DOJ Probe of S&P - Payback for Downgrade?

Posted: Aug 18, 2011 12:01 AM

Something just doesn't seem right. It appears the Department of Justice has launched a probe of the nation's largest credit ratings firm, Standard & Poor's. As I told Martha MacCallum on Fox News, the timing of this development certainly raises a few questions.

Just two weeks ago, S&P expressed the ultimate concern about our economy by cutting the U.S. credit rating from a perfect AAA to AA+. First time that's happened in the nation's history. At the same time, two other ratings agencies, Fitch and Moody's, expressed concern as well about the country's economic problems, but did not issue a downgrade.

Now, there are detailed reports by news organizations that the Justice Department is probing S&P. The DOJ won't comment, of course. But the only credit ratings agency in the government's legal crosshairs right now appears to be S&P.

Why now? Why not in 2008? That's when the mortgage crisis really began and fueled what many believe created what we have today - an economic house-of-cards that is on the verge of collapse.

As a former tax attorney who once worked for the Treasury Department, I certainly understand the argument advanced by many that all of the ratings agencies should have been under scrutiny three years ago when this mortgage mess began to unfold.

Granted, we don't know what's taking place behind the scenes, and with the DOJ not talking, we're left with just appearances. But, I'm not sure I like what I see. The timing of all of this seems suspect to me.

Do we have a politically-motivated Department of Justice that's retaliating for S&P's decision to downgrade the U.S. credit rating? Or, do we have a responsible Justice Department that's just doing its job, maybe a little late, but acting without retribution?

Coincidence or payback? Stay tuned.