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McGraw Family (Owners of S & P) are Longtime Intimates of the Bush Family

COMMENT: Stan­dard and Poor’s is owned by pub­lish­ing giant McGraw-Hill. In the wake of S & P’s down­grade of U.S. bonds’ rat­ing from AAA (for the first time in his­to­ry), it comes as no great sur­prise that the McGraw fam­i­ly are long time asso­ciates of the “Fam­i­ly of Secrets.”

This mul­ti-gen­er­a­tional asso­ci­a­tion goes back to the 1930’s, when Joseph and Per­me­lia Pry­or Reed (daugh­ter of Bush/Walker asso­ciate   Samuel Pry­or), estab­lished Jupiter Island as a play­ground for the North­east­ern pow­er elite.

McGraw-Hill chief Deven Shar­ma worked for Dress­er Indus­tries, now a divi­sion of Hal­libur­ton and a long time jew­el in the Bush/Harriman cor­po­rate tiara. Dress­er was George H.W. Bush’s first real job after his grad­u­a­tion from Yale.

One must won­der, also, who was the “mys­tery investor” who stood to make the bet­ter part of a $bil­lion on the down­grade (at least accord­ing to media pro­jec­tions before the S & P down­grade)?

The SEC is inves­ti­gat­ing the mat­ter.  It remains to be seen if any­thing sub­stan­tive emerges from the inves­ti­ga­tion.

Sim­i­lar prof­i­teer­ing took place upon the occa­sions of the JFK assas­si­na­tion and 9/11. The Bush milieu was deeply involved in the events of 11/22/1963 and 9/11/2001.

“Read­ing Between the Lines” by Stephen Met­calf; The Nation; 1/10/2002.

EXCERPT: . . . . While crit­ics of the Bush Admin­is­tra­tion’s ener­gy poli­cies have point­ed repeat­ed­ly to its inti­ma­cy with the oil and gas industry–specifically the now-implod­ing Enron–few edu­ca­tion crit­ics have not­ed the Admin­is­tra­tion’s cozy rela­tion­ship with McGraw-Hill. At its heart lies the three-gen­er­a­tion social min­gling between the McGraw and Bush fam­i­lies. The McGraws are old Bush friends, dat­ing back to the 1930s, when Joseph and Per­me­lia Pry­or Reed began to estab­lish Jupiter Island, a bar­ri­er island off the coast of Flori­da, as a haven for the North­east wealthy. The island’s orig­i­nal ros­ter of socialite vaca­tion­ers reads like a who’s who of Amer­i­can indus­try, finance and gov­ern­ment: the Meads, the Mel­lons, the Paysons, the Whit­neys, the Lovetts, the Harrimans–and Prescott Bush and James McGraw Jr. The gen­er­a­tions of the two fam­i­lies par­al­lel each oth­er close­ly in age: the patri­archs Prescott and James Jr., son George and nephew Harold Jr., and grand­son George W. and grand­nephew Harold III, who now runs the fam­i­ly pub­lish­ing empire.

The amount of cross-pol­li­na­tion and mutu­al admi­ra­tion between the Admin­is­tra­tion and that empire is strik­ing: Harold McGraw Jr. sits on the nation­al grant advi­so­ry and found­ing board of the Bar­bara Bush Foun­da­tion for Fam­i­ly Lit­er­a­cy. McGraw in turn received the high­est lit­er­a­cy award from Pres­i­dent Bush in the ear­ly 1990s, for his con­tri­bu­tions to the cause of lit­er­a­cy. The McGraw Foun­da­tion award­ed cur­rent Bush Edu­ca­tion Sec­re­tary Rod Paige its high­est edu­ca­tor’s award while Paige was Hous­ton’s school chief; Paige, in turn, was the keynote speak­er at McGraw-Hill’s “gov­ern­ment ini­tia­tives” con­fer­ence last spring. Harold McGraw III was select­ed as a mem­ber of Pres­i­dent George W. Bush’s tran­si­tion advi­so­ry team, along with McGraw-Hill board mem­ber Edward Rust Jr., the CEO of State Farm and an active mem­ber of the Busi­ness Round­table on edu­ca­tion­al issues. An ex-chief of staff for Bar­bara Bush is return­ing to work for Lau­ra Bush in the White House–after a stint with McGraw-Hill as a media rela­tions exec­u­tive. John Negro­ponte left his posi­tion as McGraw-Hill’s exec­u­tive vice pres­i­dent for glob­al mar­kets to become Bush’s ambas­sador to the Unit­ed Nations.  . . .


8 comments for “McGraw Family (Owners of S & P) are Longtime Intimates of the Bush Family”

  1. From the Dai­ly Mail arti­cle: “Who­ev­er it is stands to earn a 1,000 per cent return on their mon­ey, with the expec­ta­tion that inter­est rates will be going up after the down­grade.”

    The prob­lem with this line of spec­u­la­tion is that if such a trade did in fact occur, the per­son who placed the trade has in fact lost mon­ey — bond yields were head­ed down before the down­grade, they plunged on the news of the down­grade, and they have con­tin­ued trend­ing down since then. In oth­er words, the mar­ket flipped the bird to the S&P, which is what it usu­al­ly does — though you would­n’t know that from read­ing the cov­er­age in the main­stream media. That’s not to say the trade was­n’t made on inside infor­ma­tion; how­ev­er, your claim that they made “the bet­ter part of a $bil­lion” bet­ting on increased rates is just plain wrong.

    Posted by Mark | August 17, 2011, 10:28 am
  2. This is inter­est­ing, it links the head of S&P (and the man per­son­al­ly respon­si­ble for the down­grade) to the Bil­ber­berg­ers: http://seekingalpha.com/article/285737-the-rise-of-financial-terrorism

    Posted by Mark | August 22, 2011, 7:50 am
  3. (please cor­rect my spelling in my last com­ment — that should be “Bilder­berg­ers”)

    Posted by Mark | August 22, 2011, 7:52 am
  4. Com­ment on sto­ry below: It should be not­ed that Spain is the only coun­try that has attempt­ed to pros­e­cute mem­bers of the Bush Admin­is­tra­tion for crimes of tor­ture.

    S&P low­ers Spain’s debt rat­ing a notch to ‘AA-’

    By Agence France-Presse
    Thurs­day, Octo­ber 13, 2011

    WASHINGTON — Stan­dard & Poor’s cut Spain’s cred­it rat­ing by one notch to “AA-” from “AA” with a neg­a­tive out­look on Thurs­day, fol­low­ing down­grades to the country’s top banks.

    S&P said Spain’s high unem­ploy­ment, tighter finan­cial con­di­tions and “the like­ly eco­nom­ic slow­down in Spain’s main trad­ing part­ners” prompt­ed the down­grade.

    “The finan­cial pro­file of the Span­ish bank­ing sys­tem will, in our opin­ion, weak­en fur­ther,” S&P said, adding that while the fac­tors that impede Madrid’s recov­ery of domes­tic demand “are not unique to Spain, they impact Spain with par­tic­u­lar force giv­en its high lev­el of pri­vate sec­tor lever­age, much of which is fund­ed exter­nal­ly.”

    On Tues­day, the cred­it rat­ings of top Span­ish banks, includ­ing San­tander and BBVA, were down­grad­ed on Tues­day by Stan­dard & Poor’s as well as rat­ings agency Fitch over poor growth prospects.

    S&P had said the “tougher-than-pre­vi­ous­ly-antic­i­pat­ed macro­eco­nom­ic and finan­cial envi­ron­ment in Spain” prompt­ed its down­grade of 10 bank rat­ings.

    Spain is slash­ing spend­ing to reduce its deficit and con­vince mar­kets it can stay on top of its debt and does not need a bailout.

    How­ev­er, the aus­ter­i­ty dri­ve has near­ly stalled growth, with S&P and oth­ers warn­ing Spain risks end­ing up in dou­ble-dip reces­sion.

    Posted by R. Wilson | October 13, 2011, 8:42 pm
  5. http://www.huffingtonpost.com/2011/11/26/federal-judge-credit-rati_n_1114034.html

    REUTERS — A fed­er­al judge has said cred­it rat­ings are not always pro­tect­ed opin­ion under the First Amend­ment, a defeat for cred­it rat­ing agen­cies in a law­suit brought by investors who lost mon­ey on mort­gage-backed secu­ri­ties.

    The Novem­ber 12 deci­sion was a lit­tle-noticed set­back for McGraw-Hill Cos’ Stan­dard & Poor’s, Moody’s Cor­p’s Moody’s Investors Ser­vice and Fimalac SA’s Fitch Rat­ings, which have long invoked First Amend­ment free speech pro­tec­tion to defend against law­suits over their rat­ings.

    These agen­cies had argued that the Con­sti­tu­tion pro­tect­ed them from claims they issued inflat­ed rat­ings on more than $5 bil­lion of secu­ri­ties issued in 2006 and 2007, and backed by loans from for­mer Thorn­burg Mort­gage Inc and oth­er lenders.

    But the judge said the rat­ings were shared with too small a group of investors to deserve the broad pro­tec­tion sought.

    “The court rejects the rat­ing agency defen­dants’ argu­ments that the First Amend­ment pro­vides any pro­tec­tion to them under the facts of this case,” U.S. Dis­trict Judge James Brown­ing in Albu­querque, New Mex­i­co, wrote in a 273-page opin­ion.

    Brown­ing nonethe­less dis­missed claims accus­ing Moody’s and Fitch, but not S&P, of mis­rep­re­sen­ta­tions, say­ing the investors did not ade­quate­ly allege that the two agen­cies did not believe their rat­ings, or know­ing­ly con­cealed their inac­cu­ra­cy.

    He also said fed­er­al law pre­empts some argu­ments that the investors used to recov­er under New Mex­i­co secu­ri­ties law.

    The judge said the investors may file an amend­ed com­plaint, which had sought class-action sta­tus. If the state law claims went for­ward, it could pro­vide an avenue for investors to go after the agen­cies in oth­er states.

    Brown­ing had denied the agen­cies’ motion to dis­miss the com­plaint on Sep­tem­ber 30, with­out giv­ing rea­sons.

    S&P, in a state­ment, called the First Amend­ment rul­ing “incon­sis­tent” with oth­er court rul­ings. Fitch spokesman Daniel Noo­nan said that agency is pleased that claims against it were dis­missed. Moody’s and lawyers for the investors declined to com­ment or had no imme­di­ate com­ment.

    Cred­it Suisse Group AG and Roy­al Bank of Scot­land Group Plc are among the oth­er defen­dants in the case.

    Rat­ing agen­cies have been wide­ly fault­ed by investors, reg­u­la­tors and Con­gress for con­tribut­ing to the glob­al cred­it and finan­cial crises that began in 2007 by issu­ing high rat­ings on debt that did not deserve it.

    Thorn­burg made “jum­bo” home loans, larg­er than $417,000, to bor­row­ers con­sid­ered good cred­it risks, but col­lapsed after mar­gin calls and a plunge in the val­ue of mort­gages it held.

    The San­ta Fe, New Mex­i­co-based lender filed for bank­rupt­cy on May 1, 2009, and is now called TMST Inc.


    Investors led by two pen­sion funds, the Mary­land-Nation­al Cap­i­tal Park & Plan­ning Com­mis­sion Employ­ees’ Retire­ment Sys­tem, and the Mid­west Oper­at­ing Engi­neers Pen­sion Trust Fund in Illi­nois, claimed the agen­cies issued false and mis­lead­ing invest­ment-grade rat­ings for Thorn­burg secu­ri­ties, and were paid “sub­stan­tial” sums that com­pro­mised their inde­pen­dence.

    But Brown­ing said the rat­ings were dis­trib­uted only to a “lim­it­ed group” of investors, not the pub­lic at large.

    He also said that unlike pub­licly trad­ed com­pa­nies, the trusts from which the secu­ri­ties were issued were not “pub­lic fig­ures” enti­tled to more pro­tec­tions.

    “The court rejects the rat­ing agency defen­dants’ argu­ment that the First Amend­ment pro­tec­tions regard­ing prov­ably false opin­ions apply to their cred­it rat­ings,” Brown­ing wrote.

    Rat­ing agen­cies have large­ly been suc­cess­ful in rais­ing the First Amend­ment defense.

    For exam­ple, in Sep­tem­ber, a fed­er­al judge threw out a law­suit by then-Ohio Attor­ney Gen­er­al Richard Cor­dray on behalf of pen­sion funds, and said rat­ings were “pre­dic­tive opin­ions.”

    In con­trast, a Man­hat­tan fed­er­al judge, in a 2009 rul­ing involv­ing Mor­gan Stan­ley, said the defense does not apply when rat­ings were pro­vid­ed to a “select group of investors” in a pri­vate place­ment.

    S&P has asked the U.S. Secu­ri­ties and Exchange Com­mis­sion not to file threat­ened civ­il charges over its rat­ings for a 2007 offer­ing, Del­phi­nus CDO 2007–1.

    Posted by R. Wilson | November 26, 2011, 8:20 pm
  6. http://www.forbes.com/sites/brendancoffey/2011/10/26/the-four-companies-that-control-the-147-companies-that-own-everything/

    The Four Com­pa­nies That Con­trol The 147 Com­pa­nies That Own Every­thing

    Excerpt: “... That means the real pow­er to con­trol the world lies with four com­pa­nies: McGraw-Hill, which owns Stan­dard & Poor’s, North­west­ern Mutu­al, which owns Rus­sell Invest­ments, the index arm of which runs the bench­mark Rus­sell 1,000 and Rus­sell 3,000, CME Group which owns 90% of Dow Jones Index­es, and Barclay’s, which took over Lehman Broth­ers and its Lehman Aggre­gate Bond Index, the dom­i­nant world bond fund index. Togeth­er, these four firms dom­i­nate the world of index­ing. And in turn, that means they hold real sway over the world’s mon­ey ...”

    Posted by R. Wilson | December 26, 2011, 10:42 am
  7. @R. Wil­son: Nice find! I sus­pect that a cer­tain fac­tion of the Estab­lish­ment shills & use­ful idiots will still keep blam­ing ‘the Jews’ for all this, however......they’re get­ting VERY des­per­ate.

    Posted by Steven l. | December 26, 2011, 4:59 pm
  8. OMFG, yes S&P, it was just free speech. Very expen­sive free speech:

    Wall Street Jour­nal
    Updat­ed Feb­ru­ary 5, 2013, 12:37 a.m. ET

    U.S. Sues S&P Over Rat­ings
    Jus­tice Depart­ment Says Endorse­ments of Risky Mort­gage Bonds Fueled Cri­sis


    The Jus­tice Depart­ment sued Stan­dard & Poor’s Rat­ings Ser­vices late Mon­day, alleg­ing the firm ignored its own stan­dards to rate mort­gage bonds that implod­ed in the finan­cial cri­sis and cost investors bil­lions.

    The civ­il charges by U.S. Attor­ney Gen­er­al Eric Hold­er against the New York com­pa­ny, one of the bond-rat­ing indus­try’s three giants, are the first fed­er­al enforce­ment action against a cred­it-rat­ing firm over the cri­sis. Sev­er­al state attor­neys gen­er­al are like­ly to join.

    S&P said in a state­ment ear­li­er Mon­day that the gov­ern­ment suit would be “entire­ly with­out fac­tu­al or legal mer­it,” and denied wrong­do­ing.

    After The Wall Street Jour­nal report­ed Mon­day after­noon that the gov­ern­ment intend­ed to launch the civ­il case, S&P con­firmed the expect­ed law­suit and said the rat­ing firm was being pun­ished unfair­ly by the U.S. gov­ern­ment for “fail­ing to pre­dict” the hous­ing melt­down or finan­cial cri­sis.


    S&P said Mon­day that it “would be wrong” to con­tend that its rat­ings were “moti­vat­ed by com­mer­cial con­sid­er­a­tions and not issued in good faith.”


    The suit alleges that S&P from Sep­tem­ber 2004 through Octo­ber 2007 “know­ing­ly and with the intent to defraud, devised, par­tic­i­pat­ed in, and exe­cut­ed a scheme to defraud investors in” CDOs and secu­ri­ties backed by res­i­den­tial mort­gages.

    S&P “false­ly rep­re­sent­ed that its cred­it rat­ings of RMBS and CDO tranch­es were objec­tive, inde­pen­dent, unin­flu­enced by any con­flicts of inter­est that might com­pro­mise S&P’s ana­lyt­i­cal judg­ment, and rep­re­sent­ed S&P’s true cur­rent opin­ion regard­ing the cred­it risks” of the secu­ri­ties, the law­suit says.

    The fir­m’s “desire for increased rev­enue and mar­ket share” led it to “down­play and dis­re­gard the true extent of the cred­it risks,” the suit alleges.


    In 2011, S&P, Moody’s and the Fitch Rat­ings unit of Fimalac SA FIM.FR ‑1.69% and Hearst Corp. were accused by a Sen­ate com­mit­tee of giv­ing over­ly rosy rat­ings to CDOs and then caus­ing an “eco­nom­ic earth­quake” by down­grad­ing hun­dreds of the bonds when the scale of the hous­ing col­lapse became clear.


    S&P has said its rat­ings are opin­ions pro­tect­ed by the First Amend­ment, and judges have thrown out dozens of suits based on that argu­ment.

    The Jus­tice Depart­ment is expect­ed to seek a way around this defense by suing S&P under the Finan­cial Insti­tu­tions Reform Recov­ery and Enforce­ment Act, a 1989 law passed fol­low­ing the sav­ings-and-loan cri­sis that impos­es a rel­a­tive­ly low bur­den of proof.

    “The Jus­tice Depart­ment appears to be using an end-run strat­e­gy of try­ing to bypass the sub­stan­tial bar­ri­ers to suing rat­ing agen­cies by dust­ing off FIRREA,” said Jef­frey Manns, a law pro­fes­sor at George Wash­ing­ton Uni­ver­si­ty.

    He added that a rat­ing agen­cy’s First Amend­ment defense could be vul­ner­a­ble if the firm was a par­ty to alleged wrong­do­ing by oth­er parties—for exam­ple, if S&P knew that infor­ma­tion sup­plied by an invest­ment bank to rate a mort­gage bond was mis­lead­ing.

    The S&P case relies, in part, on the Jus­tice Depart­men­t’s view that the First Amend­ment would­n’t pro­tect a rat­ings firm if it defraud­ed investors by ignor­ing its own stan­dards, accord­ing to peo­ple close to the inves­ti­ga­tion.


    S&P is no doubt ter­ri­fied.

    Posted by Pterrafractyl | February 5, 2013, 8:19 pm

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