(Repeats story that originally ran on Monday)
* Reform law gave SEC authority to review credit-raters
* Lawmaker called for hearing, investigation
* Professor sees political motivation in review (Adds comment from Georgetown professor, details on Congress)
By Sarah N. Lynch and Andrea Shalal-Esa
WASHINGTON, Aug 15 Examiners at the U.S. Securities and Exchange Commission are checking to ensure that Standard & Poor's followed all of its policies leading up to its controversial downgrade of long-term U.S. debt, according to people familiar with the matter.
Compliance, inspections and examinations are part of its new authority under the Dodd-Frank Wall Street overhaul law.
Among other things, the law gives the SEC the power to continuously monitor credit-rating agencies and conduct annual inspections at each firm.
A SEC spokesman declined comment on the review.
McGraw-Hill's MHP.N MHR.TO Standard and Poor's has been under fire from lawmakers, market players and the U.S. Treasury Department since its decision to downgrade the long-term U.S. debt from a AAA rating to AA-plus this month.
Last week, California Democratic Representative Maxine Waters called for a hearing on the downgrade by the House Financial Services Committee, and urged the SEC to investigate whether S&P disclosed information to certain financial institutions before publicly announcing the decision.
S&P cut the long-term U.S. credit rating by one notch on concern about the government's budget deficit and rising debt burden. The Obama administration accused S&P of making an error in its calculations leading to the unprecedented downgrade.
S&P has vigorously denied it made any mistakes.
S&P spokesman Ed Sweeney had no comment on the SEC review.
"In the course of our business, we are in regular communication with regulators, but we do not discuss particular interactions we might have with them," he said last week, after the Financial Times first reported the review.
The SEC first began regulating credit-rating agencies in 2006, but the Dodd-Frank law gave the agency greater authority after S&P, Moody's Corp (MCO.N) and Fimalac SA's (LBCP.PA) Fitch Ratings gave overly rosy ratings to toxic subprime mortgage-backed securities.
The law allows the SEC to write rules to reduce conflicts of interest and help enhance the integrity of ratings.
The SEC may police the raters to make sure they abide by their own procedures, but it is strictly prohibited from meddling in the ratings process or second-guessing a rating.
Instead, the SEC is limited to reviewing whether or not S&P complied with its own written procedures and policies. That could include things such as ensuring they protect market-sensitive information and making sure the committee properly met to discuss the rating decision. The SEC office can refer cases to enforcement authorities if it finds problems.
"It's a review, not an investigation," said one of the sources familiar with the matter, adding that the review was also focused on transparency of the process.
Separately, the SEC is conducting a broader review of the work of S&P and other ratings agencies as required by the reform law. It is expected to report the findings from all of its credit-rating agency exams in September.
Key committees in Congress may also hold hearings about the downgrade and reforms of the ratings industry.
James Angel, associate professor of finance at Georgetown University, said the review was clearly politically motivated.
"The SEC is a political entity, created by Congress, staffed by political appointees. They are well aware of which way the winds are blowing in Washington," Angel said.
SEC investigators would likely begin by reviewing S&P's compliance manual, followed by interviews of S&P staff members to ensure that the manual was actually followed, Angel said.
While the SEC could not second-guess S&P's ratings downgrade, Angel said the SEC's Office of Compliance, Inspections and Examinations (OCIE) had a "tremendous amount of influence" on how it interpreted the agency's written rules, as well as the many unwritten rules that have evolved over time. (Editing by Bernard Orr) ((email@example.com +1 202 354 5831)) ((firstname.lastname@example.org; + 1 202 354 5807; Reuters Messaging: email@example.com))