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Geithner Asks Judge to Block Subpoena in S&P Litigation

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March 4 (Bloomberg) -- Former U.S. Treasury Secretary Timothy Geithner asked a judge to block a demand by McGraw Hill Financial Inc. and its Standard & Poor’s unit for information tied to their claim that the U.S. sued the companies in retaliation for a downgrade of government debt.

Geithner contends that officials on his level shouldn’t be subject to such questioning and the information can be gleaned from other sources, according to a filing yesterday in federal court in Santa Ana, California.

“The Supreme Court and other courts have long recognized that high-ranking public officials should be shielded from discovery requests absent extraordinary showings that the discovery is necessary and that all efforts have been made to avoid it and limit its burdensomeness,” Geithner said.

The government and S&P are in the information-sharing stage of a lawsuit filed last year, in which the U.S. accused the company of lying about its ratings being free of conflicts of interest. The U.S. may seek as much as $5 billion in civil penalties for losses to federally insured financial institutions that relied on the company’s investment-grade ratings for mortgage-backed securities and collateralized-debt obligations, or CDOs.

Standard & Poor’s contends that Geithner met with President Barack Obama just before Geithner warned the company to expect a response to its downgrade of U.S. debt. McGraw Hill, based in New York, says that justifies its need for White House communications to defend fraud claims.

‘Very Angry’

Geithner isn’t a party to the lawsuit.

Terrence Checki, executive vice president of the Federal Reserve Bank of New York, also asked U.S. District Judge David Carter to set aside S&P’s subpoena for information about his calls to McGraw Hill’s Chairman Harold “Terry” McGraw III.

McGraw said in a court filing in January that Checki called him after S&P’s downgrade of the U.S. in August 2011 to let him know that Geithner was “very angry” about it. S&P seeks information from Geithner and Checki to support its claim that the rating company was sued because of the downgrade.

“Mr. Checki is an executive of the New York Fed, which is not an agency of the federal government, let alone a part of the Justice Department,” according to the filing. “He could not, and did not, play any role in the decision to sue S&P.”

The case is U.S. v. McGraw Hill Companies Inc., 13-cv-00779, U.S. District Court, Central District of California (Santa Ana).

To contact the reporter on this story: Phil Milford in Wilmington, Delaware at pmilford@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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