Case 2:13-cv-00779-DOC-JCG Document 101-4 Filed 01/20/14 Page 3 of 103 Page ID #:2129 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA SOUTHERN DIVISION UNITED STATES OF AMERICA, Plaintiff, - against Case No. CV13-779 DOC (JCGx) - MCGRAW-HILL COMPANIES, INC. and STANDARD & POOR’S FINANCIAL SERVICES LLC, AFFIDAVIT 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 & Poor’s Ratings Services (“S&P”), a unit of Standard & Poor’s 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&P’s rating of the United States. Case 2:13-cv-00779-DOC-JCG Document 101-4 Filed 01/20/14 Page 4 of 103 Page ID #:2130 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. Checki’s 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&P’s 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&P’s 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&P’s conduct would be “looked at very• 2 a Case 2:13-cv-00779-DOC-JCG Document 101-4 Filed 01/20/14 Page 5 of 103 Page ID #:2131 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. O’CC)NOR NOTARYPUI3LIC, STIVUE OF NEWYORJ( Registration No. 010C48165(J6 Qualified in Queens County Certificate Filed in New York County Commission Expires May31, 2Oj~ 3