UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

SOUTHERN DIVISION
UNITED STATES OF AMERICA,
Plaintiff,
Case No. CV13-779 DOC
- against - (JCGx)
MCGRAW-HILL COMPANIES, INC. and STANDARD AFFIDAVIT
& POORS FINANCIAL SERVICES LLC,
Defendants.
STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK )
Harold McGraw III, being duly sworn, deposes and says:
I. I am the Chairman of the Board, President and Chief Executive Officer of
Defendant McGraw Hill Financial, Inc. I held those same positions with the company in August
2011 when its name was The McGraw-Hill Companies, Inc. (McGraw-Hill)
2. On Friday, August 5, 2011 Standard & Poors Ratings Services (S&P), a
unit of Standard & Poors Financial Services, LLP, itself a subsidiary of McGraw-Hill,
announced it had downgraded the long-term credit rating of the United States from AAA to
AA+. Such decisions are made by ratings committees comprised of S&P analysts. I am not
involved in such decisions and I was not involved in the decision to downgrade S&Ps rating of
the United States.
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3. On Sunday August 7, the security desk at my office received a telephone
call for me from Terrence J. Checki, then the Executive Vice-President of the New York Federal
Reserve Bank. Mr. Checki left both an office telephone number and a private mobile number
and left a message asking me to return his call the following day. I called Mr. Checki back the
next day, Monday August 8. He told me that he was calling to pass a message to me from
Timothy Geithner, formerly Mr. Checkis superior as President of the New York Fed and then
the Secretary of the Treasury. He said that Secretary Geithner was very angry at S&P. He said
that Mr. Geithner viewed S&Ps processes as flawed. He said that it would have been better if I
had called Mr. Geithner on Friday to let him know what was happening.
4. Later that morning, I received a call from Mr. Geithner himself. I was not
available when the call came in, and I returned it.
5. Mr. Geithner expressed anger at the downgrade. In the course of our
discussion, he referred to an asserted two trillion dollar error in S&Ps work, an error that he had
described in various discussions with the media following the announcement of the downgrade.
Having been briefed on the issue by S&P personnel in the wake of those statements by Mr.
Geithner, I explained to him that in relying on Congressional Budget Office figures, as it had,
S&P had not made an error. Mr. Geithner said that S&P had made a huge error and that you are
accountable for that. He added that S&P had a previous history of errors and that this was not
the first mistake it had made.
6. As I reported contemporaneously to my colleagues, he said that you have
done an enormous disservice to yourselves and to your country, that the U.S. economy was bad
and that the downgrade had done real damage. S&Ps conduct would be looked at very
2
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a
carefully he said. Such behavior could not occur, he said, without a response from the
government.
Harold McGraw III
Sworn to before me this
~9~thdayofOda.& 2013
~ L~
Notary Public
P1~FI~RJ. OCC)NOR
NOTARYPUI3LIC, STIVUE OF NEWYORJ(
Registration No. 010C48165(J6
Qualified in Queens County
Certificate Filed in New York County
Commission Expires May31, 2Oj~
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