Standard and Poor, and Broken Government

Standard and Poor has been a major topic in the news recently, thanks to their decision to downgrade the US credit rating. Credit Rating agencies, like Standard and Poor, have spent 1.76 million dollars on lobbying so far this year. Most of this lobbying has been on laws applying to Dodd-Frank ( The US Chamber of Commerce is currently trying to bring a lawsuit to courts against Dodd-Frank). The three top rating agencies have spent $10 million on lobbying in the last 9 years. S&P has spent 1.5 million of this and even contributed 33,000 dollars to Barack Obama’s campaign.

Harold McGraw III is the chairman of S&P’s parent company, and he has repeatedly donated large sums to Democratic Congressman Charles Rangel and Democratic Senator Kristen Gillibrand. He also gave $5,000 to the National Leadership PAC that uses money to give to several different Democratic House candidates, along with Senator Kristen Gillibrand.

Standard and Poor has already spent $600,000 on lobbying this year. Podesta Group is one of the larger lobbying firms they have contract with Standard and Poor. Podesta spent30 million dollars on lobbying last year. Podesta Groupalso lobbied the United States Government for former Egyptian dictator Hosni Mubarak (not hard to see why it took so long for the Obama administration to withdraw support for the dictator). They also represent other boy scouts like Bank of America, BP, Boeing, BlueCross, GM, Google, and Lockheed Martin. Tony Podesta was ranked the third most influential lobbyist in Washington in 07.

Standard and Poor’s statement on the downgrade emphasized (certainly more than government debt) a broken political system (or as the Economist puts it, they were “downgrading our politics”). What they (the Economist doesn’t either) don’t mention is why it’s broken, special moneyed interests. This past week, Republican Jean Schmidt’s ethic charges were dropped on a technicality, however, according to the Office of Congressional Ethics, the charges against Schmidt revolved around approximately $500,000 in legal bills that the Turkish Coalition of America paid for the lawmaker. Democrat Mel Watt has decided to just make life easier on himself and his colleagues and is moving to try tocut the Ethics Committee by 40%. Meanwhile, Congress’ disapproval rating is at 82%, the lowest in history. It is not hard to see why. S&P is right, government is broken, but they helped make it that way.

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