithner says, 'There will be a response from the government. You will be accountable.'
"Along comes a $5 billion lawsuit against Standard & Poor's," Varney explained.

The federal government charged S&P with fraud in its $5 billion lawsuit, according to Fox News. McGraw made the claim Monday in a response to the federal lawsuit. Varney explained a spokesman for Geithner said the "reports of retaliation are false."

Varney maintained ratings agencies are "supposed to give objective financial judgment," and should not be under intimidation for their observations. To do so would "damage the whole idea of objective financial analysis," he said.

"They are supposed to say objectively how a company, or a government, is doing. You are not supposed to threaten or intimidate a ratings agency," Varney said.

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