News from Friday’s Wall Street Journal is providing more of a harsh light on common practices at many rating agencies — in particular, that agencies often switched out analysts when bond issuers asked. Obviously, given the hot water Moody’s finds itself in right now, this is the sort of thing that will tend to put the defenses up:

“Wall Street is not switching our analysts,” a Moody’s spokesman says. “Moody’s makes decisions based on the best interest of the rating.” “We’re a service business,” says John Bonfiglio, group managing director of structured finance at Fitch. When faced with the decision of keeping an unpopular analyst or bringing in a new one, “we’ve done both,” but not more than once or twice a year, he says.

You just know the press reps over at Fitch are cringing at that one. A rating agency, a service business? Talk about offering up the cheap truth, Bonfiglio. Officially, outfits like Moody’s and Fitch are considered “Nationally Recognized Statistical Rating Organizations.” At least, that’s the favored status they’ve been awarded by the SEC. Wonder if the boys at the SEC see the NRSROs as “service businesses.” The WSJ story gives some examples of the type of “services” the rating agencies provided:

At Moody’s, at least one analyst in the group that rated collateralized debt obligations, or CDOs, was moved off of a particular investment bank’s deals within the past few years after bankers requested an analyst who raised fewer questions about their deals, according to people familiar with the matter. Another mortgage analyst at Moody’s was moved to the firm’s surveillance unit after a Moody’s official agreed with an investment banker’s opinion that the analyst was too fussy, a person familiar with the situation said. The surveillance unit monitors the performance of deals that already have been rated, but doesn’t rate new issues.

Wasn’t the entire point of rating a deal to ask questions about it?