AP Photo/Carolyn Kaster
But the ratings agencies also exert sway on policy the old-fashioned way: by lobbying. S&P's parent company, McGraw-Hill, has spent over $11 million on lobbying in the past 15 years,the Washington Post reports. And it lobbies the government while continuing to rate its creditworthiness.
S&P spent at least $1 million on legislation specifically related to its business. Recently, the firm and its fellow credit-rating agencies--Moody's and Fitch--have been fighting a provision in the 2010 Dodd-Frank financial reform law that makes it possible to sue ratings firms for negligence if they offer faulty ratings. The agencies want to go back to a world where investors who make decisions based on their ratings--like those AAA ratings they slapped on the non-prime mortgage securities that helped cause the financial crisis--are out of luck.
And these aren't just any lobbyists. S&P's stable of high-powered advocates includes Tony Podesta, a prominent Washington mover and shaker whose brother John ran the transition team for the Obama administration, and Douglas Nappi, who has worked for the Senate Banking Committee and the Securities and Exchange Commission.
All three agencies say their ratings and lobbying operations are kept separate from each other.